What Are the Risks of Outsourcing to Remote Locations

What Are the Risks of Outsourcing to Remote Locations

We all know outsourcing services can greatly reduce cost while improving productivity. If you want to reduce costs even more, you should consider outsourcing services to remote locations where labor costs are lower and the market is rich in talent. But as with all ventures there are risks to outsourcing to remote locations. The good news is these risks can easily be mitigated:

Political and Social Unrest

The best outsourcing destinations in the world also have a reputation for political and social unrest. The Philippines has been in the news lately and has made headlines more often than it has in previous years.

A new volatile, unpredictable and unconventional administration has seen the country’s equity markets spiral downward and a spike in concerns on safety, peace and order.

But you should not worry about outsourcing to the Philippines because it is business as usual. Filipinos have gone through similar periods of unrest and continue to remain focused on accomplishing tasks.

If there is stoppage due to unrest, companies have contingencies in place such as having office-grade facilities at home for employees to work with.

Language Issues

Language issues will persist because perspectives will always be different. How you relay instructions may be perceived differently by people who reside in remote locations. Some may feel intimidated to ask questions because they believe it may be taken against them.

The best approach is to request the remote worker for feedback. Instead of asking if the instructions were understood, ask for the instructions to be fed back to you. More specifically, instruct the remote worker to take you through the entire process.

From there point out mistakes and correct the remote worker. Keep the feedback loop going until you are certain the instructions have been understood 100%.

Cultural Nuances

When you outsource services to a remote location, you should always anticipate cultural nuances to influence the working relationship. Each country has its unique culture which has been shaped over the last few generations. The practices and behaviors of a people are a result of these experiences.

You have to research and develop an understanding of these practices. If you plan to hire virtual assistants or engage the services of a third party provider from the Philippines or India, you have to respect their traditions and practices. These have been inculcated in their values and are part of who they are.

Concerns on Infrastructure

Infrastructure should be a serious concern because it could affect the quality and timeliness of deliverables. The premiere destinations for outsourcing services such as the Philippines, India, Indonesia and Malaysia have been flagged for having slow Internet service.

In the Philippines, many outsourcing services providers use multiple back-ups with some enlisting the services of foreign companies such as PacNet Australia as the primary provider. It is also a standard feature to have 24/7 back-up power in the event of electrical outage.  

Virtual assistants will usually have at least 3mbps primary ISP and 1.5mbps for back up.

Outsourcing services as a strategy has to be subjected to the same risk-reward process for decision-making. Overall, the benefits remain much greater than the risks. The keys are to be prepared before undertaking the venture and ensuring contingencies are in place for any eventualities.


Posted in Blog, outsourcing.

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