Issues to consider before outsourcing
Bhumika Ghimire
March 18, 2006
Outsourcing is not a one stop solution for all the troubles a company is facing. It does not guarantee profit or increased market reach. Therefore, before a company decides to offshore its work, it has to conduct a detailed survey of its operations to find out whether off shoring is the best solution. Many times companies fail to recognize the real issues troubling their operations, and decide to outsource for the wrong reasons.
After identifying the issues faced by the company and how outsourcing might benefit, the company needs to set a clear objective for off shoring and its goals, and make sure that it is discussed with the off shoring partner. Many times companies have experienced that there is a communication gap between them which make it harder to understand the deliverables. Cultural difference plays a key role in this communication gap. Outsourcing destinations like China or India have an implicit culture. More is understood without spelling it out explicitly. American companies have to keep that in mind.
Selecting an off shoring partner is also an important decision. Before that, the company has to first decide whether it wants to have its branch office in the off shoring location or to send its work to an existing offshore company. Working with an existing company is beneficial if the work being off shored is small or intermittent in nature. While it is a good idea if the company has a large volume of work to be off shored, which is of critical importance to the company to have its own branch.
If the company decides to work with an outside company in the offshore location, selecting the partner has to be based on the past performance, references and also compatibility with the company. The compatibility factor is important because as partners both companies have to understand each other?s business and be able to take advantage of each other?s expertise. If the companies have totally different ways of working and areas of business, it is difficult to work as partners.
While selecting an offshore location, a company has to keep in mind that the location should have the technical infrastructure to support the project. Also, political stability and cultural issues have to be considered. It is better to have a location which is stable and in culturally aligned to the home base. In recent days companies have faced criticism over the standard of customer service provided by the off-shored call centers. Differences in accent and cultural misunderstandings have mainly contributed to the complaints rather than the actual level of service. A company has to keep this in mind.
Since there are going to be jobs shipped to another country, employees in the company are bound to feel some kind of anger or resentment against the company and employees abroad. The company has to make special effort to address the fears and anxiety employees have and explain to them the reason for outsourcing. Also they need to show to them that they are valuable to the company.
A company which takes care of all the above issues with special priority to the employee relationship will most likely have a smooth off shoring experience.
After identifying the issues faced by the company and how outsourcing might benefit, the company needs to set a clear objective for off shoring and its goals, and make sure that it is discussed with the off shoring partner. Many times companies have experienced that there is a communication gap between them which make it harder to understand the deliverables. Cultural difference plays a key role in this communication gap. Outsourcing destinations like China or India have an implicit culture. More is understood without spelling it out explicitly. American companies have to keep that in mind.
Selecting an off shoring partner is also an important decision. Before that, the company has to first decide whether it wants to have its branch office in the off shoring location or to send its work to an existing offshore company. Working with an existing company is beneficial if the work being off shored is small or intermittent in nature. While it is a good idea if the company has a large volume of work to be off shored, which is of critical importance to the company to have its own branch.
If the company decides to work with an outside company in the offshore location, selecting the partner has to be based on the past performance, references and also compatibility with the company. The compatibility factor is important because as partners both companies have to understand each other?s business and be able to take advantage of each other?s expertise. If the companies have totally different ways of working and areas of business, it is difficult to work as partners.
While selecting an offshore location, a company has to keep in mind that the location should have the technical infrastructure to support the project. Also, political stability and cultural issues have to be considered. It is better to have a location which is stable and in culturally aligned to the home base. In recent days companies have faced criticism over the standard of customer service provided by the off-shored call centers. Differences in accent and cultural misunderstandings have mainly contributed to the complaints rather than the actual level of service. A company has to keep this in mind.
Since there are going to be jobs shipped to another country, employees in the company are bound to feel some kind of anger or resentment against the company and employees abroad. The company has to make special effort to address the fears and anxiety employees have and explain to them the reason for outsourcing. Also they need to show to them that they are valuable to the company.
A company which takes care of all the above issues with special priority to the employee relationship will most likely have a smooth off shoring experience.
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