Does Outsourcing Really Work? Here’s how to do it without being burnt

by | May 29, 2018

Outsourcing has long been a good opportunity for businesses to gain individuals or teams with the skills needed, without the hassle and cost of full-time contracts.

Starting back in the late 1980’s as a way of reducing costs and expanding business, outsourcing is now a fully-fledged industry and growing by the day.

The past decade has seen a significant rise in outsourcing as advancements in Iot (Internet of Things) applications and modern technology such as AI (Chatbot Web Services), blockchain and AR, has forced a demand for specialized IT and development skills that are either too expensive, or not available locally.

Does outsourcing work?

Yes, outsourcing works well for many businesses, but like anything involving people, services or money, there is usually some level of risk, especially with new business relationships. You don’t need to look far on the internet to find plenty of horror stories of how outsourcing went wrong and left a path of destruction in its wake.

Here are some points to remember if you don’t want to be scolded by outsourcing:

  • Reliable source

    If you are outsourcing overseas, make sure you have a good contact point who will be available in your time zone.
    There are lots of ads online for outsourcing, but not all of them are reputable, so always make sure they come from a respected source where you can check feedback and recommendations about their services. Find out how long they have been in business, so you avoid working with pop up business who will be gone again within a year, when you may need after-support.

  • Other work

    Depending on the type of services you are outsourcing, there could be a chance that the outsourcers are also working on other projects at the same time as yours.
    This can be fine, but if you want to avoid your outsourcers being creatively worn out, ask them about their expected work load for the duration you require their services for, then you can better gauge how dedicated they will be to your project. If you have sensitive information and are worried about sharing this with outsourcers, you could protect your business with a non-disclosure agreement.

  • Secure online payment method

    Possibly the most important point on this list, choosing a safe way to pay for the services.
    One of the biggest problems with outsourcing is receiving invoices for services you are not entirely happy with, but it was cheap, so you think, “ok learnt my lesson there and won’t do it again”. Then of course you would have to pay someone else for the services that weren’t satisfactory in the first place. Without a safe payment method in place, you are also susceptible to being overbilled, or charged hidden fees. You can avoid all of this by insisting on a safe payment method from the beginning.
    Escrow is a wise online payment method for this type of transaction because of the way it works. To put it simply, you agree on a price for the services, then you make the payment via the online payment Escrow service such as Payoneer Escrow, so work can begin. An Escrow is a financial agreement where funds are kept in a 3rd party temporary trust account until the agreed conditions have been met. So, funds are only released to the outsourcer once you have confirmed receipt of the services you paid for. This is a good option for both parties because it makes it easier, faster and safer to make and receive payments for services online. Freelancer websites have become popular for this because they come with the security of built in Escrow payment facility, making it a safer transaction.

  • Check examples and references

    Sounds obvious but if hiring through an outsourcing agency, it can be easy to just trust who they set you up with and what they advise, without checking their work history.
    Sometimes these agencies will have an office nearby, but send the work to their overseas delegates. This can make you feel disconnected to your own project as the office is like the middle man between your project and the workers, so you rarely get first hand info. These types of agencies usually have so much going on that your project is just another on the list of hundreds to be done.

Since the demand for cloud services, machine learning, cyber security, 3D and blockchain technologies development is only increasing, businesses and entrepreneurs will continue to hire outsourcers as a way of obtaining skilled individuals, with lower costs.
If you plan to outsource any services this year, be sure to keep the above four points in mind.

 

Eva George
Marketing Specialist & Copywriter
Scopic Software

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