Offshore Outsourcing Services - Failures
not allowed
Offshore outsourcing services have become the panacea
for all businesses now. Being the power to transfigure and bring
out a better business performance, it is well appreciated today.
E-merchants have realized that software outsourcing is critical
to establish business venturing on the web.
However, these services have started facing some
failures.
A failure can be the termination of the contract
by the client, before its expiration date, for contracts that had
been in place for at least one year.
From the view of providers, the annual retention
rate seems to be 90% to 95%, while the failures were between 5%
and 10%.
Behind the scenes
Whatever the rate, each outsourcing failure is
expensive for both the parties. Therefore, the reasons behind failures
are important.
In some instances, the provider's offshore outsourcing
services seemed too expensive, in some others, the provider's performance
was not up to the expectations of the customer, while a few other
customers felt that they could do better themselves.
The root cause is the missing link between the
customer's expectations and the perceived results. This is due to
the lack of understanding between the service provider and the customer.
Steps to avoid these defaults
- Consider taking offshore outsourcing services as a strategic
investment.
- Understand and align the interests of service providers and
customers.
- Set a standard, objective against which the management process
can be measured gradually.
- Develop a system for dealing with problems and negotiating changes
& maintain it as a part of the ongoing management of relationships.
- Include people who are skilled at handling relationships, and
those who have personal, professional & economic motives in
doing so.
Many survey results have revealed that global expenditure
on outsourcing services offshore is showing an upward trend. However,
this phenomenon can be changed to a very great extent if care is
taken to avoid the above discussed shortcomings.
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