9 main challenges for offshore outsourcing

7 February 2022
Adam Gontarz
Adam Gontarz
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  • Intro

There are many benefits to offshore outsourcing, but it is not without its challenges. In this blog post, we will discuss the 9 main challenges that businesses face when outsourcing work to offshore locations. By understanding these challenges, you can be better prepared to overcome them and take advantage of all the benefits offshore outsourcing has to offer.

Challenge 1: Cultural differences

Cultural differences can certainly be a challenge for offshore outsourcing. This is because the cultural norms and values of two different cultures can often be quite different, which can lead to misunderstandings and conflict due to cultural barriers.

For example, in some cultures, it is considered rude to criticize someone or to openly disagree with them, while in other cultures it is considered polite and respectful to do so. So if you are working with a team of people from a culture that values politeness and respect above all else, and you come from a culture where it is considered normal to openly criticize someone when you think they are wrong, there may be some tension and conflict.

To combat this challenge, it is important to be aware of the cultural norms and values of the country or region where you are outsourcing your work. You can do this by doing some research online, or by talking to people who have experience working in that area.

Challenge 2: Time zone differences

Cost reductions are not everything. Time zone differences can be a challenge for offshore outsourcing since there are various offshore outsourcing destinations to choose from. For example, if the American company is working on the East Coast, there can be a 10-hour time difference depending on offshore workers they choose for a job. This can make communication – and core business – simply difficult.

Another challenge with time zone differences is scheduling meetings. If one team is working during the day while the other team is sleeping, it can be difficult to schedule a meeting that works for both teams. Additionally, it can be difficult to track what work has been completed when multiple teams are working on different parts of a project that are spread out across different time zones.

It is crucial to be aware of the time zone differences between your company and the company you are outsourcing to. You can do this by checking a time zone converter online, or setting up fewer meetings and running time sheets for the sake of quicker asynchronous communication.

Poland is very conveniently located in the center of Europe, with a time zone that is very close to both the U.S. and APAC. So if you are looking for an offshore outsourcing location that has minimal time zone differences, CrustLab might be a good option for you.

Challenge 3: Lack of trust

Yes, a lack of trust can be a challenge for offshore outsourcing. This is because when companies outsource to another offshore country, they often worry about the quality of the work that will be delivered, as well as whether or not they will actually meet their project deadlines. Many companies are hesitant to outsource work to offshore outsourcing destinations because they worry that the work will not be done correctly or that confidential information will be leaked.

Fortunately, there are a number of ways to build trust with your offshore outsourcing partner. One way is to create a detailed project plan and timeline, and make sure both you and your partner agree on all the key milestones and deliverables. You can also conduct regular reviews to ensure that both parties are happy with the progress being made. And finally, you should always make sure that you have a good communication channel in place so that any issues or concerns with offshore workers can be addressed quickly.

Challenge 4: Language barriers

Language barriers can certainly be a challenge for offshore outsourcing. Miscommunications and misunderstandings can lead to frustration on both sides, and can ultimately impact the quality of the work that is delivered.

That said, with a little effort and planning, most language barriers with offshore vendors and foreign workers can be overcome.

One way is to use translation software or services, which can help translate text and documents between different languages. Another way is to use an interpreter, who can help facilitate communication between workers from different countries. By using these tools, businesses and offshore vendors can overcome the language barrier and reap the benefits of offshore outsourcing.

Also, you can simply choose foreign companies with a great command of English. This way, your operating costs won’t increase and you’ll access outsourced workers with specialized expertise – and great language skills. 

Challenge 5: Poor communication

Poor communication can be another challenge for offshore outsourcing. Misunderstandings and incorrect assumptions are common when working with teams that are geographically dispersed. This is especially true if your team is working in different time zones. Miscommunication can lead to delays and mistakes, which can impact the project timeline and budget (no more reduced costs!). 

The best way to overcome these challenges is to establish clear communication channels, time sheets, and protocols early on, and to make sure that everyone involved is following them. It’s also important to build trust and mutual respect between the teams and to give everyone plenty of opportunities to communicate and collaborate. Also, the customer service of offshore vendors should be flawless, and human resources should be able to collaborate when needed. 

Challenge 6: Lack of transparency and control

Yes, lack of transparency and control can be a challenge for offshore outsourcing. When companies outsource work to offshore providers, they often encounter problems with communication, quality, and timely delivery.

These problems can be due to the fact that the offshore partner is working in a different manner and may not be able to respond quickly to requests from the customer. In addition, the customer may not have direct access to the workers who are doing the work and may not be able to see what they are doing. This can lead to misunderstandings about what is being done and how it should be done.

To combat this challenge, it is important for businesses to be clear about what they expect from their offshore outsourcing provider. They should also ensure that the offshore provider has a good understanding of their business and the specific needs of the project. And finally, they should establish regular communication channels so that any issues or concerns can be addressed quickly.

Challenge 7: Lack of skills and expertise

Yes, a lack of skills and expertise can be a challenge for offshore outsourcing – especially if the only factor taken into consideration before was… the price.

When companies outsource work to a development partner, they often encounter problems with quality and communication of offshore vendors. Sometimes the offshore workers in other countries do not have the skills or expertise to do the job properly, which can lead to poor quality work.

Companies that outsource work should make sure that they are choosing a partner company with skilled workers who have good communication skills.

One way to overcome this challenge is to partner with an offshore company that has a team of skilled professionals who can help you get the job done right. Partnering with an offshore company allows you to tap into their pool of talent and skills, which can be a real asset for companies looking for offshore outsourcing.

Challenge 8: Geographical distances

Geographical distance can be a challenge for offshore outsourcing, but there are many companies who have found ways to overcome this challenge.

Some of the challenges associated with geographical distance include also logistical difficulties. However, these challenges can be overcome by using technology to facilitate communication (such as video conferencing), by hiring culturally-sensitive employees, and by implementing efficient logistics systems. 

In fact, it can actually be an advantage because companies can save on labor costs by locating their operations in countries with lower labor costs. And thanks to advances in technology, communication is no longer a barrier to successful offshore outsourcing relationships with your offshore partner.

Challenge 9: project management

Project management can be a challenge for offshore outsourcing, but it’s not impossible. The most important factor is to make sure that everyone involved in the project is clear on the goals and objectives, and that there is a good communication channel in place so that any offshore operation problems or issues can be addressed quickly.

Another important factor is to have a good project manager who understands the nuances of offshore outsourcing and who can handle any potential problems that may arise with offshore vendors. With the right planning and communication, project management in offshore teams can be a success.

How to pick the best offshore outsourcing partner for IT services?

When looking for an offshore outsourcing partner for IT services, it’s important to consider the following factors:

1. Reputation and experience

Make sure the company you’re considering has a good reputation and a track record of success in providing IT services. Also, ask for references from past clients to get a better idea of the company’s strengths and weaknesses.

2. Capabilities and expertise

The company should have proven expertise in providing the specific services you need. Choose a software development offshore outsourcing provider that has experience in offshore outsourcing and has a team of skilled developers who are familiar with your industry and market. Having a partner with the right capabilities, core competencies, skilled resources, business functions, and expertise in delivering software development services, is critical for offshore outsourcing operations to be successful. 

3. Size and scale

The company should be large enough to provide the necessary resources, but not so large that communication and coordination become difficult. Just as important, the company should be able to have a global reach so that they can provide services wherever you need them. 

4. Cultural compatibility

It’s important that your offshore outsourcing partner has similar values and cultural norms as your own organization, to minimize potential culture clashes down the road and maximize potential benefits. Being two peas in a pod culturally is not a prerequisite, but it’s definitely helpful for IT business process outsourcing.

When considering it keep in mind that the offshore outsourcing market is rapidly evolving and new offshore vendors are emerging all the time. Don’t cross some amazing software development offshore outsourcing providers off your list for minor things – do your due diligence and carefully compare all of your offshore outsourcing operations’ options before making a decision.

5. Cost competitiveness

The company should be able to offer competitive rates without sacrificing quality or service. Of course, it doesn’t have to mean going for the cheapest option, but operational efficiency should be obeyed. 

When considering offshore outsourcing, it’s important to weigh the pros and cons carefully to make sure it’s the right decision for your business. By taking into account the challenges and potential risks involved, you can ensure that your relationship with offshore vendors, even from overseas location, is a success.

6. Ability to meet your project deadlines and budget requirements

The offshore outsourcing company should be able to meet your project deadlines and budget requirements. This includes ensuring that the team you’re working with has the necessary skills and resources to get the job done right – on time and on budget. Verifying this up front is critical to avoid any nasty surprises with an offshore contractor down the road.

When considering these factors, it’s important to remember that not all offshore outsourcing providers are created equal. Do your research and take the time to find the right development teams for your business.

Despite all challenges, offshore outsourcing is the way to go

Offshore outsourcing can be a great way to go, but it’s not always the right decision. There are a number of factors to consider when making this decision about outsourcing process, such as the specific needs of your business and the availability of a good offshore contractor in your network. There could even be cons of offshoring. if you don’t know how to tackle it, or a lot of hassle with internal operations. 

However, offshore outsourcing can offer some significant advantages over domestic outsourcing, including cost savings, access to expertise, specialized staff, and improved quality due to cultural alignment. You can easily build a competitive advantage using independent contractors and remote staff from another country.

Ultimately, the best decision for your business will depend on a number of factors specific to your situation. 

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