Key factors to consider before outsourcing offshore
With the need to drive cost savings and efficiencies, many organisations are considering turning to offshore outsourcing as a means to solve problems with their customer support and call centre operations, back-office functions and IT services’ needs. But what are the consequences you need to consider before taking these functions offshore and what really should you be mulling over before taking the plunge? In this article, we’ll aim to explore just that, and provide top tips on how to outsource effectively.
What is offshore outsourcing?
Offshore outsourcing (commonly also known as “offshoring”) is a business practice where a company contracts out certain tasks, services, or processes to third-party service providers or suppliers located in foreign countries. This is often done to reduce labour costs, access specialised skills, or improve operational efficiency. It involves delegating work to offshore teams, typically in countries with lower labour costs and operational expenses, while the client company remains headquartered in its home country.
What to consider before outsourcing offshore?
Choosing a location
Do your homework to understand the availability across the market. This includes identifying potential regions or countries that could offer your organisation growth opportunities.
Look for areas with a growing economy, a stable political environment, and a strong demand for contact centre services.
Ensure that the countries you have identified can deliver the services you need, including any technological requirements and language capabilities.
Understand the language capabilities in each of your chosen locations. A language barrier could have a significant impact on effective communication and partnership.
Be open to other countries that you may not have considered that are potentially further afield – closer may not be the right solution for you.
Explore emerging markets alongside the traditional offshore locations, to give you a better picture of what’s available.
Ensure that the location and the suppliers you have identified align with your organisation culturally, as this will heavily impact your customer service interactions. Only choose locations where the local culture aligns well with the customer base you intend to serve.
Gain knowledge about cultural nuances and customs, as this will enhance customer satisfaction and agent performance. Suppliers will often be able to support you with the knowledge and experience of local markets, helping you to navigate any cultural, regulatory or logistical challenges.
Compare the cost of doing business in various regions offshore to ensure that you have identified the most cost-effective option for your business.
Look for locations that offer scalability – suppliers in offshore locations often have many different areas of knowledge, skills and technological capabilities available, and are able to scale quickly.
Ensure that the location you choose has room for future growth and that there is a possibility to expand operations. Consider an overall view of all available suppliers across the country, should you require additional resource in the future.
Plan ahead and think about the long-term viability of the chosen market and what strategic implications this has on your overall operations.
Choosing a supplier
Prior to committing to any new supplier, take the time to conduct thorough due diligence and put robust contracts and effective management practices in place to protect your organisation from any risks to your supply chain.
Identify a supplier that complements your own internal culture – this partnership should be seen as an extension of your business, rather than creating an “us” and “them” culture.
Choosing what to outsource
Outsource non-core activities to offshore suppliers, so that you can better allocate your internal resources. This will help to enhance your focus on strategic initiatives, innovation and business growth.
Choosing how to outsource – onshore or offshore
Weigh up the benefits of choosing an onshore or offshore supplier. Offshore locations can give you access to a global talent pool with highly skilled professionals who may be unavailable or costly domestically.
Explore the opportunities that a different time zone could have for your organisation. Choosing an offshore supplier means that you could extend your business hours and provide 24/7 customer support, enhancing your customer satisfaction and increasing your competitiveness in the global market.
Carefully weigh up the financial benefits of onshore and offshore outsourcing first.
Remember that cost savings should be considered alongside many other operational elements when sourcing a supplier onshore or offshore.
There’s certainly a lot to consider before deciding whether offshore outsourcing is for you. While it can bring financial benefits, access to global talent and greater efficiencies, if not conducted properly, it can bring greater organisational risks and cultural challenges. It’s important to fully consider the current and future needs of your organisation, before deciding whether offshore outsourcing is the right strategy for your business.
At The Knowledge Group, we can support you with finding the best solution to meet your organisation’s needs. Whether you’re starting out on the journey with outsourcing or are considering scaling your operations into locations further afield, our solutions are tailored to our customers. With our real-time dataset of contact centre and BPO suppliers across the globe alongside our industry expertise, our team can support you meet your outsourcing needs.