Thinking about offshore for your practice? Perhaps you have already made the move? When done right, establishing capability offshore can be a game changer for your business or practice. Here are my top tips of how to ready your business or practice for the move.
1. Define and document your objectives
Whatever your reason for moving offshore, it’s important to agree on objectives and to lay out your expected outcomes. Include measures of success and a timeline that you can measure against. For example, if the plan is to move all BAS preparation work to your offshore team, set a target date for completion. Don’t forget to include other measures such as expected savings.
Revisit your agreed objectives regularly and hold yourself or your service provider accountable if timelines shift. When dates slip, or performance targets are not met, it can start to get expensive. If you are transitioning the tasks and functions yourself, allow for those busy periods and be realistic about what you can achieve.
2. Have a plan
It may be stating the obvious but outlining and documenting your plan of attack will allow you to focus on the immediate tasks, rather than your next move. It doesn’t need to be lengthy, a simple spreadsheet will suffice. Who will train your team? What processes will move, and when? How will you manage change? These and more need to be answered and planned for ahead of your move. If you have the budget or the resources, you should seriously consider assigning a project manager.
3. Budget, budget, budget
Although your move offshore will bring savings, getting started will require an investment in both time and money upfront. Understanding and budgeting for the full cost of offshoring your workflows or functions will mean no nasty surprises six months down the track. Ask your service provider for a breakdown of costs. Consider travel costs for your Australian and Filipino team. Who will manage and support the team from Australia, and what is their time worth? Generally speaking, when you engage an outsource service provider the monthly charge should be inclusive of all costs (other than travel).
Be warned: Some offshore service providers advertise hourly rates based on the fully loaded cost (FLC) of the resource. Be sure to ask about service fees and seat overhead charges. Then you may need to recalculate the hourly rate.
4. Safe guard your data
There are a number of ways that you can protect your customer information and data offshore. There are lots of different software providers that allow you to store and access your cloud-based systems through one protected, web-based application. This will allow you to control access across devices, levels and locations. It is common in the outsource services space for service providers to lock down production areas, banning mobile devices and bags, removing pen and paper, disabling USB ports and disc drives. Access to external email and non-work-related sites is often removed and, in some cases, copy and paste is disabled. Smaller service providers generally don’t go to this extreme, but some do. Ask your service provider what additional steps they take to stop your data from leaving their site.
5. Set targets and measure performance
Similar to setting your objectives, it’s important to set milestones and realistic performance goals for your offshore team. Be sure to factor speed to competency (3-6 months depending on the function) and lower individual/team targets during this transition period. If moving a function offshore will make the same function redundant onshore, be sure to budget for overlap in costs while your offshore team gets up to speed. Don’t do what BigPond did and shut down your Aussie operations as you launch your offshore team. If you were a BigPond customer in 2009 you will know what this means.
6. Involve your team
Get the buy-in from your Australian team by involving them in the planning and transitioning of functions to the Philippines. This will smooth the path and minimise disruption to both your onshore and offshore operations. Failure to involve the team can lead to a negative ‘them and us’ culture. It is seriously disruptive when your onshore team is picking holes in your offshore team. Unfortunately, this happens a lot.
7. Consider outsourcing
If you have not transitioned a function or established a team offshore before, then you should seriously consider a fully managed outsourcing option. Often misrepresented as handing over control of your business, it couldn’t be further from the truth. When you outsource your function or workflow, you are simply engaging an expert who has done this hundreds of times before. Think about it like this; if you owned a Lamborghini would you service it yourself? The answer is probably no. Your business is your most valuable asset, if you don’t know what you are doing, engage a professional that does.
Outsourcing options are generally more expensive, but costs are fixed and all in. The cost should also be built around specific service levels or predefined and measurable outcomes. Then you should weigh up this cost vs the cost of your time, and the cost of getting it wrong.
8. Choose the right service provider
There are thousands of offshore and outsourcing service providers for you to choose from. Ask for recommendations from others in your network and get advice from people that have already made the move. Ask your service provider for references. Ask about different service model options and beware of providers that only offer one. There is “no one size fits all” solution for business, so take the time to find a provider that you can work with. After all, you’re relying on your provider to look after your investment offshore when you’re not there.
About the author
Andrew Mault has worked in operational management for the last 25 years, in outsourcing and offshoring for the last 12 years, and has been based in the Philippines for the last 5 years. Andrew has provided outsourced services for some of the largest brands in the world and has successfully transitioned 1000’s of task and functions offshore. Andrew’s business, hammerjack is helping small and midsize businesses to get more out of offshore. You can hear more about Andrews experience in this interview with the Outsourced Accelerator Andrew Mault - Inception of hammerjack
To help you accelerate your business advisory journey by leveraging offshore and outsourcing, contact us.