Challenges with Outsourcing and How to Overcome Them

03 May 2022

Over the past decade, companies have increasingly turned to outsourcing as a way to reduce their costs, diversify their portfolios, get access to a global talent pool and increase their profits. Outsourcing is the process of assigning a job or a task to a third-party vendor, who performs the work at a lower cost than doing it in-house.

Outsourcing has become a routine part of doing business today. It promises to save money, improve efficiency, and provide services that can’t be provided in-house. However, IT software outsourcing comes with challenges that don’t come with in-house solutions, and that require a different set of skills and mindset, which can soon be a challenge for many businesses to adapt to if they don’t understand it well.

This article will provide an overview of the common associated challenges with outsourcing and will provide valuable solution on how to overcome them.

6 Common Challenges with Outsourcing and their Solutions

1. Project Control

The first outsourcing challenge is control over the project. When the process of software development is outsourcing to third-party vendors, you are not going to work with your in-house team, you work with an external company. In other words, you are not hiring an employee, hiring a contractor.

Although you can provide details about the project that needs to be done. You may don’t have control over the people who are working on the project. Also, the working team is out of your office that’s why maintaining control over the entire project can be a bit challenging for you.

The Solution: The easiest method to tackle this difficulty in software development outsourcing is to clarify how much control the outsourcing company’s workers have over the project in the outsourcing contract. What kinds of decisions may a service provider make about outsourced work should be clear. Both the organization requesting outsourcing services and the vendor’s workers should be aware of the service contract’s terms. At Star Knowledge, we encourage our clients to talk to our resources and understand them and give an opportunity to our employees to adjust and align to customer needs. With us, customer always gets a choice of resources from the pool to choose from.

2. Outsourcing Experience

Another software outsourcing challenge is the lack of adequate experience in outsourcing. First, when you start working with an outsourcing company, it might be overwhelming. You are not familiar with their workflow, practices, and concepts, especially when you going to convey your vision to someone you have never worked with them, it’s so difficult task, that is not to be ignored.

The Solution: An expert vendor will help you in avoiding bottlenecks and mitigating any hazards through the process. They will assist you in defining requirements and identifying the best candidates for the task. Ultimately you will always keep in mind that outsourcing is hazardous, you’re ready to take the correct supplier will be there to help you every step of the way.

At Star Knowledge, we focus on understanding your business needs, requirements, what can drive better ROI and try to identify any risks, pitfall and encourage to start small and keep scaling.

3. Differences in Organizational Culture

In this globalization world, companies should discover talented people, but cultural difference becomes a major outsourcing challenge. Whenever companies go to outsource their work to third-party offshore locations, at that time companies can face two different types of barriers there are corporate and regional barriers.

Why Because outsourcing includes engaging with two separate firms, that’s why the corporate disparities occur. Because the business and the outsourced services provider are in separate countries, regional gaps develop.

Your different parts of the business may be impacted by these organizational cultural gaps. It can influence the team’s communication, understanding, and interpretation, as well as their dedication and productivity. Because of the cultural differences, there may be a lot of misconceptions and conflicts between the two teams.

The Solution: The best solution for this challenge is, when you going to outsource a project, then establish a training program to educate its staff about the outsourced service provider’s organizational and regional cultures. An outsourced service provider might run a similar training for its personnel that focuses on the clients’ organizational and geographical cultures.

At Star Knowledge, we focus on our customer’s culture and develop our teams to align to the work styles and culture of our customers. This is a key focus element in the initial few weeks of our engagement.

4. 4. Communication Challenges

Language and communication barriers are another outsourcing challenge that organizations confront when outsourcing their projects with third-party outsourcing partners. At that time people may speak in their mother tongue, but they are not able to understand. Another communication difficulty that comes with outsourcing is unspoken assumptions.

Whenever companies go outsource, they face this kind of challenge. In the workspace, workers need to be a discussion with staff, at that time they need to be understood clearly about what work to be done correctly. When you work with an offshore company, communication and language become a major challenge.

The Solution: Using Instant messaging and video calling capabilities may solve communication problems. Utilize remote working technologies like Basecamp and Jira. Choose outsourcing partners in English-speaking nations like India or other countries where workers can fluently speak English. By doing this you may overcome language barriers. This solution will benefit for you when outsourcing.

We ensure all our consultants and engineers can speak in English fluently and understand and articulate your requirements with clarity.

5. Challenges in Data Security and Intellectual Property

Outsourcing comes with a risk, when you are working with a third-party outsourcing partner. The organization’s primary concern protection of cybersecurity and intellectual data like the business plan, trade secrets, etc., If this data is not managed appropriately, the developed application or its rights may lose.

Regardless of how big your company is, whether it’s a start-up, a small business, or a corporation, total data and IP protection are critical. You may reveal a lot of vital information about your firm, key processes, and other business assets while working with a remote tech team or remote developers.

Not only will you disclose crucial facts, but you may also be expected to share your resources and tools while working, especially if you are the technical co-founder of the offshore firm.

The Solution: By signing legally enforceable contracts with the outsourcing firm, such as a non-disclosure agreement you can solve this challenge. When a service provider maintains strict data rules, the danger of a data breach is reduced.

At Star Knowledge, we are an ISO 27001:2013 certified company and follow strict security norms to protect our customer’s interest. We request for an NDA right on the onset even before signing the contract to begin work on.

6. Challenge in Transferring Knowledge

Transferring knowledge is a major problem with outsourcing. This challenge may arrive from your side or the vender’s perspective. When dealing with project outcomes after the vendor relationship has been dissolved, you may have an unpleasant experience, if they did not keep detailed records of it.

The Solution: Create one document regarding a detailed plan about knowledge transfer, including the features, code logic, and technology by this your vendor should be able to understand the project.

Star Knowledge consultants, maintain and manage system documentation for each customer feature, release including system architecture, usage guides, user stories, test case stories amongst others and ensure everything is managed either within Azure DevOps/ Jira boards of the customer.

Conclusion

Above discuss points are main challenges with outsourcing, for you outsourcing is new first you are almost going to face some certainly have some difficulties. That’s why it is critical to select a reputable outsourcing partner. A dependable outsourcing vendor has enough case studies to demonstrate their experience, favorable customer feedback, and a dedicated team of specialists who will be there to guide you through each stage.

If you are searching for an end-to-end software solution provider for your business applications, feel free to contact us. We will help you to streamline your project priority and help with seamless execution.