his article was kindly provided by one of our valued partners, Sharon Melamed – Managing Director of Matchboard, a free online matching service for sales, service and back office. Sharon is a BPO industry veteran, having spent 20+ years in the US, Japan and Australia, helping hundreds of clients set up contact centre and back office operations in global markets.
Thinking of going offshore? Here are some tips.
As Shakespeare famously said, “All the world’s a stage”. And in today’s business world, if you’re not playing on it, you may be missing a golden opportunity to lower your costs and grow your business.
From start-ups to established firms, the march of Australian companies offshore is gathering momentum. Enabling this trend are countries such as the Philippines, where there are now a range of outsource vendors with models and tools to make life easy for offshore first timers. These vendors often have an account manager or sales representative on the ground in Australia; some are even owned and operated by Australian entrepreneurs, removing the cultural barrier which can thwart success.
What sort of functions are suitable to offshoring?
Typically it’s the “grunt work”, rather than strategic functions, that are best offshored. Here are a range of real-life examples that work well offshore:
What are the key advantages of offshoring?
What operating models are available offshore?
Hopefully you are now asking yourself the question, not “should we?” but “how should we”? If you’re a small business, there are two models you should consider to go offshore:
The most common, “traditional” operating model offshore is business process outsourcing (BPO) to a third party. There is no shortage of BPO vendors clamouring for business, ensuring a highly competitive process. Pricing is often per hour per FTE (full-time equivalent) or per transaction. This approach is uncomplicated, since the outsourcer is contracted to manage the hiring, training, technology and operational performance. Since there is no requirement to establish an entity on the ground, the complexity from an HR, operational and legal perspective is relatively low. The risk is also low, assuming a reputable vendor with proven expertise delivering similar contracts is selected.
This is where you work with a third party to establish an optimal mix of their services and people and yours. For example, you would likely control and directly manage the workforce, but the third party would provide the infrastructure and shared support services, such as HR and IT. The staff leasing model is more suitable if you like having full control – you can fly over (or Skype) and interview and select the people you want working on your business; you can implement your policies, your KPIs and provide your own training. The other key advantage of this model is that it’s cheaper than traditional outsourcing, as it is not a turn-key solution where the outsourcer has accountability for the staff’s performance.
So where do I start?