- Overview
Outsourcing is one of the most common business practices that has taken place over the past twenty years. Manufacturing was the first industry to be outsourced to other countries, and when companies saw how lucrative the practice looked on the surface they followed suit with other industries. Customer service, web application development, and other services are all being moved overseas due to a lower labor cost. However, there are several mistakes that companies make when outsourcing products or services. This is especially true for web application development services in which the product is so integral to the businesses that they are provided for.
- Expecting An Easy Transition
The first mistake that many companies make when outsourcing their web application development services is that they expect the transition to be easy and smooth. Whenever a product or service is outsourced to another country there is always a time period where time and money must be spent in order to make the process go as smooth as possible. Money spent during this process should be viewed more and an investment than an expense. It is far more expensive to not put the time or money in on the front end and just expect everything to go smooth on both ends. Some employees will lose their positions due to the transfers, and this must be kept in mind by the company. In addition, many people in the United States view outsourcing as a bad thing, and the company may take a public relations hit when the word gets out that they are moving their products or services overseas.
- Focusing On Cost, Not Customers
Another common mistake that can be made when the outsourcing web application development software is that the only focus of the whole project is on cost and not on the customer. Although it is true that the cost of a product or service is less expensive when outsourced due to cheaper labor rates in other countries, companies must keep in mind that the quality can suffer as well. Just because a customer service team can cost ten percent overseas as in the United States, that does not mean a value added move would be to outsource the product. If the overseas customer service team is less effective in keeping customers happy and customer retention starts to drop, it will actually cost more in the long run for that team to be outsourced rather be kept at home.
One of the biggest principles of business is to keep the customer happy. Before outsourcing any product or service, especially web application development, the question needs to be asked if the increased profits are just for the short term before customers start leaving.
- Thinking Short Term
Finally, a mistake made by many companies who choose to go the route of outsourcing is thinking short term. Moving a product overseas because it will save one million dollars is not worth it if you lose two million dollars in sales because the customer believes the quality has dropped off too much. In addition, one of the most important intangible assets that a company has is its brand name. Whenever a product or service is outsourced, there are thousands of people that must lay off and the brand name of the company takes a hit. Overall, if companies would start focusing on the long-term effects rather than the short term gain many outsourcing mistakes could be avoided altogether. It is much cheaper to prevent a mistake on the front end rather than trying to fix one after the fact.