Offshoring or “multi-shoring” of office-base roles has become a hot topic for good reason. Never before in the history of commerce has there been a way to massively increase profit, and at the same time substantially improve services.
Yet many businesses fail to hit their expectations, getting only minor benefits or none at all. Why? The answer always lies in the strategy they took with offshoring. In most cases those who get poor results have no strategy at all – they just try something they heard at a conference or somewhere. With no proper direction or guidance, they drift from mistake to mistake.
Bearing in mind that every five roles placed in the Philippines adds at least $200,000 per year to the bottom line, it pays big dividends to invest a bit of time and money to make sure you do it properly. Unfortunately, too many approaches suggest it is simple to excel offshore – pick a provider, put cheap bums on seats, and Voila! You’ve saved 90% of your costs.
That’s absolute nonsense, it’s a sales pitch – no one succeeds that way. It takes work and planning to adapt your business to properly leverage offshoring. A good strategy means less work.
A lot of businesses dabble fearfully at the edge of global-resourcing, not fully appreciating how their establishment will change and improve over a three to five year period if global-resourcing is correctly implemented. With no long-term vision, they think only as far as the first few roles.
Vision comes from experience, and savvy businesses engage external experience when they do not have it internally. With the benefit of experience, you can understand exactly what value your business can derive from offshoring and factor that intelligence into your broader planning.
Some of your competitors are already well into their initial five-year offshoring plan. Some of those are growing exponentially, some are moving into cash flow funded acquisitions – all because they constructed a solid strategy and executed it properly.
Others are still stumbling around, lurching from one problem to the next. It’s really just a choice.
Because I drone on a lot about the importance of strategy, I am frequently asked to explain what is involved in getting it right.
Naturally, your strategy report will address all the common causes of offshoring failure; with enough research these become apparent. Since every business is different, it should also examine your particular scope and situation; the way another business in your industry did things does not necessarily translate into the best plan for you.
Apparently similar businesses can be quite different in terms of motivators, company culture, management alignment and capacity, team size, current quantity of office locations, local cost and availability of talent, current cash flow and profit, and risk aversion. Any or all of these issues will impact the success of global-resourcing.
Next week I’ll share the complete list of topics covered in our Offshoring Strategic Plan. This will help you formulate a strategic plan to suit your particular enterprise.