Red Flags To Watch Out For When Outsourcing To A Provider

Many businesses have now realized the various benefits of outsourcing. The number of  businesses that outsource functions has continued to increase. 65% of companies that previously outsourced plan to increase outsourcing. Working with outsourcing companies helps you focus on your core business. In return, this will increase productivity and generate more revenue for your business. 

Choosing the right provider can be daunting, given the many options available. You can also easily fall into the trap of choosing the first company that comes along the way. In this article, you will be informed of the red flags you should avoid when finding an outsourcing provider. 

Red Flags You Should Avoid When Outsourcing

  1. They Do Not Have A Portfolio of Work 
  2.  Incompatible Company Culture 
  3. Innovation Apathy 
  4. They Give Estimates Upfront Without Asking Questions 
  5. Poor Financial Health 
  6. Weak Tech Infrastructure 
  7. Claim To Be Jack of All Trades
  8. Poor Data Security Practices 
  9. One Solution Fits All Approach 
  10. Promises High Rankings 

Let’s get started.

1. They Do Not Have A Portfolio Of Work 

It is understandable if you do not have a long list of clients, but not being able to show their portfolio of work is a different thing. While the provider you have in mind may not be working with many clients, they should be able to show their portfolio of work upon your request. If they are unwilling or do not have something to show, it is a sign that you are better off looking for another potential provider. 

A portfolio of work will help you determine their working style and the types of results they have received from their clients. Check if the clients they claim to work with are still connected with them. The work portfolio will help you gauge what the provider can and cannot do. The provider can easily claim that they have experience and can deliver work, but if there is no proof it can be hard to trust them. 

At least look for testimonials or reviews from clients to help you assess whether the provider will be the right partner for you. In the absence of the work portfolio, it will help give you an idea of the overall level of client satisfaction. Without testimonials and reviews, it is time to move on to another prospect. 

2. Incompatible Company Culture 

Finding a provider with compatible company culture is vital to the success of the business partnership. 46% of job seekers cite company culture as an important factor in applying for a company. Just as a candidate’s alignment with your company culture is important, so should your potential business partner be. 

Compatibility of company culture can greatly impact employee engagement and satisfaction. It would be difficult to establish a harmonious relationship if their company culture is incompatible with yours. It is impossible for your partnership to become successful if you do not have similar values and culture. 

An incompatible company culture may lead to issues that can affect the ability of your business to succeed. That is why you and your business partner must share the same business goals and agree on how to achieve them. At the end of it all, compatible company culture can result in improved employee productivity and increased profitability for your business. 

3. Innovation Apathy 

Innovation apathy happens when a certain company is unwilling to leave its comfort zone. They will stick to the work structure already in place no matter what. Times have changed, and businesses must implement a certain level of creativity and innovation. Businesses must learn to adapt to changes to attract more customers. This holds true when looking for an outsourcing provider.  

When an outsourcing provider is content with the structure and processes they are already implementing, it is a warning sign of innovation apathy. They are not able to bring new ideas and solutions to the table. This is an indication that they do not have the intention to grow or sustain a business relationship. 

Innovation apathy can be a barrier to growth. If the provider you have in mind is not keen on keeping up with the changes in the industry, there is no way that your partnership with them will work. Move on and look for another potential provider to partner with that is ready to help you grow as a business. 

4. They Give Estimates Upfront Without Asking Questions 

Before agreeing to a partnership, a responsible outsourcing provider should first “get to know” your company. They should first interview you so that it will be easier to set expectations. How they ask questions will give you an idea about their experience in the field. It will also reveal the integrity and attitude of that provider. 

If they provide you with project estimates right away, it could be a sign of desperation on the part of the provider. It only means they are after the profit and not delivering results. If they agree immediately to every service you inquire about, there is a chance that they are planning to improvise. With this approach, you will encounter problems along the way. 

They should ask questions to understand the details of your project. They need to have the minimum amount of information before giving you an estimate, depending on the level of effort. If they ask more questions regarding the process, expected timeline, and needed resources, it means that they have the resources to serve you well. 

5. Poor Financial Health 

For your outsourcing partnership to be successful, your prospective provider should have a stable financial record. You should check their balance sheet, current assets and liabilities, current ratio, and non-current assets and liabilities. Knowing the financial health of your potential partner will help you determine whether they are a suitable partner. 

An outsourcing company with a poor financial problem indicates their inability to manage their resources and partnering with them will only make them a liability for your business. Cost can have an impact on your choice of an outsourcing partner. But cheap does not necessarily translate to quality. 

Thus, you should research and check the financial condition of the provider you plan to partner with. That is why you should have a Plan B if the first one does not meet your expectations. 

6. Weak Tech Infrastructure 

In today’s digital age, you want to make sure that you have the tools and technology to get a job done. The provider you have in mind should have the system and equipment that can handle the most rigorous outsourcing tasks. In addition, they should have the resources and updated technology to seamlessly handle your changing business needs. 

Technology infrastructure is important in determining the quality of service the provider can offer your clients. Your provider should have a solid contingency plan in case your operations are disrupted. They should have enhanced technological capabilities and the latest infrastructure to deliver high-quality services to your business. The potential provider should be able to fill the technology gap you may be experiencing right now. If their tech infrastructure cannot support your business functions, it is another red flag you should avoid. 

A weak IT infrastructure may result in downtime. According to research by CA Technologies, 44% of businesses consider downtime as damaging to employee morale. It can impact their productivity and ability to collaborate. That is why you need to find a partner with a solid IT infrastructure. 

7. Claim To Be Jack of All Trades

If the provider claims that it can help you in all aspects of your business, it is definitely a red flag. It is impossible to have knowledge of all functions. Oftentimes, a jack of all trades could be inefficient and lazy in other functions. For outsourcing to be effective, it should focus on one key business area only. 

If the provider claims that they can do everything, you should be extra cautious in dealing with them. It means that their focus is on making a profit only and not on providing quality. By hiring a provider that claims to be a jack of all trades, you deprive your business of your own expertise. By being good at everything, you deny your business of the skills you need to stand out from the competition. 

It takes years of experience in order to become good at something. No matter how many YouTube tutorials the provider has watched and online courses they have taken, if they do not have the experience, they are still bound to make mistakes. Aside from that, you will not be able to maximize your potential by working with a company that claims to be a jack of all trades. 

8. Poor Data Security Practices 

Cybercrime has risen 10% in the past year. According to data from IBM, data breaches cost businesses $9.44 million in 2022. Thus, it is important for companies to protect customer data to ensure customer loyalty and retention. Data security should be one of your top priorities if you want the customer to keep doing business with you. 

In choosing an outsourcing provider to partner with, You don’t want a customer’s credit card information falling into the wrong hands. The hacker could potentially use the data they obtained to promote their vested interests. This could impact not only your relationship with the customer but also your reputation as a business. 

Look for an outsourcing provider that will protect customer data at all costs. They should have knowledge of the latest security protocol and apply it to your business. If you are an ecommerce business, ensure that the partner you have in mind is knowledgeable about PCI-DSS compliance. This way, your customers will know that you value their business. 

9. One Solution Fits All Approach 

Different functions need different solutions. If the provider offers you the same solution they are offering other clients. It is a sign that the provider is up to no good. Just because one solution proved effective to one client does not mean it will work for you as well. Your needs may be different from other businesses and hence may require a different solution. Offering one solution for all types of issues means that the provider may be after getting paid rather than getting the outcome you need. 

Just like two individuals are unique from each other, so too is your business. You may be targeting a different audience or offering a different product. Your prospective provider should know this and tailor the solution they will offer according to the needs of your customer. This means they should have a different marketing strategy based on what the customer is looking for. 

So if the provider you plan to work with will use the same approach with your clients even if it is not the right strategy,  think twice before dealing with them. You will only be wasting your time and effort. They should be helping you meet your goals and KPIs based on the requirements you set forth. 

10. Promises High Rankings 

Your SEO rankings are dependent upon certain factors and cannot be manipulated.So if a provider tells you that they can increase your rankings, be cautious in dealing with them. Chances are they will be employing black hat SEO, which can impact your website eventually. Higher rankings can happen in due time but not right away. 

Yes, black hat SEO can help improve your search engine ranking but once Google finds out that you violated their guidelines, you could be flagged and penalized. This could hurt your reputation and bring down your rankings. Worse, your pages could be removed from search results. 

A reputable outsourcing provider should never promise higher rankings. Instead, they will work with you to boost your rankings in a legal manner. Higher rankings take time so be patient and avoid providers that offer an instant improvement 

Outsourcing offers a wide range of benefits for businesses. When done right, it could deliver huge returns for your business. Steer clear of businesses that are only after your money and hurt your reputation. 

Why airisX Outsourcing Is The Right Choice?

Outsourcing allows you, as a business, to focus on your main competencies and operations and forget the hassle of sharp learning curves when the task falls outside your company’s core area of business.

By outsourcing to a leader like airisX, you will be able to scale up quickly by getting the right resources, processes and technological infrastructure. No matter what your scaling requirements are, airisX will give you the best-optimized solution and you will be able to focus on satisfying your customers. Your back office operations will be simplified, giving your users a high-quality experience. 

Get in touch with us to get a customized solution tailored to your business needs. 


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