10 Outsourcing Myths: Which Is True About Outsourcing?

Posted on:
January 10, 2023
min read
Mark Daniel
Table of Contents
What are the benefits of outsourcing to developing countries?
What are the challenges of outsourcing to developing countries?
Top 5 Most In-demand Developing Countries for Outsourcing
What are some successful examples of companies that have outsourced to developing countries?
What are the best practices for outsourcing to developing countries?
10 Outsourcing Myths: Which Is True About Outsourcing?
KDCI Outsourcing
September 6, 2023

Despite being a common practice in the industry, many businesses still shy away from outsourcing. They have this preconceived notion that outsourcing only works for big companies with better financial safety nets to cushion themselves from the risks of outsourcing. But this is just among outsourcing myths that experts have proven wrong long ago. There are dozens of outsourcing myths out there that blur the line between what is outsourcing and what isn’t. In this blog article, we help you debunk the most common outsourcing myths that stop any business from seeing the benefits of outsourcing.

Debunking Common Outsourcing Myths: Which of the Following is True About Outsourcing?

A Filipino business owner engaged in a deep conversation with a Filipino outsourcing provider in a modern office setting.

Myth #1. Outsourcing results in loss of business control

This widespread misconception discourages companies from outsourcing their non-core functions. Companies worry that working with a service provider may result in less control over their business processes. This is not actually true, though. Outsourcing service providers fully engage their clients with everything that concerns their business operations. Clients get real-time updates from their dedicated account manager about their project status, team performance, and KPI reports. It’s important to note that a Service Level Agreement (SLA) is established between businesses and outsourcing service providers. This written document outlines the metrics used to gauge service quality as well as penalties that may be imposed if predetermined service levels are not attained. This information is recorded in a system, and businesses can access it whenever necessary. In addition, service providers create dashboards to give businesses transparency into their team performance. Hence, clients can maintain control and oversight while focusing on their high-ROI activities.

Myth #2. Outsourcing only benefits big companies

The idea that only big companies benefit from outsourcing is among common outsourcing myths. Regardless of their size, companies can benefit from outsourcing their non-core functions to low-cost countries like the Philippines. Outsourcing is ideal for high-growth companies that require greater resource flexibility to meet customer demands during peak seasons. In addition, outsourcing is perfect for start-up companies that want to save on operational costs by having their service provider handle their recruitment, training, facilities, and equipment.

Myth #3. Outsourcing comes with cultural and language barriers

Most businesses assume they would encounter communication problems with their offshore team because of differences in culture and language. The truth is your outsourcing venture is as good as your outsourcing partner. That means outsourcing to a country that’s proficient with your language and has a strong affinity with your culture can help you succeed in outsourcing. The Philippines, for example, has been the top outsourcing destination of US companies for voice-related services. Because of the country’s superior English proficiency and affinity with Western culture, US companies are confident that their offshore agents can handle their customer phone calls with care and hospitality.

Myth #4. Outsourcing only offers short-term solutions

Businesses believe outsourcing only offers short-term solutions because their competitors only outsource their non-value-added tasks. The fact is that outsourcing provides small and medium companies with a long-term business solution, particularly for those that are just starting and want to scale. Consider Canva, a graphic design company that started with only six offshore employees in the Philippines. In 2014, Canva decided to move its back-office work, graphic design, and customer service to the Philippines. Melanie Perkins, the CEO, said they invested in Philippine outsourcing because of its family atmosphere that inspires creativity. By 2018, the company had increased its manpower to around 250 staff and was valued at $40 billion last 2021.Canva is living proof that outsourcing to the Philippines provides long-term solutions and helps a company tap specialized skills at a lesser labor cost.

Myth #5. Outsourcing causes project delays due to time zone differences

Most companies presume that outsourcing to a service provider in a country with a significant time difference can cause collaboration issues. For instance, they think their offshore staff might not read a message they send on Monday afternoon until Tuesday morning. However, this is not true with Filipino employees who work on flexible work hours .No matter where the client is situated, Filipino employees are happy to work on different shifts, including night shifts, weekends, or holidays. Your offshore team will be working hard, even outside business hours, to meet the deadlines. In fact, taking advantage of time zone differences is possible. For instance, when your in-house staff in the US finish their shifts, those in the Philippines start. This allows for increased operating hours, particularly in areas like customer service, and results in faster completion of projects.

Myth #6. Outsourcing threatens data security and privacy

For most businesses, one of the key barriers to outsourcing is the potential data and security breach. Some companies worry that leaking their highly-confidential business information could result in reputational, financial, and legal consequences. However, this outsourcing misconception doesn’t hold any truth unless you outsource to a vendor with a history of fraudulent activities. It’s important to note that most outsourcing service providers have advanced security controls to safeguard the data and privacy of their clients. Some reputable service providers even adhere to industry regulations like HIPAA (Health Insurance Portability and Accountability Act) for keeping a patient’s information safe and General Data Protection Regulation (GDPR) for handling data belonging to European citizens.

Myth #7. Outsourcing delivers low-quality services

Since outsourcing involves entrusting business operations to an external service provider, some businesses conclude that they may get low-quality services. But the truth is you’re more likely to receive subpar services if you did not evaluate your outsourcing partner thoroughly. That means signing a contract without understanding the service provider’s culture, internal processes, and infrastructure. Trustworthy outsourcing companies have a highly-skilled workforce that undergoes extensive training to meet all your business objectives. They have established quality assurance (QA) processes to improve your service quality as well as increase your operational efficiency. And most importantly, they maintain industry-leading technology to ensure your operations are aligned with global standards.

Myth #8. Outsourcing is all about reducing labor costs

Outsourcing has been a standard procedure for big companies seeking to reduce their labor costs to improve their bottom line. Yes, it’s the primary reason why companies outsource, but there are more reasons that go beyond cost reduction. Most companies offshore their business operations for the following reasons:

  • Access specialized talent not available within their organization
  • Improve productivity by lessening their in-house team’s workload
  • Scale their operations during business peak seasons
  • Concentrate on critical functions and high-ROI activities
  • Take advantage of the newest technology in their industries

Myth #9. Outsourcing takes more time than building an in-house team

Among outsourcing myths surrounding the BPO industry is that building an in-house team requires less time than outsourcing. But the reality is that it’s the other way around. When you build an in-house team, you go through a series of posting job ads online, screening resumes, and interviewing applicants. Sometimes, it takes you weeks, even months, before you finally onboard the perfect candidate for your organization. Conversely, outsourcing service providers make it easier for you to build your offshore team. All you need to provide is a job description with clearly defined responsibilities and qualifications. In addition, they have excellent training programs to fully integrate your team into your internal processes.

Myth #10. Outsourcing can succeed on its own

Outsourcing doesn’t mean leaving all your mundane tasks to a service provider and expecting great results after a few months. Although some of your non-core functions are easy to do, it doesn’t mean your service provider won’t need any of your guidance. Outsourcing is a two-way street. If you are not constantly communicating with your outsourcing partner, it will take so long before you finally see positive ROI from your outsourced services. That said, it’s crucial to establish the frequency of communication with your service provider, such as how often your account manager will hold meetings, issue reports, and make calls. By doing so, you avoid poor communication that leads to misalignment of results and expectations.

Outsource to the Philippines and Hire the Best Ecommerce Experts

Are you looking to scale your Ecommerce operations and improve your resource flexibility? Then, hire the best Ecommerce experts in the Philippines! Reduce your operational costs by up to 70% as we handle your training, recruitment, equipment, and facilities so you can focus on growing your bottom line. Consider KDCI, a premier Ecommerce outsourcing company in the Philippines. Our company offers scalable staffing solutions in the field of Ecommerce, finance, creative design, customer support, digital marketing, and web development. We can optimize your Ecommerce sites for higher conversion rates and help you become a successful seller on major marketplaces. Click the button below to get a FREE consultation with our outsourcing experts! Contact Us

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