Outsourcing decision mistakes UK SMEs make

Key takeaways

The most common outsourcing decision mistakes UK SMEs make happen before any work moves: choosing on hourly rate alone, outsourcing too much at once, handing over an undocumented process, skipping the baseline, and signing long terms before seeing results. Each is avoidable with a scorecard, a pilot and a named internal owner.

• Deciding on hourly rate instead of cost per task.
• Outsourcing several processes at once instead of one.
• Handing over an undocumented or changing process.
• Skipping the baseline, so success cannot be measured.
• Signing long minimum terms before seeing results.

Why do outsourcing decisions go wrong?

Most go wrong because the decision is made under pressure, on one number, without a way to measure the result. The owner is overloaded, a quote looks cheap, and the handover starts the next week. The problems that follow, such as poor quality, confusion and disappointing savings, usually trace back to that rushed decision.

• When should a UK business consider outsourcing?

Mistake 1: choosing on hourly rate alone

The lowest hourly rate rarely gives the lowest cost per task. Providers without supervision or quality checks produce rework that your team fixes, and some quotes exclude cover or management. Compare cost per task, include management time, and check what is included in the price.

• Work out your cost per task before you outsource
• The hidden costs of outsourcing

Mistake 2: outsourcing too much at once

Moving several processes together multiplies questions, reviews and risk, and makes it impossible to tell what is working. Start with one process, get it running well for 8 to 12 weeks, then add the next. The habits you build on the first one make every later handover faster.

• What should you outsource first?

Mistake 3: handing over an undocumented process

A provider runs the process you describe. If it lives in someone's head, or changes every fortnight, the provider inherits the confusion and quality suffers. Write down the common cases and exceptions first, and wait until the process has been stable for about three months.

• Is your business ready to outsource?

Mistake 4: no baseline and no measures

Without a baseline, nobody can say whether outsourcing worked, and opinions replace evidence. Record two weeks of reply times, volumes, errors and internal hours before the change, agree two or three measures, and review them weekly.

• Run an outsourcing pilot before you commit

Mistake 5: long terms before results

A 12 or 24-month minimum term shifts the risk to you before you have seen any work. Prefer short notice terms, at least for the first process. If a provider offers a lower rate for a long commitment, take it only after the pilot has proved the service.

• BPO contract terms to check before signing

What other mistakes are common?

Several others come up regularly and are just as avoidable.

• No internal owner, so questions go unanswered.
• Skipping the processor contract or sharing logins.
• Outsourcing the work customers choose you for.
• Telling staff late, or letting them hear from others.
• Judging the result on the first fortnight.

• How to tell your team you are outsourcing
• GDPR and offshore outsourcing

How do you know if you have made one of these mistakes?

The symptoms appear in the first two months. If your team is still checking every piece of work, if nobody can say whether things are better, if the provider keeps asking the same questions, or if the invoice is higher than expected, one of these mistakes is usually behind it. Most can be fixed without starting again: narrow the scope, write the process down and set measures.

• Your team is re-checking everything after week six.
• Nobody can say whether service has improved.
• The same questions come back every week.
• Invoices exceed the budget without more volume.

• Quality assurance for outsourced teams

What does this look like in practice?

A pattern we see in UK SMEs switching provider after a poor first experience: the first arrangement was chosen on rate, covered three processes from day one, had no written process and a 12-month term. The second attempt starts with one process, a baseline, a pilot and 30-day terms, and is running well within the quarter.

• See client work
• Switching BPO provider without losing service
• BPO Solutions for UK businesses

Decision checklist

Check these before you commit.

• Compare cost per task, not hourly rate.
• Start with one process.
• Document it and check it is stable.
• Record a baseline and agree measures.
• Use short notice terms for the first process.
• Name an internal owner and tell staff early.

Next step

Tell us what you are about to outsource and how. We will point out any of these mistakes in the plan before they cost you.