3 Signs Offshoring Your Business Is Set To Fail

by | 31 July 2018 | Blog Activity

Offshoring success stories and case studies are everywhere. Sure enough, you’ve already heard of the immaculate benefits brought by offshoring. Some of these prominent promises are improved productivity level, efficiency, and a significant reduction in overhead costs.

But it’s also worth noting that Business Process Outsourcing or BPO providers often fail to discuss the major pitfalls Australian clients may soon be facing.

There is no 100% satisfaction rating over any business model. Which means not every offshoring client is set to succeed!

In fact, some studies suggest that 36% of businesses claimed that their offshore strategy is a “failure”.

The reason behind this? Business executives would only rely on capital cost-benefit analyses to decide whether the company is ready for offshoring.

Not only that, most BPO companies are rather failing in educating Australian businesses about the right way to offshore. These shady topics associated with offshoring risks are often disregarded, leading to a dissatisfied business owner.

Shore360 does not shy away from this topic; as we would like to help more business owners find freedom through offshoring the right way.

So before following the offshoring trend and jumping right into the water, consider testing the temperature for your business first.

3 Signs Offshoring Your Business Is Set To Fail

1. Failing To See Each Process’ Value

    Not every job position can be outsourced to another country, regardless of how cheap the labour is or how good the offshoring staff is.

    Before deploying a job to an offshore employee, analyse the job positions first and look for the ones best set for offshoring. Start ranking the value of each position on the overall business process instead of looking for a way to reduce labour costs. Seeing the positional value helps create a systematic strategy for the overall business process.

    Each staff possesses great contribution to the overall business process. Allocating an offshore staff has both its risks and rewards. For an example, an accounting firm may opt to outsource its payroll administration service to a BPO provider as it would reduce massive overhead labour cost. It’s true that the reward is great, but you could be risking your company’s overall credibility if the payroll administrator makes a few errors. The company’s services and reputation could easily be questioned.

2. Lack of Risk Analysis and Management

    Oversee the probability of an operational risk after identifying which jobs can be allocated to an offshore team.

    Operational risks may include a rough transition, difficulty to build the right expectations, lack of onboarding or training, the failure to see eye-to-eye with the cultural difference, etc.

    The decision to offshore is a big moment for any kind of business, regardless of what size. It is not an instant gratification that can be easily passed from one operating country to another.

    You must also avoid setting irrational expectations: offshoring promotes better productivity, efficiency, and lower labour costs. It is not a solution that will magically resolve everything else wrong in your business.

    A detailed transition with a clear-cut communication with the offshore team is a great player in mitigating the risk.

3. Not Partnering With The Right Organisation

    Find the right offshoring partner who respects your company’s culture and goals. This can help you promote mitigating the operational and structural risks you could soon be facing.

    Remember: a BPO provider will not only serve as the second venue of your business, but it will also be the daily environment of your offshore team. Which is why it is important to find a provider who, if does not share, then at least respect your business goals and process.

    It is always best to personally visit the BPO provider to confirm your find before merging your culture into their services.

Offshoring, despite its truly remarkable business advantages, has its own risks and dangers that BPO providers typically avoid in discussion. Consider analysing offshoring and outsourcing in a different angle, like on how it could fit your unique business model instead of simply following the growing trend.

Contact Shore360 now for an in-depth consultation on how to leverage offshoring specifically for your business.