Derek Gallimore is a contributor to Entrepreneur.com and a member of the Entrepreneur Leadership Network. This article was first published on Entrepreneur.
Offshoring has been an effective way for companies to run their businesses for decades now. Most people have been hearing of success stories such as in Skype and Slack — both of which delegated software development to several countries.
Global businesses simply look for the “cheapest” possible solutions to run a company. Now, as they see the good in offshoring services, experts believe that clients outsource for “outcome and value.”
The only way to achieve success in offshoring is to have a service provider that provides the best value and quality for you.
Will offshoring be good for your company?
To start, offshoring refers to the delegation of business functions to a country miles away from your home country.
Companies usually contract destinations such as India for their low costs and quality performance. Over the past year, offshoring has provided viable solutions for business continuity amid the restrictions.
Statista recently listed the leading countries in offshoring services worldwide. Each of these countries is ranked in terms of financial attractiveness, workforce availability and business environment.
Offshoring is good for your business when done right. It even provides you the following benefits:
- Executive expertise. You can work with a team with executive-level expertise at a fraction of a local employee’s salary.
- Round-the-clock services. With offshoring, you can offer round-the-clock services to your customers for their convenience.
- Assured continuity. Offshoring even helps you continue your operations in the middle of a crisis, calamity or even a pandemic.
- Diverse knowledge. Lastly, your team’s diverse knowledge can contribute to improving your processes and products more.
How you can choose the right offshoring partner
While it’s easy to outsource your services offshore, it can be difficult to find the right offshoring partner. Banking on the outsourcing success stories of companies won’t be enough for you to dip your toes in the industry right away.
Here are some tips for choosing the right offshore supplier for your business.
Search for your preferred destination
Firstly, start by searching for your preferred offshoring destination.
Aside from India and the Philippines, several other destinations such as Vietnam and Malaysia continuously build their credibility and popularity in outsourced services.
Choose at least three business process outsourcing (BPO) companies as an option
Don’t just settle with the first or most accessible BPO company within your reach. By doing this, you’ll miss out on getting the best out of your outsourced services.
It’s best to have at least three BPO companies you prefer. Then, analyze them according to their quality, pricing and legitimacy.
Check on the quality and price
Just because your offshoring partner is cheaper doesn’t mean you instantly get the best service. Check some testimonies from previous clients on how their pricing and service goes — and if their prices are in line with the quality of their work.
You can also request a trial run of their services to see if they can meet your expectations at hand.
Establish communication with your offshoring partner
Lastly, learn to establish communication with your offshoring partner, especially when you start delegating your functions.
Try to discuss with your service provider your purpose and objectives in offshoring, your preferred outcome and your metrics and KPIs to measure your team’s performance.
A few things you need to consider about offshoring
There’s no one-size-fits-all formula in offshoring. What strategy works for others might not work when you delegate your functions offshore. You need to study as much information as possible in navigating the industry.
At the same time, there are some things you should and should not do when outsourcing.
With this, you need to consider the following factors before offshoring:
- Plans and strategies. First, you have to properly plan your offshoring steps and strategies. This serves as a guide as to why you outsource and how you can effectively manage your functions.
- Functions. Almost all of your functions can be delegated to an offshore provider. However, you have to determine which of your functions you feel most comfortable in delegating miles away from you and what should stay in-house.
- Budget. As mentioned, the cheapest option does not always mean the best one. Allocate a reasonable amount to invest in your offshore teams and strategies without sacrificing your quality.
- Language and cultural compatibility. Cultural and language barriers will still exist whether you outsource to the Philippines, Vietnam or Malaysia. This is why you have to learn more about your preferred offshore destination and how you can approach them better.
- Service agreement. It’s also important to have everything written in black-and-white for transparency and accountability in each party. Make sure to have everything recorded through a service-level agreement (SLA), including their pricing structure.
- Backup plan. Lastly, your offshoring strategy won’t always work out. Either your team might not reach your expected outcome or you want to change your offshoring strategies when expanding.
It’s best to have an exit strategy or a backup plan in case you need to change your provider.