Outsourcing business processes can deliver huge savings, improved efficiencies and increased productivity, but only if it’s done right. Avoid these common offshoring pitfalls to ensure success of your outsourcing project.
The redeployment of back-office business functions to markets with cheaper labour and overheads has been commonplace for decades now. From tech support call centres to accounting and finance departments, there’s always a cost-saving option overseas. However, the world of offshoring can often feel like the wild west, with cowboys promising the earth and delivering little.
Many businesses that have been burned in the past will most likely turn their back on the practice, writing off outsourcing as too challenging, costly or time-consuming. Is this a mistake? Whilst there are plenty of legitimate concerns around the suitability of offshoring for different businesses, it tends to be the same common offshoring pitfalls that prevent companies from making a success out of it. We’ve rounded up seven of the most prevalent reasons that overseas outsourcing fails, with guidance on how to overcome these obstacles.
1. Total Disconnect Between Head Office and Offshore Team
A botched offshoring project can leave you with not just one unproductive, demotivated team but two or more as the disconnect between departments spreads both at home and away. If your goal is to hand over administrative activity to the cheapest provider you can find, then chances are there’s going to be minimal integration between your current and future teams, and this is a huge mistake.
It’s important to think of any new offshore team as an extension of your existing team, even if that existing team has reduced in size. You can’t just palm off work to an out-of-sight-out-of-mind office block on the subcontinent and expect a smooth transition. Just as you can’t switch your opening batsman for a spin bowler and expect the runs to start racking up.
Quite possibly the biggest mistake that organisations looking to outsource make is taking the easy option of an off-the-shelf offshoring solution. A ready-made roster of low budget workers promises to deliver on all your goals for a fraction of the costs you’re accruing back home, so who can blame the eager business owner or project manager for jumping at this golden chance?
The trouble is that there is no one-size-fits-all solution to offshoring. Plugging into an existing call centre or administrative team might get you up and running quickly but the long-term ramifications can be costly, both in terms of upsetting and losing customers and letting your quality of work suffer.
The answer to this problem lies in seeking a bespoke offshoring solution tailored to your business’ needs. It will cost more in the short term and take longer to get off the ground but the peace of mind in knowing that your new offshore team have been trained to your own exacting standards, to do the job the way you want it done, is priceless. The contract you agree with any business process outsourcing provider should be completely unique to your company so don’t settle for a generic service level agreement and get them to explain how offshoring works specific to your business.
2. Poor Management of Your New Offshore Team
Leadership isn’t easy. It’s why the most senior management professionals are so highly valued and often get headhunted by rival firms. Good leaders exist across the globe and you shouldn’t expect that just because you’re paying less for your new overseas department, you should expect a lower calibre of manager.
That’s not to say that your new team should be managed separately from your domestic workforce. After all, whether customer-facing or not, your new staff still represent your company and it’s your reputation at stake so you’ll want them all to be on the same wavelength. Supervision at an active middle management level with an employee local to your head office is essential; Someone who can establish a working relationship with the offshore team can act as a monitor and influence, preventing your new recruits from abandoning the working culture you’ve cultivated in favour of slipping into local cultural norms.
If the past 18 months have taught us anything it’s that distance should be no longer be a barrier to motivating and leading a team. Ultimately, there’s no excuse for poor management. That’s why at Integrated OS, we aim to achieve total synergy between onshore and offshore teams. By guiding the offshore team to conform to exacting compliance standards set back home, we can ensure there’s no challenges between teams and time zones.
3. Loss of Control
It’s easy to feel that by engaging a new workforce on foreign shores, you’re effectively leaving your operation to the mercy of whichever third party is involved in organising the whole process. This doesn’t have to be the case.
The team you employ offshore should be just as accountable to you as those you employ onshore, and that’s why transparency is so vital. There’s no reason you can’t retain control over hiring, firing, training, remuneration, and incentivisation. You’ve just got to work with an integrated offshoring provider who’ll tailor the right solution to match your goals.
The most successful outsourcing projects tend to utilise the expertise of a specialist offshoring provider to assist with the pre-selection of qualified candidates and provide advice on appropriate remuneration in that market. Beyond that, the head office should retain the right to make the important decisions and enjoy total control over all new resources.
4. Low Calibre of Candidates
We’ve all been stuck on a customer service call cursing the representative in a foreign call centre failing to understand our most basic requests. It’s enough to cloud your judgement and allow you to write off the many very capable workers from countries such as India, Malaysia and the Philippines. In truth, you get what you pay for and just because your credit card company cheaped out when recruiting their overseas customer service workforce, does not mean that’s the standard you should expect.
In most cases, candidates that Integrated OS put forward for it’s Partners are better qualified than their more expensive counterparts back home. We don’t just fit square pegs into round holes, we have a rigorous selection process before allowing the very best local talent onto our books. We learn about your company and the type of people you’re seeking before making appropriate recommendations. It’s about understanding exactly what and who you need to find the very best fit.
Of course, qualifications on paper aren’t always a substitute for commercial noise and sometimes you’ll want to focus on continuity of expertise on your project over selecting from the candidates with the highest qualifications. A lot of outsourcing projects fail when high calibre candidates quickly move on to greener pastures after wowing the onshore firm, the quality rapidly begins to drop as the level of initial scrutiny plummets.
This is a key differentiator between reputable offshoring providers and BPO agencies in it for a quick buck. You should try and meet as many staff as you can with the provider you’re working with, including those you’re not introduced to. It’s easy to roll out the red carpet when a client’s in town but don’t settle and pay attention to the contractor’s staff turnover rates so you get a better picture.
5. Messy & Disjointed Transition
In traditional BPO strategies, too often the 5 Ps are ignored, leading to a transitional catastrophe and total communication breakdown, but Proper Preparation Prevents Poor Performance and there needs to be a detailed strategy in place, complete with contingency. It’s not enough to show up, throw some money and expect to get the same performance from your hastily assembled new offshore team as you would be getting on home soil. The transition process from onshore to offshore is different for every business and needs to be handled delicately, with attention and care.
A hard cut off is rarely successful and the more time can be allowed for a seamless transition between offshore and onshore the better, with both teams working in tandem for best results, until the onshore team can gradually scale back and hand everything over once all parties are comfortable.
Of course, it’s a myth that the existing staff, even incentivised by redundancy and loyalty payments, will make the best trainers for your new staff. They’ll also pass across any bad practices they’ve gotten into the habit of. As a result, it can be advantageous to treat the transfer of responsibility of a business function as an opportunity to perform a comprehensive top-down review of methods and working practices. After all, there will be significant upheaval as it is, so why not use this to your advantage? Bringing in professional trainers to support the new staff will often yield better long-term results than relying on your demotivated or burnt out current staff.
6. Lack of Collaboration
Collaboration is key to any successful growing business and a poorly implemented offshoring operation can see years of hard work undone as demotivated staff fail to interact across borders. The commercial reality of outsourcing is that there will usually be job losses, and these are rarely conducive to a positive working environment so it’s really important to fully recognise the scale of the task ahead of you.
Mitigating the impact of an unsettled domestic team can mean the difference between reaching your offshore goal within three to six months and having the process drag out over a costly period of years.
Consider whether the teams you’re outsourcing will be moving en masse or whether you’re shifting certain functions within a wider department, where those remaining will likely feel under increased pressure whilst those not being retained will resent those staying on. In such circumstances, it can be worth evaluating whether the entire department can be outsourced together. So for instance instead of offshoring the accounts payable function of your finance operation, could the whole accounts department be deployed overseas?
7. Language and Cultural Differences
It’s easy to dismiss concerns around language barriers and cultural differences in a world as connected as ours is today. Your chosen contractor may have staff that speak the language of your customers and their leaders may seem closely culturally attuned to your representatives. However, they still come from a different culture and may well have deeply held religious beliefs, complex family structures, and widely varying attitudes to business hierarchies. None of these necessarily pose a problem, superficially, but when the going gets tough, which it will, you need to be aware.
This is precisely where an effective supervision and monitoring team will come into their own. The reporting of operational issues where something has gone wrong can easily be overlooked if your contractor’s management staff are not on top of this. Sometimes it’s necessary to dig in and apply pressure to get to the root of misreported issues, which is time-consuming and frustrating. You need a supervisory team acting as your eyes and ears at all times, helping to reduce any occasions where the head office has to step in.
Trust the Right Integrated Outsourcing Solutions Provider
Suffice to say that when you engage Integrated OS to manage your offshoring project we will leave no stone unturned in terms of covering every possible outcome and solution. Even businesses who’ve had a bad experience in the past choose to work with us because of our solid reputation for attention to detail and delivering measured results.
If you recognise any of the above pain points, whether as part of an unsuccessful previous operation or simply as scenarios that have put you off taking the plunge with offshoring, why not speak with Integrated OS today and we can help put your mind at ease.