Even today, when offshoring outsourcing has come under some pressure in public debate, it remains obvious that the offshoring phenomenon is here to stay, at least for a good little while. Offshoring, says Infosys Technologies Ltd sr consultant Vijay V Bhat, is the system of packaging a set of your organizational tasks and hiring another company situated in another country to perform these tasks for you as a billable service. The service providing company provides you a dedicated workforce to perform these tasks for mutually agreed cost and quality terms.

Well, then. It is here to stay? So be it: facts are facts, and  let us just continue the matter. This might be your state of mind, but hold on for a moment. Let us take a wee time to explore the reasons why the offshoring construct on business has come under such scrutiny, and maybe find out how we can learn from this and still make the most of our offshoring ventures.

 

WHAT'S THIS OFFSHORING BUSINESS?

 

From discussions with our clients at Dunya and India Business Support, it seems that the hesitations and doubts, in general, are both external and internal. External is the public outcry against outsourcing by stakeholder parties in the offshoring countries because of the loss of jobs to people in the domestic labour market. Internal is the fact that offshoring, having been installed with the primary aim of cost reduction, so often seems to be leading an expensive life of its own: Initial investment in the set-up of infrastructure, training of staff (both at home and abroad), intercultural streaming, and other such preliminaries quickly demonstrate that the cost advantage promised runs away like water from a sieve as one goes forward. It seems as if the actual costs and poor quality of offshored services are the undiscussed basic features behind the attractive packaging of the offshoring suppliers. As if the Sultan of the Topkapi would have bought damsels for his harem without ever having taken off their preciously embroidered veils. Katten in zakken kopen, say the Dutch: buy cats in bags.

The external critique can and must be managed on an ethical, political and macro-economic level, which is a slow process by definition, and one of running behind the facts by reputation. But be managed it will, eventually – since structural changes in our global society have always happened and will always be happening, and adaptation to these changes following suit is but a key factor to the survival of humankind.

It is the internal rebuttal which is the one which needs managing now, quickly, and efficiently. And here, the disenchantment has everything to do with the initial stand of the offshorer company, and the false expectations thus inherently created.

 

OFFSHORING, OR A SWOT WITH A FORGOTTEN O  

 

The crux of offshoring, says Bhat (cf supra), is cost, and better operating margins for the companies offshoring to India, China, or any other country. This means that cost reduction is generally taken as the one and foremost parameter to decide for offshoring. Taking the offshorability matrix we have introduced with Dunya, with I for internetability, T for teleworkability, IC for information content and WD for wages discrepancy, this comes down to being blindly guided by even the slightest downward plotting on the WD axis, provided I, T and IC have values greater or equal than zero. Coz money is what this is all about, innit?

Now, here is exactly where many offshoring projects are going wrong from day one. Having gone through the process of plotting offshorability, offshoring is easily decided upon, where the strenghts are identified in cost reduction and cost reduction only, the weaknesses in the dislocation parameter and the fact that work needs to be done in an altogether different cultural background, and the threats in the external and internal factors as discussed above.

In other words, the discussion is closed and the decision is taken with an incomplete SWOT at hand, as if the O for Opportunities was disdainfully mistyped as an N for Nuisance, being the nuisance of having to cooperate with them rather than us. Or: Let us save an awful lot of money, and the nuisance of having to do this with the Indians, we are ready to take for granted.

So what does this entail? Turning the O of SWOT into a redundancy, or even worse: replacing it with the N for Nuisance, cannot but dislodge our decision making process from its neatly balanced positive vs negative saddle. And therefore, a decision taken on a SWT or a SWNT must be useless from the start.

Indeed, the key to making our offshoring ventures a success is to carefully fill out an O-list as we begin. To go out of the box, and ponder on the choice of opportunities which offshoring might bring along. To list the assets and added values that working with an offshoring supplier might encompass, to categorize the offshore resources as opportunity generators rather than cost reduction generators, and to look for means and ways to incorporate the strenghts, whether they are organisational, historical or purely cultural, which our new business partner might be offering, albeit inadvertadly, as part of the package.

 

THE (DUAL) CASE FOR INDIA

 

When considering offshoring to India, most Indian businesspartners are bound to point out that opportunities are there for the taking, and it should indeed not be all that hard to complete an O-list to balance your SWOT.

Conventionally, most authorities (and Vijay Bhat, cf supra, is no exception) will demonstrate the assets of India in three areas, viz. its predictability, its consistency, and its work ethic.

Great! But before going for it, we would better be careful, conscious of the challenges we are about to encounter, and ethically sound in what we do. And let us not forget that India, albeit on the verge of joining the top economical players in the world, is still a country with a massive social disequilibrium and with an enormous load of people living in abysmal social and economic conditions.

 

IBS IS WITH YOU ALL THE WAY

 

You can count on the experienced services of India Business Support to be along your side as you go through the entire process: from plotting the offshorability of your business process, choosing your offshoring/outsourcing partner, setting up the deal, going through the paperwork and establishing a sustainable and durable business relationship, to preparing and training your staff to accept and welcome the offshoring move, training your team leaders to manage teams at a distance and to manage intercultural teams, training the workfloor in how to deal with Indian colleagues, and assisting everybody through a process of mutual acculturation - a prerequisite of turning your offshoring venture intoa grand succes in the long term.

 

SOME SUGGESTED TRAINING PACKAGES

 

Below are some of the suggested training packages which should be useful for you throughout the roll-out of your offshoring/outsourcing venture. More training packages can be found here.