What Should You Do Before You Offshore?
Every time you come across the business terms outsourcing and offshoring, you will notice that the statement “reduced costs” will always be in tandem with them. You will rarely see an outsourcing and offshoring company ad that does not touch on the subject because it is the most enticing part of the offer.
There is truth to the statement, or else the entire offshoring industry will receive accusations of false advertising. Low-cost economies in countries like the Philippines will allow your company to enjoy up to 70% labor cost savings.
Businesses of any size and field can benefit from outsourcing professional services or offshoring facilities and operations. It all sounds too good to be true, right? However, one drawback of the method is that the entire process can be painstakingly slow. You will be transferring operations to another country after all.
If you decide to offshore for your business, you will have to create a plan that makes execution efficient. Here are a few suggestions for better offshore practice, research, and planning.
Determine the Work You Have to Offshore
Offshoring solutions can provide you with cost-efficient alternatives for most of your business operations, allowing you to focus more on the core business matters. However, it does not mean you will be handing over all of the tasks to remote overseas teams. You will keep the important stuff at home while sorting out most of the repetitive and costly tasks to top offshore companies around the world. Here is a guide of what tasks companies offshore in one of the world’s biggest outsourcing havens, the Philippines:
While there are plenty of tasks you can offshore, you must determine your objectives and strategy. Planning allows you to figure out your ideal offshore departments and the best countries to incorporate a business.
Create Local Leadership to Manage Offshore Teams
Offshore company solutions provide your business with a lot of flexibility, both in operations and funding. However, it does not mean that the transition will be smooth once you transfer the tasks to remote teams that work in offshore companies. You will still have to incorporate and onboard overseas workers to your business system, even if they already have the required expertise and knowledge in the devices they will utilize and the workload they will shoulder.
Every small business owner wants their operations to run a certain way, even for their offshore divisions. However, you might not have the time to manage the remote workers. It will be critical to hire project managers to ensure offshore operations are following the company procedures. Cultural compatibility, language barriers, and different time zones could get in the way of productive and efficient performance for your offshore team, making it necessary to hire managers.
They will be monitoring the performance of the offshore teams, ensuring that they are keeping themselves in line with company protocols and operations. You can choose to hire locally or have the offshore company find a talented professional with experience in team management within your area.
Identify Potential Roadblocks in Offshoring
There are many benefits of incorporating offshore services to scale up your business, and there is no question about it. However, it is natural for the strategy to come with risks and challenges, including how much time you might waste when you set up an offshore division for your specific business tasks.
What’s the use of saving costs when you might end up suffering from lots of delays due to miscommunication, financial issues, employee onboarding, and other external factors? The primary purpose of offshoring is to remain competitive in the global marketplace, especially when industry rivals are already utilizing the service.
Offshore companies offer business services, but it does not mean you can’t make an effort to make the partnership work more efficiently. To ensure that the entire process is effective, small business owners must rely on proper research and planning to identify the top offshore companies they can partner with for their goals.
Knowing what you want and what you expect will allow you to gauge if the offshore service provider will accomplish your business plans right from the initial discussions.
Start Small with Offshoring Processes
If you’ve done your research well, you might find a few articles or studies that tell you that offshoring is a dangerous path for your business. Examples of local job displacements and failed efforts to reduce costs could dissuade you from proceeding with the plan. Even bad publicity due to the use of illegal labor in offshoring countries could lead to reduced sales.
All of those cons might lead you to believe that offshoring is not the right move for your business. However, it does not mean that the benefits are non-existent.
If you want to test the waters, you can start small when offshoring. Hiring a few remote teams, figuring out the relationship, and measuring the performance and output can help convince you to commit to a long-term contract.
Small steps will help you figure out if your initiative will maintain a competitive edge. If you failed to get promising results from the services, you have the option to terminate your partnership with the offshore company. Safe offshoring is achievable as long as you know what to expect from the strategy.
Preparation is critical for every step you have to take for your company, and getting involved in offshoring is no exception. To get the best out of reducing costs, you have to make an effort to ensure that you are using offshore corporate services efficiently. The practices mentioned above will allow you to achieve that situation.