Risks of Offshore Outsourcing

November 11, 2008

Many of us go for offshore advertising to save time and money. If we have someone else doing the work for us, then we will have more time to focus on other aspects of our business. It also saves us money because we can get the job done at a cheaper rate than what we would have, if we had to do it in-house or within our country. However, there are some serious risks involved in outsourcing and these should be carefully considered when choosing an offshore outsource provider.

Let us say you happen to outsource and you have found a really talented web developer. He has great skills in coding and designing web pages, but if the person or the company that you hired has limitations in terms of the language you speak then the entire business relationship can easily lead to loss due to miscommunications and resulting confusions. Offshore outsourcing will help in terms of saving you money because you can pay less, but the delays in having to re-work a project due to misunderstandings can turnout to be expensive.

Another factor to look out for is reliability; you have to select a provider that can deliver on time and with the quality and standard that is agreed upon. If the outsourcing partner that you select does not have stable resources or qualified resources then it may not be possible to complete the project within the agreed time. Any business owner will tell you, that unstable resources can cost you and your company a great deal and undo everything that you have worked for.

The next disadvantage is to be seen in the security issues faced by companies that outsource. Due to the nature of the project at hand certain sensitive data may have to be shared with the outsourcing company, this can put you, and your company to serious security risks as you can never be sure who you are dealing with. There are number of companies whose customer databases have been stolen and misused by the outsourcing company.

Another major problem faced in offshore outsourcing is the quality of the work. Though there are number of excellent offshore outsourcing companies, there are also good number of companies that do not have well trained resources. As a result, the quality of the work submitted will be poor. In order to offset the low prices these outsourcing companies hire cheap labour and out of which we can only expect poor quality work.

If you are in the process of hiring, an offshore outsourcing company first check with your friends and acquaintances in your business circle for reliable outsourcing providers. As most companies today outsource their work to offshore outsourcing companies, you may be able to take advantage of the research that they have done to find the right outsourcing company for their requirements.  This will help you both save you a lot of time and at the same time will get you a reliable company to outsource your requirements.


5 Responses to “Risks of Offshore Outsourcing”

  1. Offshore Outsource on November 14th, 2008 3:31 pm

    outsourcing offshore might be risky but not if you know what your getting yourself into..

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  3. Human resource outsourcing (HRO) is the sensible thing to do | Outsource Portfolio on April 4th, 2009 5:28 pm

    […] particularly if you are planning to outsource to offshore locations then you need to know the risks of offshore outsourcing and have proper offshore outsource risk mitigation plan to resolve […]

  4. More risks in offshore outsourcing on May 24th, 2009 6:43 am

    There are lot of risks associated offshore outsourcing, this blog has listed very few of them.

  5. Maegan Anderson on June 23rd, 2011 10:41 pm

    Thanks for the ideas. There are lot of things to consider before outsourcing to third party companies. Proper planning and wise decision making will lessen the risk of doing it. Of course, you as the owner knows the limitations and capabilities of your company. Therefore, you know when or what are the services that your company need.

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