Common Myths and Misconceptions of Outsourcing
Business relationships have always been an essential factor for the successful operations of an organization. While more and more companies turn to business process outsourcing for business support, some business leaders are still on the fence about it due to these circulating myths. In truth, outsourcing partners can play an integral role in a business’s core strategy. BPO companies, when properly aligned, help thousands of companies grow and thrive in today’s ever-competitive market.
Myths and misconceptions of outsourcing
1. Myth: Outsourcing lets you lose control of your business
This is one of the biggest outsourcing myths and misconceptions. The organization does not lose control over its business. Companies can always question their strategic partners over their management of similar past problems. Communicating through appropriate channels and sharing information by setting up something like a standard VPN or custom cloud solution also helps maintain control over the business.
Hiring full-time employees to work only for non-value-added activities can be a waste of resources and talents. Suppose companies can hire outsourcing companies to perform non-value-added activities. In that case, they can achieve complete control of the business since the employees are fully engaged in activities that accomplish its mission, vision, goals, and objectives. Activities like processing a purchase order, using a storage facility, transferring finished goods, preparing a cost of production report, quality checking, and preparing client’s billable are examples of business processes that are not value-added but still necessary for operations.
2. Myth: Outsourcing is costly
“Outsourcing is expensive” is one of the biggest outsourcing myths and misconceptions. It can reduce 70% costs in large, small, and medium industries. Outsourcing reduces operational costs and increases productivity. Outsourcing to places like India has always been very profitable for organizations out of the United States of America, the United Kingdom, and other European countries. The costs include advertising available job positions, recruiting, hiring, and training new employees for a department. When you outsource, you’re employing a specialized staff to improve your company’s productivity without having to spend on payroll and other expenses related to an in-house HR department.
Moreover, companies can also outsource financial consultants and management consultants. This outsourcing decision is a wise move if the company is expanding. Companies are outsourcing mainly because of cutting costs, focusing on business goals, and solving capacity issues.
3. Myth: Outsourcing guarantees a lack of knowledge on the services
The key to outsourcing is the dedication to its services and customers. Outsourcing companies hire specialists in various fields who deliver customer-focused results that go beyond the metrics. Outsourcing aims to do the job right at the best quality.
4. Myth: Outsourcing is only limited to big businesses
You need to be a huge organization to outsource is one of the biggest IT outsourcing myths. Small and medium enterprises are uncertain if this opportunity was only available for more prominent companies. Start-ups and SMEs alike can successfully outsource many of their essential and strategic business functions.
5. Myth: Outsourcing will make you lose the company’s privacy
Data theft and breach of privacy are unexpected. At the same time, businesses must be more vigilant. They must have data security methodologies to reduce or avoid data theft. They must include the necessary section in the contracts they sign with the finalized vendor regarding data breaches and theft. They can ask for reports regarding internal audits of security, business continuity, and disaster recovery.
6. Myth: Outsourcing means offshoring
Outsourcing and offshoring are two different teams. They’re not even related at all. Offshoring becomes advantageous for costs since some countries have lower wage rates and tax rates compared to the company’s home country. The defining point between offshoring and outsourcing is the status of the service provider.
7. Myth: Outsourcing delivers low-quality services and outputs
People are more likely to spread horror stories than success stories, so this myth is one of the more persistent ones. The best way to reduce the risk of getting low-quality output is to choose the best outsourcing service provider among the rest. Outsourcing provides access to unlimited human resources, knowledge, and skills.
8. Myth: Outsourcing weakens the economy
Outsourcing will bring economic development to a business enterprise, in turn to the country. Western companies have been saving hundreds of millions of dollars simply by outsourcing their businesses to cheaper avenues. This business practice has helped strengthen their economies and not weaken them.
9. Myth: Difference in time zone reduces productivity
There are many ways to overcome time zone differences; You manage time zone differences by defining appropriate working processes and using collaboration technologies.
10. Myth: Outsourcing will ruin your work culture
If your outsourcing team is talented, it will only make your work culture more diverse, vibrant, and competitive. A competent in-house team keeps your core business running. An equally qualified outsourcing team keeps that set standard of performance intact. For example, companies have been outsourcing to India for years now and have experienced that competitive advantage.
11. Myth: Savings is the only reason to outsource
The primary motivation behind outsourcing is the cost factor. But there are other equally important factors, such as skilled personnel. So, there is no need for training. They can do all the boring stuff like booking flights, scheduling your meetings, etc. Businesses will get quality human resources at a lesser cost. It helps business entrepreneurs concentrate on their core business, increase profits, overall efficiency, and reduce stress. The offshore vendor is always maintaining constant communication to keep the client in the loop. That commitment is the best. It is more important than money.
12: Myth: Outsourcing adds up to the unemployment rate
There was a myth that jobs are lost when a company outsources jobs, especially offshore outsourcing. Outsourcing helps a company expands. When companies grow, more jobs are created. Cutting costs through outsourcing makes a company’s expansion possible.
13. An in-house sales force is cheaper than outsourcing
The truth is that an in-house sales force is not cheap. The benefits that companies would receive from an insourced sales force versus an outsourced sales force are relatively the same, considering that the people in the sales force are competent and experts. But the price difference is the ultimate deciding factor. An outsourced sales force can work faster since the company has a competitive knowledge base to help the sales force make better solutions. In contrast, an in-house sales force may have a difficult time gathering information.
It’s not a secret that outsourcing is one of the best ways to increase efficiency and boost revenue for companies throughout the globe. If you’re like most business owners, the thought of making your company stronger while keeping payroll under control is exciting. Unfortunately, there are many misconceptions about how BPO (Business Process Outsourcing) services work. These myths hold companies back from reaching new heights of success. we believe that communication is the key to successful collaboration. Processes of any complexity can be effectively outsourced with high-quality results for any size of the organization