Why Outsourcing Goes Wrong, Part 2

Atlantic-IT-outsource-mistakes2

In Part 1 of this post, we began discussing common mistakes that cause outsourcing to backfire. From a financial perspective, many organizations focus too much on price and then overestimate how much outsourcing will save them. From a strategic perspective, a lack of goal setting and measurement makes it difficult to determine whether an outsourcing strategy is working. Some organizations struggle to find the right balance, outsourcing too much or too little because they haven’t planned properly or don’t fully understand what outsourcing entails.

But those aren’t the only issues that make outsourcing initiatives go sour. The list continues…

Mismanagement

Outsourcing mistakes occur at both ends of the management spectrum. On one hand, some organizations assume they don’t need as many managers because the outsourcing company will manage things. Outside vendors may be able to manage various components of your IT environment, but it’s up to you to manage your business. That includes oversight of the service provider. On the other hand, controlling micromanagers fail to leverage the outsourcing firm’s expertise and often fall short of achieving business goals. Outsourcing is a partnership, not a power struggle.

Hiring the Wrong Outsourcing Firm

You need to evaluate outside firms holistically. One company may have impressive technical skills and expertise, but communication and responsiveness are lacking. Is their culture compatible with yours? Are you satisfied with how the service-level agreement (SLA) is structured? Which outsourcing firm has the most experience in your industry? How do they ensure security and compliance? Outsourcing begins with due diligence, which goes far beyond what a firm says in their sales presentation.

Failing to Communicate and Invest in the Relationship

Outsourcing doesn’t mean you can just forget about something and expect minimum requirements and goals to be met. You need to build a close relationship with your outsourcing partner and follow mutually agreed upon guidelines and procedures. Both sides should have designated contact people who communicate on a regular basis to discuss strengths, weaknesses, and long- and short-term objectives. These interactions should be documented and reviewed to ensure clarity of expectations and goals.

Assuming All Problems Will Disappear… Immediately

Outsourcing is no magic pill that cures all IT ills. No such magic pill exists, and even the best SLA won’t make your organization immune to IT problems. Equipment fails. Natural disasters happen. The key is to choose a provider that is prepared to deal with these issues swiftly and effectively. Also, outsourcing shouldn’t be viewed as a quick fix. Outsourcing requires a change in approach, process and mindset. This change takes time and requires realistic expectations.

Organizations trust Atlantic-IT.net as their outsourced IT department because we know how to avoid these pitfalls. Let us help you develop an outsourcing strategy that delivers real business value, not frustration and confusion.