Biggest Outsourcing Mistakes to Avoid
Everybody likes to learn about potential mistakes before making them.
BNET and author Jeff Haden took a look at seven of the biggest outsourcing mistakes to avoid yesterday. In honor of that, we’ll paraphrase his seven and provide a few of our own.
1.) Outsourcing functions that directly touch the customer
Put it this way- would you rather call an actual person or sit through Dell’s automated customer support? Don’t take away something that adds to a customer’s experience.
2.) Overestimating cost savings
If anything, underestimate them. BNET says that receiving anything better than 70 percent of your estimated savings is a win.
3.) Failing to provide guidance
Anything that goes without saying must be said, according to Haden, so make sure you’ve clearly defined your mission and guidelines.
4.) Jumping in too quickly
You read all the time about how companies outsource entire departments. Resist the temptation, and outsource as needed slowly.
5.) Failing to put measurements in place
Make sure you know how you’ll measure the effects of outsourcing outside of just looking at the savings. How will outsourcing the customer service department affect your company’s core business values?
6.) Going all in
Have measures in place should your outsourcing partner go out of business.
7.) Ignoring an exit strategy
As BNET put it, “every agreement should include criteria for disengagement.” Make sure you can get out of an outsourcing agreement quickly if your business is not getting what you intended.
And, a few of our own:
8.) Don't avoid research
Nobody likes to get online and sit for hours on end researching the pros and cons of outsourcing IT in the air freight industry. Suck it up, and do the work though. You’ll end up saving more money if you know what exactly you’re preparing for.
9.) Don't contact a single agency
You wouldn’t accept the first offer you received for any part of your business, would you? Go out and meet with several companies, understand what they do and pick the one that fits your company best.
10.) Don’t go cheap
Unless an outsourcing company fits exactly what you’re looking for, going for the cheapest outsourcing provider may hurt your business more than it can help in savings. Find the best fits, and then look at price.
Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.