In today’s fast-paced Business world, driving efficiency is often at the heart of growth plans. When thoroughly planned, Outsourcing plays a vital role in ensuring productivity is high; enabling managers to focus on business development and disruptive innovation.

If you’re a business owner or manager and are considering outsourcing of any type, you’re probably aware of the huge risks that can be involved. If you’re not, you should be. Placing the future of your business into the hands of strangers can go haywire at any moment. While hiring staff that you may never meet face to face, might seem like a gamble, there has never been a better time to try to leverage outsourcing, especially once you know how to avoid some of the more common pitfalls involved.

So what specific steps can you take to ensure everything runs smoothly? There are a lot of things but this blog will talk about 5 major things that one should consider while outsourcing.

1. Cost Efficiency- Beginning an outsourcing relationship has costs that may not come to mind at first. For instance, when choosing the right vendor, you will lose time and may encounter fees from networking websites or other sources. Negotiating and drawing up a contract in some instances can carry legal fees, and continuing the relationship will have costs in time or possibly travel.Yes, big money can be saved by outsourcing projects to a skilled labor force with relatively low cost, but those savings can quickly disappear if taxes are high. One has to evaluate risks such as the loss incurred to one’s business because of unexpected disruption caused by political instability, natural disasters, labor unrest, and so on.

2. Business Reputation- Businesses live and die by their reputation and in the social media age, each product and service they offer is scrutinized under the microscope. It’s therefore vital that the highest possible standards are maintained continuously. Failing to take your reputation into account before outsourcing may be the biggest mistake you ever will make.Also, your own website is the beginning and end of your presence online, so make sure people will always be able to find you. It’s a common mistake to let a supplier control your domain, and can be potentially disastrous. When someone else owns or registers your domain name, your site could be taken down, further hampering your firm’s reputation.

3. Innovation- Outsourcing innovative processes such as software development often breeds the best results, as internal team members may be too close to the business’ existing processes to ‘think outside the box’. When successful, such innovation is highly lucrative. By researching and identifying a new market, the business will immediately become the industry leader, leaving competitors in its wake. If companies fail to do so, their competitors will; so outsourcing wisely in areas such as innovation is critical. A partner must be agile, able to rapidly adapt to ever changing business needs, all while working very closely with the company.

4. Communication and Collaboration- It’s vital to keep certain points in mind before outsourcing project work to a third party, especially when considering offshoring. UK businesses which turn to Asian companies will likely find daily iterations are difficult to manage due to the vast time differences so time for communication is limited and can seem rushed. This will either impact product quality, or at least result in unnecessarily long lead times. Also cultural differences shouldn’t be underestimated; companies frequently need to work much harder to overcome these than is often considered up-front.When collaborating, it will take time to select the vendor or workers that will fit best with your needs, so resist the urge to hire the first party you contact. Look out for the strengths and weaknesses, weigh your decision and then take the final call.

5. Calculated Risk- Outsourcing is often unfairly viewed as a risky option, and although there is risk involved this depends on the type of processes outsourced. If core business practices are offshored the risk is huge, as you have little control over what is the central element of your organization, which can have disastrous results. On the other hand, outsourcing development projects should be viewed as well-calculated risk.When talking about risks, it is of utmost importance that you maintain control over the outsourced components. The best way to do this is to have staff whose sole responsibility is overseeing the relationship.

   And so, putting all these points together, all good things must come to an end, and hopefully your outsourcing partnerships will end gradually and on mutual terms. However, it’s best to be prepared in the event of the worst- for example, if demand increases drastically or a vendor goes out if business. Have a plan in place that you could put in action tomorrow if needed. When you’re well-prepared, outsourcing can grow your company in key areas. By avoiding the pitfalls in this list, you’ll be able to focus on increasing productivity, quality, and savings- and isn’t that the point?