Last Updated on 2024-10-11
Over the years, offshore outsourcing has been a great help for small to medium businesses. However, offshoringโs reputation has been tarnished by outsourcing horror stories that discourage the faint heart.
The lack of competitive people, such as information technology specialists, became aย dilemma for many small to medium businesses. To counter this challenge, the idea of offshore outsourcing came about.
The process is simple; you find an offshore development team working on your product. This way, you not only find a talent pool but also save on production costs. These benefits have made offshoring popular among businesses.
However, a lot of articles are circulating on the dangers of offshoring that discourage other businesses from engaging with this venture. Little do they know that these outsourcing horror stories are offshoring lessons that any business can learn from.
3 Examples of Outsourcing Horror Stories
Outsourcing sounds like a win-win, right? Buckle up because sometimes those dreams turn into full-blown code horror stories!
Here are three chilling stories of outsourcing gone wrong.
1. Data Leak
An organizationโs intellectual property is very important. When you offshore a production process, you need to share some confidential information to implement product production actions properly. In this stage, the offshore team and the company build trust.
However, not all outsourcing stories lead to happy endings. Once sensitive information about the company leaks, it can be akin to doomsday. This is why companies are mostly wary of disclosing information to sub-contractors, especially if they are shady.
A horrible outsourcing experienceย happened in Florida that led the state to panic:
Florida once hired Convergys Corp. to work on the stateโs People First payroll and human resources system. The state of Florida trusted Convergys to handle sensitive information.
Their files are very sensitive since they contain personal information about their employees. However, Convergys subcontracted GDXdata to do the indexing, which also improperly subcontracted an offshore development team in India. Boom! Everything became a mess.
The State of Florida announced to its employees that there was a possible information breach. Everyone was worried that their personal information was leaked, which might lead to possible cases of identity or credit fraud.
2. Communication Barrier
Communication is one of the most important factors for an offshoring venture to succeed. But how can communication be properly established when your team is halfway around the world with a gigantic time difference?
The communication barrier and the time difference were the recipes for disaster in Orasi Consulting.
Schmidt led an offshore team in India. The language barrier was, of course, expected; Schmidt recalled that there was a team member they could barely understand. But that was just the tip of the iceberg.
The real problem came when they started the transition. It turned out that their existing local configuration management tool, which worked remarkably, was terrible when used collaboratively with the development center.
The offshore team was not knowledgeable enough about the system, and the eleven-hour difference made it even more difficult. Just like a domino, everything went downhill. They were way behind the deadline, and customers were upset with the level of service they received.
It was a total nightmare for Orasi Consulting. The communication barrier caused problems, leading to extended production time. The overdue deadline for the software delayed the operations of Orasi Consulting and led to higher losses than gains.
3. Ghosting
What could be the worst possible experience in offshoring? You hear nothing from your offshore development team and see your website down! This scenario happened toย James Hill, the president of MarketingHelpNet,ย when they hired an offshore developer to work on their clientโs website.
When James Hill took an assignment from a major client, he hired an offshore development team to design the website. He was optimistic that he could save costs instead of having a local website designer do the job.
What he thought was a cost-saving venture turns out to be an absolute horror. The completed output he received was not as expected. The problems came when the developer started missing deadlines, followed by the design and functionality differing from what the company wanted.
Naturally, Hills became frustrated and refused to make the final payment. Next, he received a panicked call from the client, no email update from the service provider, no warning, and lastly, no website.
It was as if the websiteโand the developers who worked on itโwas a haunting ghost who visited them through the night. The output was suddenly gone, wasting their time and money.
Is Offshoring Safe?
Despite its popularity, many outsourcing horror stories have been circulating online. In their blindedย hurry to save costsย and take advantage of the benefits, theyย forgot about the risks that offshoring entails.
These offshore development stories are not to scare you away. Rather, you should take them as lessons to learn from. All you need to do isย get to know these risksย and devise a plan to counter them.
In addition, ComputerWeekly.com posted an article about bad outsourcing decisions making up around 63% of data breaches. However, offshoring is not solely to blame for these failures. Security risks are often taken for granted; forgetting that an information breach creates problems for the company.
Most companies with experience in security breaches may not have diligently planned information security. Information breaches have occurred due to this lack of data protection.
One way to prevent a security breach is to establish a reliable IT security team within the organization. This IT security team should take part in hiring offshore development teams’ planning and evaluation stages. Once the production is up and running, ensure the security measures are executed properly.
Do not let these bad experiences discourage your offshoring plan. Let these stories guide you to developing an offshoring process that will work perfectly for your business.
Be Afraid of Nothing with Full Scale’s Offshore Team
Despite these examples of outsourcing horror stories, offshoring is very effective for startups and other businesses. All you need to do is to find the right offshore service provider you can trust and rely on, just like Full Scale.
With our pool of highly skilled developers and reliable project managers, we will commit our time and effort to scale up your business.
Our company was founded by Matt Watson. Since 2009, Matt has been hiring offshore developers for his previous businesses, which he successfully exited. Along the way, he has established Full Scale to help small to medium businesses succeed.
Full Scale has developed a comprehensive process that will aid in avoiding the risks of offshore outsourcing. Throughย Guided Development, you can manage your offshore team even if they are halfway around the world.
- Full Scale takes non-disclosure agreements seriously to prevent a data breach. We also advise our clients to follow the same robust security practices.
- We ensure our experts fit your team’s culture and project requirements. And that they commit their time and knowledge solely to your project.
- We have available project managers to ensure you get constant updates on your work and help you manage your offshore team to deliver quality output.
You gain all these and so much more with Full Scale. You can avoid becoming an outsourcing horror story with a thorough business plan and a reliable offshore team. Get your software development offshoring right!
Schedule a Consultation Today!
Matt Watson is a serial tech entrepreneur who has started four companies and had a nine-figure exit. He was the founder and CTO of VinSolutions, the #1 CRM software used in today’s automotive industry. He has over twenty years of experience working as a tech CTO and building cutting-edge SaaS solutions.
As the CEO of Full Scale, he has helped over 100 tech companies build their software services and development teams. Full Scale specializes in helping tech companies grow by augmenting their in-house teams with software development talent from the Philippines.
Matt hosts Startup Hustle, a top podcast about entrepreneurship with over 6 million downloads. He has a wealth of knowledge about startups and business from his personal experience and from interviewing hundreds of other entrepreneurs.