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Myths or Facts?: Debunking the Top 10 Outsourcing Myths

10 outsourcing myths debunked.

Having an in-house team of employees handling business activities has always been the traditional way of managing a company. Ultimately, business owners want full control over their business operations and active involvement in the decision-making processes and revenue-generating tasks. However, with modern technology and artificial intelligence, more and more companies are using third-party service providers to provide their customers with quality services. Most of the time, BPO companies carry critical business functions and services that require advanced skills and expert oversight. 

Outsourcing business processes is a practice that can guarantee cost reduction, better focus on core functions, access to skills and technology, and improved customer experiences. When done right, it can help your business succeed.

This article aims to debunk the common outsourcing myths that may be discouraging business owners, like yourself, from seeking the assistance of reliable service providers for their office operations. Continue reading to learn more.

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10 Common Myths That Might Affect Your Outsourcing Experience + Facts to Debunk Them

Myth #1: You will lose control of your business.

Loss of control is perhaps one of the most common misconceptions that startup business owners have about outsourcing. The thought of hiring an external provider to carry out important business tasks outside the company premises worries business owners because they do not know what to expect.

This is a usual scenario in companies that are into offshore outsourcing. Since their business and everyday tasks are set up overseas, there is a belief that 24/7 communication and coordination will be difficult or worse, impossible, because the business owner will not be there.

Fact: You can stay involved in every process and maintain control over your business. 

Truth is, you can always keep yourself involved even in the contractual tasks that you outsource. The key factors that affect business control are priority and significance. Indeed, there are day-to-day tasks that need minimal supervision, especially when your service provider has selected and hired industry professionals to handle them.

For example, if you are into a retail business, the financial activities and cash flow in your organization holds a higher level of importance and priority. Thus, even with the services of financial experts, you can set your own guidelines and standards in performing accounting tasks and other complex work, such as web development and IT.

To ensure a smooth outsourcing experience, you may consider doing these steps:

  • Set your expectations and provide a clear list of your goals. 
  • Maintain a reliable contact channel that your outsourcing partner can access 24/7 for problems and questions.
  • Collaborate with your chosen outsourcing firm in problem-solving strategies and the best practices to avoid product and service-related problems in the future. 
  • Conduct regular meetings to check updates in data management and processing to guarantee data privacy and prevent security breaches.
  • Prepare training guidelines that your remote team can follow to ensure that all business practices are aligned with state policies and laws. 

Myth #2: Outsourcing increases the risk of poor product and service quality.

In connection with myth #1, another thing that makes business owners question the necessity and benefits of outsourcing is the quality of products and services. There is a common misconception that without proper and frequent monitoring by business owners, the quality of products and services will be highly compromised. This situation may result in low customer satisfaction ratings, negative feedback, and potential profit losses.

Fact: Your business functions will be handled by industry professionals and experts, so you can guarantee quality outputs.

Outsourcing certain business functions and tasks may require specific levels of expertise and competence and this is what outsourcing agencies do best. BPO companies are known for conducting intensive training programs for new employees who wish to work in customer service, technical support, sales, and marketing.

Outsourcing providers train agents in customer service best practices, language, and call center etiquette to make sure the right people are doing the right things. By outsourcing your business operations, you can gain access to staff with different skill sets and specialized skills needed to perform technical tasks. To make sure that your remote team is performing well, get yourself involved in the recruitment and selection process of team members. You can also set KPIs and metrics as bases of their performance for their evaluation and assessment. 

Myth #3: Outsourcing and offshoring are the same thing. 

Since both business practices require the help of a BPO company, a third-party service provider, many business owners believe that there’s no difference between the two. 

Fact: They are two different things, but both can benefit your business. 

Unlike what people think, offshoring and outsourcing are not the same thing. They are actually two different things, not only in terms of work scope but also in many ways. Outsourcing is usually described as an umbrella term that carries offshoring and other activities done outside the business premises and territory. However, there are things that business owners should consider if they choose to outsource or offshore their business operations. 

To know the differences, take note of these:

The company taps the help of another entity to perform specific business tasks.OutsourcingOffshoring
Can be done both locally and internationally.  Involves transferring business activities to an external provider with different levels and types of specializations. The main goal is for the in-house team to focus on the core activities and business functions.   Can only be carried out internationally. Involves moving entire business processes and operations to another country (e.g. warehouse and logistics, manufacturing). The primary objective is to reduce costs through reliable access to resources (manpower and technology). The entity is a partner company or subsidiary.

To make the most out of outsourcing and offshoring, you can adopt the hybrid model called offshore outsourcing. Offshore outsourcing is done by hiring a third-party service provider from another country to perform services for the company.

Myth #4: Outsourcing business operations is for cost reduction purposes only. 

When company owners outsource their business functions, cost advantage comes as one of the top benefits that outsourcing brings to organizations. This is because service providers shoulder the high labor costs and other work-related expenses to provide quality and efficient services to their customers.

Fact: Your outsourcing team can bring lots of benefits apart from cost savings.

The outsourcing industry is filled with talented professionals with vast knowledge and experience in various fields. Outsourcing accounting functions means having experienced financial experts handle critical tasks. This allows your in-house team to focus on making money. To debunk this fourth myth about outsourcing, here are some of the benefits that your business can get from outsourcing (aside from cost savings):

  • Increased efficiency
  • Technological advantage
  • Focus on your in-house staff’s core competency.
  • Access to global skills and talent
  • Easy marketing
  • Scalability
  • Process optimization and personalization

Myth #5: Differences in language and culture will be a big problem. 

Cultural diversity is a common case with companies that choose to outsource their business operations. Access to a global pool of talent also exposes the company to the risks brought by miscommunication due to language barriers and cultural differences. Many business owners are hesitant to invest in an external service provider for their business needs.

Fact: Cultural diversity can be an advantage to your business. 

Cultural diversity is an exciting aspect that could positively affect business operations in the long run. Successful outsourcing involves the proper orientation of staff regarding regional and organizational culture differences. Sharing your norms and values and being familiar with the language of different people is one of the best ways to avoid miscommunication.

Basic cultural awareness training and seminars on language differences should be implemented. Businesses that adopt cultural awareness programs tend to have a higher competitive advantage because they build trust among different cultures and organizations. It is also good practice to introduce your company’s core values to your remote team. This will help them understand your company’s service level. You should also set standards in the level of English fluency that your remote team should have in order to avoid mistranslations and miscommunication.

Dedicated teams with fluent English speakers tend to give better customer experiences to a wider customer base, so make sure that your customer service agents have the ability to communicate well with your international customers.

Myth #6: Outsourcing is only a short-term business solution.

Every company experiences peak seasons when the demand for products and services is high, so some business owners consider outsourcing their day-to-day back-office tasks to minimize delays that might cause complaints and bad customer feedback. 

This means that they think that outsourcing only works for a short-term business solution, but it is not practical when done for a long time.

Fact: You can consider outsourcing as a long-term business solution with long-term benefits.

Acquiring and updating company resources such as manpower, equipment, and technology can be costly. Companies can save time and money by partnering with a reliable outsourcing company for faster task completion using top technology. For offshoring, you can work with companies based in Bangladesh, India, and the Philippines, where the cost of living and wages are low. This practice is considered more practical than hiring full-time employees and an in-house team that will require bigger office space and higher operational costs.

With this, you can outsource your important business functions permanently or until you have more money to pay for in-house teams and get a new working space.

Myth #7: Only established businesses can outsource.

Like many business decisions, outsourcing involves costs that can be difficult for small business owners who are still trying to make a living. This gives the impression that only large and established companies with proven expertise and a bigger workforce can hire a third-party service provider to do critical work for them so that they can focus on driving more leads and profit.

Fact: A startup business can also outsource. 

Outsourcing can help a startup business succeed in the industry. With the help of a reputable BPO company as a service provider, startup businesses still have a lot to learn, and these startups can have close and affordable access to an excellent pool of professionals in marketing, IT, customer support, and financial management.

This way, business owners and managers can control the company’s strengths and focus on strategies that can prevent losses and errors, while creating more leads to increase income. Some BPO companies specializing in human resources can also offer a wide range of services that can reduce employee turnover and other labor-related issues.

Myth #8: Outsourcing companies tolerate unethical labor practices and working conditions.

BPO employees and outsourced teams work as major players in various industries. In fact, during the COVID-19 surge, they were considered front liners along with health and medical professionals who work under challenging shifts and schedules. Even without the COVID scare, BPO jobs are considered physically and mentally demanding.

Companies offer good salaries and benefits to their employees. However, high attrition rates in BPO companies make business owners hesitant to outsource their business functions. This hesitation is not only due to a lack of outsourcing knowledge and experience, but also because of concerns about employee welfare.

Fact: Many BPO companies invest in creating a healthy working environment for their workers. 

Looking at the clearer picture, the BPO industry is quickly transitioning into a fun, safer, and healthier workplace for employees. BPO companies are prioritizing employee well-being by implementing fair policies that protect their physical and mental health. They are also providing benefits and compensation to promote a healthy work-life balance.

Myth #9: Outsourcing exposes businesses to privacy and security issues.

We live in this age of data protection, and personal data security must be prioritizedWhen outsourcing projects, you must carefully consider two things when choosing the right outsourcing partner for your business: data leakage or breach of business information.

Fact: BPO companies have comprehensive security measures and privacy policies to protect the firm and their clients. 

There are steps you can take to mitigate privacy and security risks. Firstly, make sure to do your due diligence when selecting an outsourcing partner. Research their security practices and policies and look for any red flags. Once you’ve chosen a partner, put together a comprehensive security agreement that outlines each party’s responsibilities in protecting your data.

It’s also important to have regular check-ins with your outsourcing partner to ensure that they are meeting your security expectations. If at any point you have concerns, don’t hesitate to raise them with your vendor. By taking these precautions, you can help protect your data while still enjoying the benefits of outsourcing.

Myth #10: Outsourcing customer service can lead to poor customer satisfaction ratings.

Customer service is one of the most crucial aspects that businesses should take care of. To ensure quality customer service, many business owners hire in-house agents and representatives to respond to customer queries and resolve product and service-related issues. Most outsourcing providers use technology and automated responses in calls and chat messages to give prompt services to multiple customers at a time.

While some questions can be answered by canned responses, there are issues that need to be escalated for higher departments to resolve. Failure to resolve complaints and provide effective follow-ups often causes clients to question the quality of a company’s customer service. 

Fact: Outsourcing can improve customer service quality.

Contrary to the myth above, outsourcing can actually improve customer service quality. In addition to well-trained and experienced call center agents, BPO companies have access to CRM software and databases. This allows them to process tickets and technical support instead of manually answering complaints one by one. To encourage self-service customer support, more and more companies are setting up online help desks and knowledge bases that customers can easily access.

Why do companies outsource?

Most companies outsource business functions in conditions when their in-house teams can no longer keep up with the demands of customers. Some businesses also rely on the help of outsourcing service providers in providing the latest technology and equipment that will help them improve their customer service operations and increase the number of customers they serve.

What are the most common business functions that companies outsource?

Many companies outsource their day-to-day back-office tasks and administrative duties, which include accounting tasks, IT and maintenance, payroll services, and bookkeeping. For retail and e-commerce businesses, outsourcing customer service tasks is also a good way to ensure 24/7 services for clients worldwide.

Read more: Jobs That Are Outsourced by Companies: Know the Top 20 Business Functions that Outsourcing Companies Can Perform For Your Team

Frequently Asked Questions

How big is the outsourcing industry these days?

Outsourcing companies are experiencing immense success and growth, with experts predicting the BPO market value to hit US $620 billion by 2032. Outsourcing work and business functions is quickly becoming an essential for business owners who aim to be on the top of the game.

How many outsourcing companies are there in the United States?

The United States is keeping up with its reputation as a home to Silicon Valley, and the number of American companies focusing on outsourcing services. Currently, there are 277,120 BPO service businesses in the United States alone.

What are the most common business functions that companies outsource?

IT and accounting services top the list of the most common business functions that companies outsource. This is due to the limited availability of skills qualified to deliver quality technology and accounting services needed by companies. Some prized talents are employed in the best IT and accounting firms in the United States, but they would rather work for a higher salary or longer.

If you want to hire temporary employees to help your full-time employees focus on your business, here’s a short list of services your outsourced team can provide for your business:

  • Marketing functions (Digital marketing, social media marketing, content marketing)
  • Accounting and bookkeeping
  • Software development
  • App development
  • Human resources (recruitment and selection)

Enjoy the benefits of outsourcing with Digital Minds BPO.

Outsourcing myths debunked, it’s time for you to choose the best services that you want to outsource! Give your in-house team a chance to experience the value-added activities from a skilled and reliable remote team and focus on the core competencies of your business.

Digital Minds BPO offers a wide range of services that can help you grow your business and establish valuable relationships with more clients in the future and deliver the best customer experience. We specialize in telemarketing, sales, and accounting services. With an experienced team of professionals and the latest technology, we look forward to helping you become an industry leader in your field.

Contact us now and let’s make your goals happen. We are excited to build your dreams!


Contact us today to learn more about our business process outsourcing services.

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