Why Client ‘Due Diligence’ is often Misplaced When Outsourcing

Shaunvir Mahil September 19, 2018

In my previous blog post , I looked at how, even when clients are making an effort to be diligent when outsourcing, in fact, they are unable to do so. Attempts by clients to be diligent when outsourcing are often misplaced as the several examples shared by me in the previous post revealed. The real life examples I had shared were quite baffling and preposterous.

One of the examples shared in my last post, was that of a client who had shortlisted a software developer to hire via our firm. However, when she was no longer available, he felt that we were trying to ‘trick’ him. He believed that we had initially brought forth our best software developers to ‘entice him’ to use our service, and after we had managed to evoke his interest, we were now pulling the rug out from under his feet by pushing other developers (who he thought would be less qualified) onto him.

If the client doubted our integrity, he could have easily assessed this by reviewing the technical proficiency and capability of our other developers (infact, providing multiple options is a good indication of a highly reputed and capable organization). When the client informed us of his apprehensions, we found this highly bemusing. There was, of course, no sinister plot to ‘trick’ the client, (the other developers we had submitted turned out to be technically stronger!) whatsoever.

We had submitted a large batch of resumes to the client. It just so happened that one of the developers resigned, and coincidentally, the client had liked her the most (this particular individual had already been working with us for 5 years and it’s understandable that she wanted a change in her professional career).

However, this unfortunate incident was enough to trigger a deluge of thoughts in the client’s mind. It prompted him to question the integrity of our company and doubt whether outsourcing could even work. One tiny hiccup in the process and the client concocted quite the conspiracy theory!

As already mentioned, we had not done anything untoward, unethical or insincere. An employee’s resignation does not mean an outsourcing company is incompetent or incapable. Employees are allowed to resign, and it’s their basic human right which is protected by legislation everywhere in the world! No company in the world, irrespective of its success, is immune to resignations, not even the likes of Apple or Facebook. Employee resignations are merely a part and parcel of conducting business.

Hence, we must surely ask the questions ‘why’? Why is a hiccup (a minor glitch which is not the fault of the vendor but merely a bi-product of doing business), enough to have clients running for the hills, going into panic mode and doubting the integrity of the organization? Herein, we are talking about an organization which was established more than 10 years ago, has multiple offices around the world, employs over 800 staff members and has worked with over 2,000 companies globally. Why does it take just one employee’s resignation for a client to put an organization with such a strong track record under the microscope? Why is an incident which locally would simply be regarded as unfortunate, gets classified as something so untoward when it’s offshore?

I had even joked with my team that (god forbid), if our office had to close due to some natural disaster, and if it also happened to be the first day a new client was availing our service, we would probably receive an email stating something along the lines of, “oh dear, this isn’t a good start and not a good first impression, is it.”

I believe the reason is fear. Fear is an incredibly powerful emotion, one that can cause even the most composed of us to behave irrationally and temperamentally. It also makes us over-exaggerate and misalign cause and effect. It also makes us unnecessarily worry and imagine doomsday scenarios, even when there is no evidence to support such an outcome.

Several clients, when outsourcing, draw a link between teething problems, unfortunate hiccups (part and parcel of business life and to which any organization, anywhere in the world, is susceptible to) and the credibility of an organization. If something goes wrong when you are in dialogue with an outsourcing vendor, it does not automatically mean that the firm is incompetent. Whilst, if you are speaking to a rogue vendor, it can mean you will face difficulties. At the same time, a ‘bump in the road’, does not necessarily mean a vendor is rogue.

It is great that clients are investing thought into the process of outsourcing and are looking for signs and indicators of whether a vendor is professional and competent. But such efforts should not be misplaced or unrealistic. Do not make the mistake of equating due diligence when outsourcing for a one hundred percent seamless process (whilst the process often is seamless, however minor inconveniences do not mean that there is necessarily something wrong). If you hold a vendor to this unrealistic benchmark, you will simply be outsourcing based on luck over actual deliverable metrics.

Recently, a client of ours was experiencing difficulties while making a wire transfer payment for our service. He requested to make the payment by PayPal, but due to certain Reserve Bank of India (India’s central banking institution) policies, we do not take any payments via PayPal. This resulted in the client getting rather impatient and he eventually decided not to avail our service.

Perhaps the client thought, ‘they are no good, they can’t even accept a simple PayPal payment, how poor their setup must be?’ In reality, we don’t take PayPal payments because we are meticulous when it comes to following policies. If another vendor happens to take payment by PayPal, i.e. on this occasion the process of getting started may be easier with another vendor over us, and the client might take this as an indication of them being a more reputed organization than ours. This is however, an erroneous thought process.

Making international payments can sometimes be a frustrating and long-winded process. Different banks, states, countries and even continents have different protocols. In essence, it is easy for something to go wrong when making international wire transfers. Hence, if you take such instances as your yardsticks of professionalism, you are going to stop focusing on the parameters that are actually important, i.e. factors such as ability of resources.

The client, who had struggled to make the payment with us, had actually already taken a trial run of our service and was happy with the quality of our work (he wanted to make payment and engage with us on a long term basis – a sign of our quality and credibility). If he ends up working with another outsourcing company, one that has a more seamless payment process, but delivers a lower quality of work, was the client being diligent?

Why do we approach outsourcing with such a huge degree of scepticism and suspicion? Why are we so afraid? Answering this question is important for it is only once we understand the root causes of our fears, that we can cut them down to size and outsource more objectively. This is the topic of my next blog post Outsourcing has a PR Problem; why our apprehensions about outsourcing are vastly exaggerated.

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