// Gyte Gedvilaite, is co-owner of Imaginess I/S, a danish company that assists other businesses in outsourcing their graphical activities while maintaining the comfort of communication and in-house quality. For more information, please visit http://www.imaginess.dk //

Crisis seems to be left the only topic in the business world. Saving expansion to the better times, laying of employees and sending “We do not look for an employee anymore” note to all applicants to the job opening become new trends. How to save costs while keeping sales up – that is the question.

Outsourcing is, of course, simple and well known solution to it and many Danish companies (according to Eurostat, highest percentage in whole EU) use it. Yet there is also a downside for it. Recent survey by Deloitte called “Why settle for less” shows that 39 per cent have terminated the outsourcing contract and came back to in-house operations. Extremely high number that seems to be caused simply by mismatched expectations.

In many cases a company, that decides to outsource any activity, chooses among usual outsourcing countries (mostly in Asia) and the only interest they have is price per hour. Unfortunately, overlooking such factors as quality understanding, efficiency, ability to work without control, meeting deadlines and amount of communication needed in order to finish the project often ends in costing more than expected. Sometimes so much more, that coming home and paying twenty times higher salary is cheaper.

That does not mean outsourcing is a no-go. Settling for less is. There are few more things to be noted:

  • Do not go for usual “outsourcing countries”. They may be the cheapest, but they also know it. When price per hour is low, there is always a way to put on some extra hours. Try to negotiated price per whole project or get estimates of hours that will be used.
  • It is not necessary just IT and manufacturing. Even though these two areas are among most popular ones in Denmark, it does not mean other activities have to be done at home. Many services are easy to outsource, for example creation and printing of marketing material, translations or data analysis. Our customers are always surprised, when we tell that it is cheaper to not only design and print, but also ship catalogues from Lithuania to Denmark ( as opposed to ship them from somewhere in Denmark to other part of it). Shipping is usually big additional costs when outsourcing to a country far away, but not in this case.
  • Culture is important. From our customers and partners we have heard many stories about “different understanding”. Quality means one thing in Denmark, but not the same in Turkey, India or China. Generally, there are some studies that group countries in some clusters, where things are understood similarly. For example, Baltic region in Europe is considered one big cluster and we always advice our customers from Denmark to choose another country from this region. Salary can be 6-8 times lower, but efficiency, understanding of quality and need for specifications will be the same as at home.
  • Language seems to be one of the key problems. Most of Danes speak English very well, but not being able to speak danish and having to translate specifications or tasks descriptions was named as number one difficulty by our customers. Search for a partner in similar culture and who can speak your language and outsourcing will be piece of cake.
  • Start outsourcing smaller, routine tasks that are relatively not risky. Once the relationship is build and partner seems trustworthy, you can gradually go to more difficult jobs. Best out of this strategy is that it is totally a win-win situation: you minimize your risk and the company you outsource to has time to learn and adapt to you. Our most satisfied customers started exactly the same way: first outsourcing the simpliest tasks, then giving more difficult ones and finally using consultancy and advice.
  • Pay attention to flexibility. It may give you way more value if the company you will outsource to can offer something else, not just low cost. Maybe they deliver so fast, that it is worth paying extra. Maybe they can be the ones that check let’s say spelling mistakes or quality of material. It surely requires trust, but can also take of lots of weight off your shoulders.

Finally, remember that outsourcing is not always an answer. Consider “what” and “how” before seriously making the decision. But if you do your homework and plan actions carefully, very high chance that the day you decided outsourcing will always be marked by a happy face on your calender.