What are the major outsourcing challenges?

This is a significant issue, training programs that help you understand how culture affects communications and your projects are available to help you.

Competition for the right skills in countries like India is very high, you need to determine whether the vendor has and can offer you the staff with right level of experience. Once you establish a team, you need to proactively manage staff retention.

Major offshore vendors have established good business practices, but if you are dealing with a small vendor you need to make sure that you are not taking risking with your IP.

Often companies overestimate savings and underestimate the effort and cost of establishing and managing the relationship. You need to invest the time up front to gain a realistic understanding of both, once done, it is important to communicate to all stake holders.

One of the biggest challenges especially in HR Transactional Outsourcing is not making sure that the current processes followed by customer is not reviewed to the depth before moving that processes to a service provider.

Successes of outsourcing apart from Technology, Domain Expertise, Stringent and Ethical practices of the service provider, it is the process clean-up before taking its ownership .. Otherwise the monkey is passed on to service provider! And this is the beginning of a disaster!

Customers want a flexible outsourcing partner who will introduce innovation into their processes, help them manage both costs and service and use relevant and emerging technologies. They also want someone who understands their specific requirements and their business. Unfortunately, outsourcing service providers tend to fall short in flexible infrastructure, understanding the client's business and innovation.