By: Ritesh Sanghani

We are in year 2014 the age of outsourcing it is commonly known as subcontracting, freelancing, crowd sourcing and virtual assistance. Outsourcing non-core operational activities allow companies to grow rapidly and save time, cost and get access to most advance technologies, skills and infrastructure.

The success of outsourcing depends on selection of right service provider and task to be outsourced because it is a strategic decision and mistakes can lead to even business failure.

Based on years of experience in outsourcing industry here are some of the most crucial outsourcing mistakes entrepreneurs made.

Management Awareness (there is no need for many managers while opting for outsourcing):

This is not true and a big blunder committed by entrepreneurs. Note that contractors and freelancers like any other business manage their own internal procedures but they cannot manage your business. Don’t over-manage remote workers, but don’t anticipate them to manage your business. Hire and train your own managers for internal and external work projects.

With the assistance of high-speed internet our workers can be anywhere across the world. Note that labor rates are lower in some countries but culture and language match are the real keys to productivity. Countries that are near you may be in the same time zone for stress-free communication, but lack the skills you require. As with real estate, it is still about location.

Over Estimating Cost Saving (let us cut costs by outsourcing everything from now onwards):

There are entrepreneurs who get happy to save costs and start to outsource everything and anything that lands on their desks. However; perfectly outsourced tasks are the ones that are outside your core competency, can be specified in detail, and managed with quantified deliverables and checkpoints.

Bidding Model (fixed price bidding is the only effective outsourcing model):

Getting a fixed price bid works for well-defined short-term projects encompassing blogging or programming. But trying to utilize it on call centers, affiliate marketing, or even data entry probably won’t be effective. Do your research with peers, and check the alternatives on every project. Be malleable.

Compensation (reasonable compensation is the lowest price we can negotiate):

Outsourcing won’t work if you do not keep the virtual team happy. Dissatisfied workers will conduct a poor job hence; cheap is not a good deal. Reasonable compensation is usually something higher than the market price at the outsourcing location, but lower than you would have to pay in your location.

Adopting Cultural Differences (i anticipate everyone working for me to embrace my culture):

The outsourcing team will always try to familiarize to your situation, but success depends on their cultural work ethics, time constraints, social status, language quirks, and a general attitude. Acclimatizing to culture goes both ways, and training is the key. Recognize and embrace differences.

To Summarize, an entrepreneur should never approach outsourcing as a reasonable and easy method of offloading work. With contemporary technology, and worldwide reach, it should be seen as a significant tool for developing a well-organized, lean, and competitive business, enhanced to give you more time for strategic focus. As every entrepreneur swiftly learns, their time is a scarce resource, and it cannot be outsourced. To expand the business, every entrepreneur requires spending more time working on the business rather than in the business.

About Author:
Ritesh Sanghani ( has an overall experience of 15+ years in International Marketing. He is responsible for ensuring customer satisfaction by value addition and thereby building long-term and mutually beneficial business relationships at Hi-Tech BPO ( Mr. Sangani’s background includes a sound knowledge of IT and ITES service sector.