|
The latest statistics suggest that over 40% of companies worldwide have embraced outsourcing to some degree – either offshore to countries like India, Russia and China – or onshore, to local specialist groups.
The reasons for this incredible growth in acceptance of outsourcing are many, with the most obvious being reduction in expenses and headcount. For example, in the case of the offshore model, why pay an employee $25 per hour (plus super, insurance, sick pay etc etc) for work that can be done for $5 per hour offshore? Certainly this saving is an attractive option to many CIOs. But what is the downside?
As with everything in life, there are pro’s and con’s that need to be carefully considered before choosing between onshore or offshore.
Offshore – The Pro’s
Yes, there are immediate dollar savings to be realised when the offshore model is chosen. Yes, many offshore companies have made significant improvements in their services as demand for their services have increased.
For services such as accounts payable & receivable, email support, forum management and the like – non-voice tasks – outsourcing offshore presents a strong case.
And there are the con’s...
Offshore – The Con’s
I have personally seen companies switch from onshore to offshore suppliers too quickly, in order to achieve cost savings, only to pay far more than they ever anticipated shortly after...
The incumbent performed far more work than the new supplier (or the customer) realised. The long-standing relationship with the incumbent had resulted in additional effort with extra attention, without additional costs. Language and time-zone barriers resulted in longer resolution times, and communication & training issues. The result was that the customer had to pay the incumbent additional consulting and knowledge-transfer fees which they never anticipated.
Onshore – The Pro’s
The primary advantage of outsourcing onshore is that your customers are answered by local representatives of your company, while still reducing your support costs. This makes it ideal for call centres and support centres, where support staff will benefit from ‘local knowledge’ of culture and language.
As with the offshore model, onshore outsourcing can allow you eliminate headcount issues, and free yourself from the many headaches associated with running an internal support organisation (team morale, training, rostering, hiring & firing costs, knowledge management, infrastructure costs and so forth).
Onshore – The Con’s
For companies that have been accustomed to supporting their own customers internally, even the mention of “outsourcing” can ring alarm bells. And this is totally understandable, because it represents change. And change is something that we all resist by default – it’s in our makeup!
There can be natural fears raised around loss of control, lack of ownership, and declining levels of service.
Like all important business decisions, due diligence is required to identify the most appropriate outsource provider:
Their approach to customer service – Will they treat your customers as good as – or better than – you do? How will success be measured?
Their background – Do they have experience in your field, or in similar markets? Do they “speak your language”?
Their hiring process – Do they specifically hire the kinds of people required to support your business? Do they care for their staff to ensure longevity and minimal disruption for your customers? Or are they churn & burn shops, hiring anyone with a pulse?
Their reporting capability – Will you be able to request custom reports to suit your needs? Will the reports be meaningful to you, allow you to identify trends, “top 10” issues, and detailed breakdowns? Or will you be forced to use “off the shelf” reports with minimal information?
Their price – Where do they fit in the pricing spectrum? Too high, and you may not realise the savings you seek. Too low, and there will be concerns around quality of service (who are they hiring to sell you the services, and still turn a profit?)
The people behind the company – Are you comfortable in your dealings with the owners / leaders of the company? Do you feel pressured at all during the process? Have they been “pushy” at all during the process to date? The right people will be courteous, respectful, patient and helpful from your very first meeting with them. Successful outsourcing takes place when there is trust established between both parties – how you are treated in the early stages is normally an indicator of what to expect down the track.
Ultimately, outsourcing – offshore or onshore – is not for everyone. That’s a given. There are some companies... some products & services... some situations, where the best option is to in-house technical support and customer service.
But given the strong case for outsourcing, it is at least worth weighing up the “pro’s & con’s” as they apply to your own business before reaching a conclusion.
|
