Top 10 Outsourcing Challenges and How to Solve Them

Were you strolling around the internet to understand outsourcing challenges and solutions? Though these challenges may take some effort, experts suggest some ways to mitigate them. But before we get into outsourcing challenges with their solutions, let us first understand the hype about it. Outsourcing mainly offers cost-effectiveness and smooth business operations. In addition, it also allows enterprises to access the talent pool. During the pandemic, with remote work being the only option, companies came forward and tied knots with outsourcing partners.

The same is continued as outsourcing companies‘ general efficiency to corporates along with the liberty to focus on their primary goals. And that is the reason more companies are joining the outsourcing trend.  Statista reports that in 2019, $92.5 billion was the global market worth of Indian outsourcing services. Though the market is wide and looks lucrative, there are a few outsourcing challenges that need to be addressed if you’re planning to dive into that pool.  In this article, we explain the challenges of outsourcing with their solutions. So, without any further ado, let’s understand how companies can overcome outsourcing challenges.

Outsourcing Challenges And Solutions

Outsourcing has become a popular solution for different types of businesses. As seamless as it may seem, there are some cautions you need to consider before you hire any outsourced service. Consider the following outsourcing challenges along with their solutions.

1- Finding a Trustworthy Vendor

A reliable outsourcing partner is essential for businesses that successfully grow into international markets. Sometimes it may seem arduous to find the best partner for your outsourcing needs. One of the primary issues with outsourcing that many organizations have is that they need to perform a thorough background check on the contractors. It can lead to the project you contracted out being of lower quality.


The firm’s expertise, the normal project size, the number of projects and clients it has worked with, the company’s ranking and evaluations, its access to cutting-edge technology, etc., are some considerations to consider when picking the ideal vendor. However, the list depends on the type of organization. Look for a reliable outsourcing partner by asking them the key queries you may have.

2- Lack of Experience with Outsourcing

Experimenting with something new for business can be overwhelming. You need to familiarize yourself with common concepts, the workflow, or recommended practices. It is a challenging undertaking that should be considered. Thus, communicating your vision to another group of people, especially someone you have never worked with before, is a major outsourcing issue or challenge.


A knowledgeable vendor will direct you through the process and help you overcome the possible outsourcing challenges by creating a strategy to reduce risks. A cooperative vendor will help you understand the needs, undergo the discovery procedure, and select the most experienced resources. However, it is critical to remember that outsourcing may pose threats. If you’re equipped to tackle the associated risks, only then choose to outsource.

3- Loss of control

Monitoring or controlling various project tasks is one of the primary responsibilities of a business owner to become successful. There are a lot of control differences between what you have in-house and what you outsource. Losing control over an outsourced project is a common outsourcing problem. Thus, it is highly likely that you may also face it. The third party may not be able to match your company’s management systems. It may also lead to comprising with the quality of service delivered as per your expectations. However, this outsourcing challenge has a solution.


The task of dealing with this outsourcing challenge and solution can be absolutely eliminated if you check the background of your service provider. Going through their procedure and implementation process is the homework you need to do to ensure proper control over your project. Other things you should consider are tracking KPIs, meeting schedules, recognizing the point of contact, and verifying other vital details.

4- Communication

If you’re making your debut in outsourcing, communication can be a potential outsourcing challenge you may face. It becomes especially important for cases where culture or language is a barrier between the business owner and outsourcing partner. Poor communication hampers the coordination of tasks, ultimately leading to low-quality project implementation. However, as we explain the challenges of outsourcing, we also have their solutions together.


You can ensure proper communication by setting up a timeline of regular calls with your outsourcing partner. You can use Zoom, Google Meet, or any similar platform for this purpose and set up reminders in your calendar. Using a standard mode of communication and efficient tools, you can escalate the progress of your project.

5- Language and Culture Issues

It is a general practice to outsource services from a region or country that offers them at cheaper rates. Hence, language and cultural differences become major outsourcing challenges in such cases. Business owners may entirely indulge themselves in achieving tasks during such problems. Therefore, innovation and quality are compromised, severely impacting the implementation of the entire process.


Proper communication is the simple solution for this outsourcing challenge. Before you outsource a service provider, check if their personnel know English. If not, you can hire a translator and include them in your regular meetings for a clearer understanding. This will ensure smooth communication and help you track the project’s progress.

6- Unpredicted expenses

As said above, most business providers outsource services to save money and time to gain a competitive advantage. Outsourcing strategies are usually cost-effective compared to handling an in-house team. However, vendors who do not clearly specify their service charges may trouble you later with additional costs. So, it is always better to compare the estimated prices of your selected vendors along with their process of expenditure. All the additional costs, such as that troubleshooting, redeployment, updates, and more, much be specified at the beginning, allowing you to manage your budget.


Clear communication is the classic solution to this outsourcing issue. It leads to transparent cost estimation with proof of statement or contract. Laying down your budget clearly an help you align the expenses with the cost estimation provided by the vendor.

7- Security and Privacy

When you outsource services, it becomes necessary to disclose your business details and holdings. Though this is entirely normal in the outsourcing process, it still poses a threat to the privacy and security of your business information. So as we discuss this outsourcing problem and solution, note to make it an essential part of your outsourcing process. Checking data protection standards, security protocols, privacy measures, and IPR concerns involving patents, secrets, and copyrights is imperative before hiring an outsourcing partner.


Setting up a stringent privacy protocol can help you secure your information. It will serve as a criterion for the vendor to guard the security and privacy of your sensitive data. In addition, you can also sign a non-disclosure agreement and service level agreement with the vendor to mitigate any risks with your company details.

8- Time Zone Difference

Another classic outsourcing challenge and solution that we will discuss is the time zone difference. Hiring offshore services leads to this problem. Though some vendors have begun to provide 24*7 services, many still need to follow this practice. A mismatch in available timings can hamper communication and coordination. Thus, having a suitable schedule where both parties can be present is an essential parameter through which you should select your outsourcing partner.


Regular meetings can mitigate the outsourcing challenge of time zone differences. Setting a time suitable for both the business owner and service provider is a simple way to resolve this issue. Moreover, you can also select a vendor who offers 24*7 services to eliminate the time zone difference problem.

9- Choosing an appropriate outsourcing approach

The right strategy for working with an outsourcing partner is equally important as selecting one. A good approach can keep you and your vendor on the same page, landing you toward the desired outcome. The approach also plays an essential role in determining the overall efficiency of your project.


There are various factors that you must consider while framing your outsourcing model. These include your goals, the scope of the project, your needs, project duration, budget, etc. You can choose from the three famous outsourcing models: dedicated development teams, time and material models, and fixed-price contracts.

10- Managing legal terms

Hiring offshore outsourcing services means having different payment and legal standards. You may have to agree with the terms and conditions that are not legally binding in your country simply because they are crucial for your vendor. Signing these terms without carefully reading them can cause confusion and is a common outsourcing challenge. A few misunderstandings of legal terms can cause serious repercussions between the service provider and you.


Reading and discussing all the legal terms before signing the deal is essential to mitigate any legal threat from the vendor. If you’re not comfortable with a clause, you should regulate it with your vendor. All the necessary points, such as the process of working, compensation, ownership details, and other responsibilities, must be clearly mentioned and agreed upon by both parties for a healthy business.


If you are new to outsourcing, going through these potential outsourcing challenges and solutions can help you to start efficiently. Of course, errors may not entirely escape the first time, but following these tips will help you minimize the risks of doing business with a third party. Thus, follow these recommendations and remember to research the vendor you may partner with properly. Also, if you have any outsourcing experience or tips to share, the comments section is open!

By Khatija Bano

A writer by heart and profession, Khatija has been writing with years of experience in content & copies. She keeps her focus on delivering value to the readers with verified information. When not nerding out over writing or reading, you can find her binge-watching thrillers.

Write Comment
Deprecated: File Theme without comments.php is deprecated since version 3.0.0 with no alternative available. Please include a comments.php template in your theme. in /home/firmsexplorer/public_html/wp-includes/functions.php on line 5613

Leave a Reply

Your email address will not be published. Required fields are marked *