Why Offshore Outsourcing Should be Your New Year’s Resolution
If you’re not already there, then going global through offshore outsourcing should be one of your New Year’s resolutions for your business.
I and others have written extensively about the advantages to all types of businesses in leveraging offshore to give your business a global delivery engine to exceed your customer’s expectations. The barriers to using offshore in your business have fallen so far, so fast, that the only thing that may be holding you back is your own fear. Like always resolving to lose weight, have you really put your mind to actually doing what you need to do to improve your life (business)?
While I’m not qualified to be your therapist to help you figure out why you can’t lose weight, I can continue to remind you why the global marketplace offers us so many advantages that can help your business. Here are my top 5 reasons in order:
1. Positioning you for growth
This is basically why I founded Fair Trade Outsourcing. While growing the company, we had 3 key opportunities that required a large, scalable, talented labor pool. In each of these cases, the tasks involved could not be automated and required the human brain to accomplish them. Thus, we needed an affordable labor pool with the right skill set that could scale as we needed to scale.
We found it in the Philippines and built a number of teams that were very successful. These teams enabled us to change not only our business but also the business of our clients through our high quality, low-cost delivery model. We were literally able to create products and services that couldn’t exist de-coupled from our offshore teams, and those products and services grew as a result of the marrying of our onshore and offshore talent.
When I speak of offshore outsourcing being strategic to your business, this is what I mean. Do you have a thorny problem that you’ve not solved because the labor to solve it would be too expensive? Is there an area of your operations that soaks up too much cost and not delivering much return? Is there a business opportunity that you’d like to pursue, but you’re worried there’s not enough gross margin in it to pursue? If so, offshore is your solution.
And it’s damn fun to make work in the process.
2. Talent pool
You must always be looking around you to spot trends that can benefit you. It should be no surprise to anyone that the internet has democratized information globally. One of the greatest beneficiaries of this trend has been education.
Today in the Philippines universities are training their accountants to US accounting standards, their engineers to the US and Australian building codes, and their chefs to global food trends. The skills translation problem that may have existed in many professions even 30 years ago is virtually gone now, especially if the offshore talent pool is willing to learn.
As I’ve written before, this means that the biggest barriers to working with an offshore team are often localized to your unique business challenges – the things that make your business unique and individual, not the overall skills needs to perform certain job functions. So if your business has been procrastinating to lose that operational weight and offshore outsourcing is the solution, remember that the learning curve these days is very often the knowledge of what’s unique to your business, not that you have to train your offshore folks to do their job. Whether you hire someone working at the desk next to yours or halfway around the world, you’ll face this challenge no matter what. Act accordingly.
The big guys have been doing it for years. For a good reason. So don’t miss out…
3. Upping quality and process
Asian cultures, and Southeast Asian cultures, in particular, are very good at setting up systems and following the rules of that system. They are inherently communal societies where the good of the whole can rise above the good of the one.
Americans or other western societies may abhor this level of conformity (and don’t get me wrong, not all Asians are like this either), but if we look at the benefit of this societal structure from the perspective of where in the world work should go, South East Asia is particularly well suited to large-scale tasks that require precision and rigor, and they will inherently do them, and follow the process governing their work, much better than their counterparts around the world.
So if you’ve got a process that requires large-scale production of knowledge work against a specific standard, you must consider outsourcing that to a group of people that can probably do the work better than you can.
4. Lower costs
The bottom line is that offshoring to the right place can save your business money, or even more importantly, can make it cheaper to invest in something new that can grow your business, thus creating overall economic output. This is good for both the source of the offshoring (the developed world) and the target of that investment (the developing world). McKinsey has studied this phenomenon quite extensively and has proven that offshore is a classic international trade flow in creating economic activity. If it didn’t, we wouldn’t do it.
I’m in the middle of reading economist Jeffrey Sachs seminal 2005 work “The End of Poverty.” Sachs’ primary thesis is an indictment of his profession – basically that economists are great at pontificating but are really bad at solving real economic problems.
Sachs views poverty as an economic problem that can be solved. International trade that has existed since the time of Marco Polo is not a zero-sum-gain, no matter what U.S. politicians say. International trade has always created economic growth and creates wealth around the globe, and in the process lifts people out of extreme poverty. Oh, and it can save your business money OR allow you to pursue opportunities that you may not have been able to afford otherwise. Sounds pretty good to me — a win-win all around. The conclusion: save money for your business and go do some good around the world at the same time.
5. Time zone
If you’re in Asia and want to work with American companies, it’s a good economic bargain to work at night for both you and the American company for whom you’re working. You’ll earn more if you’re willing to work at night, and the American company will gain the ability to support their customers at all times. It’s a clear win-win.
There are many US businesses that would like to offer their customers the ability to contact them 24×7. They may have been prevented from doing that because the cost of having 2nd or 3rd shift coverage was prohibitive, and thus not worth the operational or financial risk of doing so. If you’re in the western hemisphere, outsourcing solves this problem. It’s clearly a strategic business advantage. Work is done overnight by people whose work hours are smack in the middle of your day. Another great win-win bargain!
If offshore outsourcing isn’t already a tool in your company’s tool shed, then resolve to get up to speed on where the global business service marketplace already is – putting the work where in the world it can best be done. If you haven’t done this already, then you could already be at a disadvantage against your competitors.
So, no matter what you’re planning on doing in your business this year and next year, consider adding offshore outsourcing to your business’ diet. Whether you want to use it as a way to give you a strategic advantage against competitors, solve an acute labor problem, pursue a new opportunity while investing less, or even create progress in your business while giving people around the world opportunities, you can be confident that in all of these cases, you’re creating a win-win situation for all involved. Sounds like a pretty good New Year’s resolution to me.