Top 12 Problems with Outsourcing IT Teams (Solutions Included)

Outsourcing IT services has become increasingly popular among companies and business owners looking to expand their teams, reduce costs, gain access to a pool of talented developers, and expand their reach globally.

Recently, in a Deloitte Survey, organizations were questioned about how their organization perceived the benefits of outsourcing. 65% of the respondents said outsourcing helped them focus on core functions. 63% mentioned cost-cutting as a key benefit of outsourcing.

However, with the growth of outsourcing comes an array of challenges that companies need to be aware of before taking the leap.

Watchout for These Major Challenges Associated With Outsourcing IT Teams & Here’s How to Overcome Them

According to a study by Gartner, approximately 80% of companies that outsource IT services experience at least one major challenge. Communication, cultural differences, and lack of control are the most common.

These statistics are a clear indication that outsourcing IT services is not a simple or straightforward process. It requires a significant investment of time, money, and resources to ensure that everything runs smoothly. These challenges can significantly impact the success of your outsourcing project, which is why it is important to be aware of them and have the plan to overcome them.

But with the right approach, these challenges can be overcome, and companies can enjoy all the benefits that outsourcing IT services have to offer. This post will explore the major challenges associated with outsourcing IT teams, certain practical solutions to overcome them, and some best practices that can save businesses a lot of time and money.

1. Communication challenges:

One of the biggest challenges associated with outsourcing IT services is communication. Difficulty in effectively communicating with offshore teams due to language barriers, cultural differences, and time zone differences can lead to confusion, misunderstandings, delays in projects, and overall dissatisfaction with the outsourcing relationship. This can impact the quality of work and the project’s overall success.

To overcome this challenge:

  • It is essential to implement clearly defined communication channels. This means conveying updates clearly, setting up regular check-in meetings through email correspondence or video conferencing, using project management tools, etc. to ensure that both the offshore team and the in-house team are on the same page. Using tools such as Slack, Asana or JIRA can help streamline communication and keep everyone on track.
  • It is also important to establish clear expectations from the beginning, including expected response times, communication protocols, and project timelines. This will ensure that everyone is on the same page and that communication is streamlined.

2. Cultural differences:

Cultural differences can also be a significant challenge when outsourcing IT services. Misunderstandings due to different communication styles and business practices can lead to delays, poor quality work, and difficulty in building trust with offshore teams.. This can be especially difficult when working with teams in other countries or cultures.

To overcome this challenge:

  • It is essential to provide cultural sensitivity training to both the offshore team and the in-house team. This can help both teams understand and appreciate the cultural differences and work towards building a successful working relationship while respecting their cultural differences.
  • Regularly scheduled check-ins and team-building activities can also be helpful in fostering trust and promoting effective communication between the offshore team and the in-house team. This can aid in ensuring that all team members are aligned and that the project runs smoothly.

3. Lack of control over the team and processes:

Another major challenge associated with outsourcing IT services is the lack of control over the team and processes. Difficulty in maintaining visibility, control, and decision-making authority over the offshore team’s work can lead to delays, poor quality work, and dissatisfaction with their final outputs. It can also lead to dependency on the offshore team for crucial IT services, which can be risky for the company.

To overcome this challenge:

  • It is essential to clearly define roles and responsibilities from the beginning. This will ensure that everyone knows what is expected of them and that the project is properly managed. Additionally, regularly reviewing work progress and implementing project management tools can help to keep everyone on the same page and ensure that the project is running smoothly.
  • Another solution is to establish clear quality standards and identify the dependency on the offshore team, and implement measures to reduce dependency. This can include hiring additional in-house staff/a project manager or developing a plan for continuity of services in case of unexpected disruptions.

4. Security concerns:

Security concerns are another major challenge that companies face when outsourcing IT services. When outsourcing, difficulty in protecting proprietary information can lead to data breaches and loss of sensitive information and thus, data privacy, cybersecurity, and protection of proprietary information are all concerns that must be addressed.

To overcome this challenge:

  • It is essential to conduct thorough background checks on employees and implement strict security protocols and data management protocols. This includes regularly reviewing and updating security measures, implementing encryption methods, and developing a security awareness program.
  • Additionally, it is important to establish contracts outlining the responsibilities of both parties with regard to data privacy and security. This will ensure that everyone is aware of their obligations and that the company’s sensitive information is protected.

5. Legal and regulatory issues:

Understanding and complying with laws and regulations in different countries can be a major challenge when outsourcing IT services. This can include issues such as data privacy, labor laws, and tax laws and can be a pain point for companies that are not familiar with the laws and regulations of other countries.

To overcome this challenge:

  • Hiring a lawyer with expertise in outsourcing laws is essential. This will help ensure that the company complies with all relevant laws and regulations.
  • Additionally, conducting thorough research on laws and regulations, and establishing contracts outlining compliance requirements can help to mitigate this risk.

6. Cost management:

Managing costs associated with outsourcing IT services can be a major challenge. This can include issues such as unexpected expenses, budget overruns, and difficulty in tracking costs. Outsourcing can be a significant investment, and companies must ensure that they are getting the most out of their investment.

To overcome this challenge:

  • It is essential to establish a budget and cost-tracking system. This will help to ensure that expenses are kept under control and that the project stays on track.
  • Additionally, implementing cost-saving measures such as automating processes, using open-source software or negotiating better, can help to reduce your overall costs.

7. Stakeholder management:

Managing the expectations of stakeholders and measuring the success of outsourced IT services is also a key pain point as they may have different expectations for the outsourcing relationship and may be concerned about the quality of the work being done by the offshore team.

To overcome this challenge:

  • It is essential to communicate with stakeholders regularly and set clear goals and expectations for the outsourcing project. This will help to ensure that everyone is on the same page and that the project is running smoothly.
  • Additionally, regularly measuring the success of outsourced IT services, using metrics such as cost savings, time to completion, and customer satisfaction, can help ensure that the project delivers the desired results. It’ll also help you demonstrate to your stakeholders that the project is meeting their needs.

8. Provider selection:

Choosing the right provider for outsourcing IT services can be a major challenge. With so many providers to choose from, it can be difficult to find one that meets the specific needs and requirements of the company.

To overcome provider selection challenges:

  • It’s very important to conduct thorough research on potential providers and seek references and testimonials from previous clients.
  • Additionally, evaluating the qualifications and experience of potential providers can help ensure that you choose a provider that is well-suited to meet your business’ needs.

9. Lack of technical knowledge & expertise:

It can be difficult to find and hire the right offshore IT professionals with the exact skills needed for the project. In some cases, an outsourcing provider may make big promises, but deliver a team of unqualified specialists which can be a result of the provider prioritizing cost savings over hiring qualified professionals. This unprofessional approach can result in poor-quality work and negatively impact your project’s success.

To overcome this challenge:

  • Companies should hire IT professionals based on their interviews and they should also invest time in the training and development of offshore team members.
  • Additionally, it is important to monitor the market for new opportunities to leverage the competitive advantage of outsourcing.

10. Resource allocation and shortage of manpower:

Resource allocation and shortage of manpower can also be challenges associated with outsourcing IT teams. Vital offshore resources leaving amidst an ongoing project can be a big problem for small businesses or companies on a tight schedule and if the provider faces difficulty in allocating replacements effectively, it just adds more delays in project completion and can even cause financial losses if this isn’t planned for.

To overcome this challenge:

  • Solution to this challenge include hiring people for the project who have a good track record, paying well for key positions, doing a thorough background check, and having your own project manager. By implementing these solutions, companies can overcome this challenge and ensure that their outsourcing project is a success!

11. Quality assurance:

Quality assurance is another challenge that businesses face when outsourcing IT services as they want to outsource IT staff to cut costs but also get quality resources and work outputs at the same time.

To overcome this challenge:

  • Companies should ask the outsourcing company for previous work samples, and ensure they use project management methodology and DevOps practices. They should also establish clear expectations with a Service Level Agreement (SLA) that lists services provided by the outsourcing firm and their costs.
  • Additionally, it’s important to have someone on the team who can inspect the remote team’s work. When considering cost versus quality, it is essential to recognize that both are important factors and should not be compromised.
  • It is important to understand that higher quality often comes with a higher cost and that cost should not be the sole determining factor when selecting an outsourcing partner. Instead, the quality of the software produced should be the primary consideration when choosing an outsourcing firm.

12. Limited or no knowledge of technology:

Limited or no knowledge of technology is another challenge that businesses face when outsourcing IT services. It can be difficult to understand the latest technologies and trends, making it difficult to make outsourcing decisions. In particular, if you are not a tech-savvy person, it can be complicated to communicate the technical requirements to an offshore team.

To overcome this challenge:

  • One solution is to onboard a technical manager on-site as a point of contact between your company and the offshore team. This person can help bridge the gap in technical knowledge and ensure that the project is moving in the right direction.
  • Another solution is to research and educate yourself on the latest technologies and trends. By understanding the technical requirements of your project, it becomes easier to hire developers from an offshore country that match the required skill sets.

Ultimately, it’s important to remember that having a good understanding of technology is essential for making informed outsourcing decisions and ensuring the success of your project.

Conclusion

It’s important to note that while outsourcing IT services can come with a number of challenges, they can all be mitigated with the right approach and partner. By being aware of these challenges, having a plan to overcome them, and implementing best practices, companies can enjoy all the benefits that outsourcing IT services have to offer such as access to a pool of talented developers and cost-cutting.

Here at BorderlessMind, we understand the challenges associated with outsourcing IT teams, which is why we offer the best skilled, competent, and offshore IT professionals to support your business throughout the process. BorderlessMind has established its reputation as a reliable provider. With our help, you can rest assured that your outsourcing project will run smoothly and be a success.

We have the experience and expertise to offer solutions that address the common challenges discussed in this post, including communication, cultural differences, management, and quality assurance.

With our help, businesses can trust that their outsourcing initiatives will be executed seamlessly and effectively, and companies will be able to successfully navigate such unforeseen challenges and gain the freedom to focus on growing their businesses instead.

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