What dooms outsourced relationships? How do you do it better?

What dooms outsourced relationships? How do you do it better?

By now, most people realize the inherent value of outsourcing aspects of your business:

  • You can give it to people with real expertise in that area.
  • It’s often cheaper and more flexible than hiring for those roles.
  • (If you hire someone and it doesn’t work out, that can be more than a year of no productivity around that business need.)
  • Outsourced partners have additional context and contacts that your internal resources might not have on projects, business development, and sales.

Those all seem like great reasons, and the process often works well — the outsourcing market globally is around $90 billion U.S., so clearly these relationships are taking hold and the outsourced partners are being paid and getting renewed retainers.

But when outsourcing fails — which also happens a good deal, true — why is that? 

Misunderstanding on price and value and delivery

This would likely be No. 1. The company or individual paying for the outsourcing will want to know how much it costs, and what they are getting within that cost window. (By “cost window” we mean paying for a project, paying for a month of work, paying for a year, etc.) If there is a misunderstanding on the value delivered for the cost, that’s usually the biggest factor breaking apart outsourcing relationships. You see this a lot when a company believes their outsourced partner will be strategic, but the outsourced partner is more execution-driven — for example, you want them generating leads, and they keep showing you a bunch of slide decks about how they’ll generate leads, but don’t actually go do it. Now you, as the payer, feels like the value isn’t there, and ending the relationship is a logical next step.

Poor communication, or outsourced team doesn’t feel connected to your team

Communication breaks down a lot of things in business. We don’t need to belabor that point. The best outsourced teams are “baked in” to the main team and talk with them often, making sure their actions are supporting and advancing what the main team is working on. When it feels like two silos, usually the relationship won’t last. 

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Role clarity

“Who’s on first?” (baseball analogy) or “Who’s playing center mid-field?” (soccer analogy). When role clarity isn’t there, the HQ team and the outsourced team can step on each other’s toes, or work on projects that are redundant. This causes the value of the relationship to decline, and when value declines but cost stays the same, chances are the contract won’t be renewed.


Most organizations have very set-in-their-ways and specific processes they follow to get work done. If the outsourced partner isn’t read in on those processes and starts using their own, there can be friction that dooms the relationship. Also: same goes for tech. A lot of companies want their partners using their tech stack because they’re paying for that tech stack, so if an outsourced partner goes and uses different tech, it can also create friction.

Some other aspects of outsourcing to consider

From our past works:

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