There is a particular immediacy to being aware of offshoring pros and cons. No business venture is perfect as there will always be risks and disadvantages that come with adopting new strategies. Offshoring certainly isn’t exempt from this as there are some characteristics to it that people may not find appealing.
While Diversify does champion the process, we also want to be certain that potential clients know what they will be getting with offshoring. Presenting offshoring pros and cons will aid in making what could be a very important and informed decision that could shape your business in 2017. Although it is often closely associated with outsourcing, there are aspects to offshoring that make it a different process.
The advantages that offshoring brings revolve the massive savings that it brings. However, companies that adapt an offshoring strategy are also made aware of how it promotes better office culture and transparency between yourself and your remote team.
Offshoring to countries like the Philippines means being able to work with some of the best people they have. The BPO industry in the Philippines is particularly strong, which means that many of their talented people can be found.
• Greater transparency as you manage your team members directly.
The biggest difference between offshoring and outsourcing is choosing the right people for the job. Offshoring functions require a very meticulous process that will result in finding very talented staff members you will work with. You will have direct selection and control of who will come on board with you. A good offshoring provider isn’t content with people who are “good enough” and will go the extra mile to help you find those who can help make your business succeed.
• Employees become long term, value adding members of your team.
Outsourcing is often seen as viable for short-term solutions with staff that can change on a whim. While outsourcing puts more importance on the process, offshoring is much more people oriented. By closely working and engaging with your remote team, they are given a chance to show their skills and how they can help your business grow. This results in having dedicated team members that are loyal to you and your business despite not being there locally.
• You won’t lose control of your data or intellectual property.
Your team members will be operating remotely – they’ll be accessing your server to perform their task; this means they are governed by your local IT security settings and cannot do anything outside of these settings. Diversify also has a range of security protocols in place including no phones in the work area, no local saving functionality and the locking down of certain sites in consultation with you.
• More affordable over the long term.
One major outcome that an offshore team can deliver is assisting your business in growing without expanding your overhead and fixed costs. Outsourcing may seem like the cheaper option between the two but in the long run, offshoring gives your business more bang for its buck as you help cultivate staff members instead of constantly rotating between new ones.
Although a beneficial strategy for businesses, offshoring is something that is not for everyone, especially if you are looking for immediate and short term results. Compared to outsourcing, it takes time to implement an offshoring strategy in order to ensure the quality of service.
This is very particular issue when talking about offshoring pros and cons. Because offshoring requires plenty of managerial and direct control from you, implementing it may take some time. After all, offshoring isn’t a “set and forget” process but rather something that will need your full attention and care. Remember that you not only oversee your staff’s management but their development as well. Ultimately, you need to consider if the juice is worth the squeeze – if you’re looking for short-term gains from an offshore program, this strategy might not be for you.
• You need to provide the business process which ideally requires you to have functional and well-documented process and procedures.
If you have specific requests and objectives from your offshore team, it may require additional training. Your business may not have this luxury or may not want to go through with the process of documenting and refining processes and procedures as it can be arduous. Businesses that need more short term and immediate results may refrain from considering offshoring. It is important to note that undertaking a full assessment of existing processes and procedures can deliver many tangible benefits to your business.
• Service quality remains at the clients’ risk.
When talking about offshoring pros and cons, it often boils down to what clients feel is comfortable for them. It’s understandable that people feel apprehensive about working with an offshore team because of their distance. Most feel comfortable working with local staff as they are easier to reach and the quality of work can be quickly assured. On the other hand, if you believe in the skills of the offshore team that you selected, this may not be a considered a risk.
Overall, offshoring will depend on what objectives you are looking to accomplish. Understanding offshoring pros and cons will then help you know what you need to consider. It may not be what your business needs if you want more immediate results that don’t require your full attention. However, if you see yourself wanting to collaborate with a team that you will develop to function like a well-oiled machine, then offshoring is something to consider.
Interested in getting started? You can drop us a line today to see if you are ready for to take on offshoring.
There’s a lot that has been talked about with regards to how offshoring can be beneficial for any business. And why wouldn’t there be? Working with a remote team is predicted to be a major trend for Australian companies in 2017 and those that aren’t able to adapt quickly may fall behind the rest of the pack.
However, you might still be put off by offshoring because, from the outset, it seems complicated to take all the concepts presented at the same time. Offshoring is by no means a new concept, but it is understandable to feel hesitant about implementing it, especially if offshoring has just been presented to your business as a viable strategy but without any prior knowledge about it.
To get an immediate grasp and understanding of what offshoring is, you can look at “The five Ps” that make up its fundamental basis. Businesses can be more aware of what implementing an offshoring strategy actually entails and how much management needs to come from their end as compared to something like outsourcing (Hint: It’s a lot).
Offshoring, at its heart, has always meant massive savings without increasing any overhead. By hiring a remote staff to be part of your company, you can get excellent quality of work – or even better output- by having them perform functions outside your local team and at a lower cost. On paper, this looks as if offshoring’s main purpose is to replace local jobs. However, this has been debunked; evidence demonstrates that offshoring processes or labour intensive functions can lead to the creation of more roles locally. By offshoring lower to mid-level functions, more doors open up for your local staff professionally – they can upskill and contribute at a higher level.
The location of your offshore team matters but it is also something that is overlooked. Countries like India and Malaysia have often touted themselves as being the best location to scout for an offshore team. However, Diversify has always maintained that the Philippines is the definitive offshoring location. Geographically, the Philippines is much closer to Australia than most other countries that are viable offshoring locations. With only a two hour time difference between Australia and the Philippines, teams from both sides are able to interact at their most convenient time.
It should also be stressed that while considering the country you will offshore to is important, choosing the right the city or region within it also needs careful consideration. In the Philippines, Metro Manila is considered the ideal location as it has access to the country’s best infrastructure and its most diverse talent pool.
When talking about a country’s talent pool, you are referring to the workforce that makes it up. The ones who make up your business are those who will help drive it to be successful. This is why Filipinos are considered some of the best people to have on your offshoring team. Many of them are highly educated and with a 94% English literacy rate in the country, connecting and engaging with them will make your offshoring experience an easy one. This also means knowing the right people who can gel and connect very well with your local team.
So how do you find these talented people to be part of your offshoring team? By being heavily involved with the recruitment process and knowing who you want. While outsourcing means leaving the recruitment responsibilities to an intermediary, offshoring requires a more direct managerial approach to deciding on who will be hired. The process is much longer and can involve setting plenty of requirements on your part, but being able to hire “the best among the rest” will no doubt be a good long term solution for your company.
As seen in all the previous points, offshoring’s most defining characteristic is how it puts a premium on the importance of staff engagement. Because you meticulously pick who you want as part of your team, you not only directly manage their functions and roles within your company, but you also help steer their professional development as well. By being able to assist in shaping their careers and also furthering their skills for different pathways, your offshore team can become all-around staff members you can rely on and retain.
Of course, there’s a lot more to offshoring than these five points. Like with any new venture, there are risks that come with offshoring that you can curtail and address swiftly if you have a proper strategy in place. Depending on your objectives, offshoring may not also be what you are looking for and a short term, less managed strategy is what you may be after. However, it is important to summarize the basics of offshoring and what potential advantages it may bring for you once you have a team and strategy in place.
Want to give offshoring a chance? Contact us today to get started and see what your business can do.
Should I offshore? That is a question that many businesses will ask when they first read or hear about it. Offshoring brings with it many opportunities for businesses to save money, enhance capability, increase capacity and also empower local employees.
These are just some of the benefits that businesses consider when looking at the potential of an offshore program. Each of these ‘benefits’ or ‘opportunities’ means different things to each business. What’s important to one business might not be so important to another, and this is where the challenge may lie – businesses must carefully consider why they are offshoring and why it’s important for the business to do it.
Getting the why clearly articulated from the start will guide your offshore journey and also assist you in determining how important it is to your business.
- My competitors are doing it
- I want to cut costs
- I want to remove time-consuming tasks from my local employees
- I want to become more competitive in a global market
- I want to add capability but local wages make it prohibitive
- I want to use it as a part of my long-term growth objectives
Those are just some of the reasons you might have when considering whether or not to offshore. Why bring these up? These reasons why you want to offshore will ultimately determine the path of your offshore journey and the results you will achieve from it.
We find that businesses looking to offshore just to cut costs will usually experience issues initially as there is a significant investment in setting up an offshore program for success. Cutting costs is a benefit of offshoring, but it should not be the only focus.
Businesses that are looking to use offshoring to become more competitive empower their local team members, invest in long-term growth and enhance their capabilities, and they realise the true value of an offshore team. Offshore team members can take on labour intensive and process laden tasks like graphic design, website development, accounting, payroll, administration and much more. By doing this, you can free up local resources to undertake value and growth oriented initiatives aimed at maintaining or growing revenues!
Most importantly, one of the biggest considerations your business must consider when looking into offshoring is if you’re ready to commit to it as a long-term strategy. Offshore programs are not short-term projects; they require an investment in planning, strategizing, testing, optimising and implementing. Getting your offshore team ready and then priming it to run on all cylinders will take an investment of time, but once these initial hurdles are overcome, your business will start to realise the benefits.
My business wants to offshore; what next?
Okay, so you’ve done your initial research, you’ve documented your ‘why’ and you know that offshoring can play a role in your business strategy going forward – what’s next?
Well just like you would choose a prefered ice cream flavour, there are many different options – you can set-up your own offshore operation (which is fraught with danger and risk, you can ‘outsource’ certain projects on a case-by-case basis (which could pose security or consistency risks) or you can engage a third-party solutions provider to assist you in mobilising your own offshore team.
An offshore solutions provider will assist your business in navigating the complex international landscape – they have local resources ready to assist you in setting your team up. These resources know the local regulations, legislation and local business environment to ensure the set-up process is a seamless one. They’ll identify the talent, they’ll present this talent to you, they’ll on-board to get your team ready for work and they’ll provide all operational support to ensure your team can perform the task required.
Your ‘why’ matters in selecting the right offshore solutions provider
Getting the right offshore provider to meet your business objectives is critical. Depending on your ‘why,’ you’ll look at different providers with operations in different countries and locations. If your main objective is to cut costs, you might look at the provincial areas of the Philippines like Clark which are located far away from major urban hubs. Although it’s cheaper, you’ll find the talent pool is much smaller and you’ll have difficulty finding highly-skilled candidates. Most importantly, you’ll struggle to build a long-term, high-performance team.
Locations like Makati City and BGC which are based in major metro-hubs are the other option. Although the costs may be higher, if you’re business’ ‘why’ was to grow with highly-skilled candidates and empower your local team members, this might be the location for you.
Metro Manila boasts a diverse and highly-skilled talent pool. Put it this way: your company is based in Australia and you’re looking for talented developers. To get this talent, you’re going to look at recruiting in Sydney or Melbourne. You won’t find this talent in rural areas like Gladstone or Tamworth. This is comparable to regions like Clark in the Philippines. To get the best talent, you need to engage service providers with a presence in key locations.
Not only that, the employees are highly-engaged and have access to key amenities and infrastructure, similar to what we enjoy in Australia. Why is this important you ask? Well, consider this; to have an engaged team is to have a high performing team – they’ll work harder for you and provide your internal and external stakeholders with great service. They’ll also stick around for much longer, meaning they’ll become critical components in your extended global team.
Okay, I’ve selected my offshore solutions provider, what’s next?
Once you’ve selected a solutions provider, the real journey begins. This provider will work with you and your team from start to finish; from mapping out and refining processes while also answering the questions “what functions should I offshore?” through to identifying and recruiting talent and on-boarding your team.
Your solutions provider will ensure your team members have all operational support – from the set-up and maintenance of their IT needs through to marketing and human resources support. All that is left is for you to manage your team member’s workflow and ensure they’re completing the tasks required.
Your provider will work closely with you to get the best out of your team members. It might seem like a daunting process but, if you’ve selected the right service provider, this process should be seamless. Always remember that getting your offshore team up and away is not a short-term process, there will be teething pains and there will be problems that may arise, but stay committed… you’ll realise the benefits once these are overcome!
By asking yourself “should I offshore,” you will help determine if it becomes a vital part of your business strategy. If you think you are ready for it, drop us a line today to get started.
The latest Commonwealth Bank Legal Market Pulse results are in, and offshoring continues to be a major option for legal practices looking to reduce costs and offer significant value to clients. More of them are realising the opportunities an offshore workforce can deliver; opportunities that can be realised by businesses operating within any industry sector.
Over the next two years, the survey indicates that the number of larger firms offshoring work will grow from 9% to 14%. This percentage of mid-practices offshoring will increase from just 1% to 7% as more of them realise the potential offshoring can offer in reducing costs and maintaining or improving margins.
The perception of offshoring continues to shift, with businesses realising that the approach does not just bring on the opportunity of cutting costs, it allows for costly local team members to be liberated from lower-cost activities, letting them focus on the areas that can deliver the greatest value to your business.
More and more firms are starting to express the view that offshoring can have a positive impact on their profit margins. In the survey, research and discussions conducted by the Commonwealth Bank indicated that:
- Offshoring can help firms take control of their future, rather than relying on market conditions to improve; and
- Firms who spend on offshoring are more likely to be neutral about business conditions rather than negative.
Although this survey was conducted on the operators’ within the legal sector, the findings apply to all business. Offshoring can reduce cost pressures that are building on business, empower local team members to focus on growth activities and, most importantly, maintain or grow profit margins.
Some key quotes contained within the survey by leading Commonwealth Bank executive, Marc Totaro, Head of Professional Services, included
- “Outsourcing offers the opportunity for firms to focus their investment in hiring and retaining quality staff in the areas where they can achieve the greatest impact. The key is to closely examine each step in your processes to identify the areas where you have the greatest competitive advantage.”
- “Firms who master the art of successful price negotiation not only achieve higher margins, they can also increase client satisfaction and build stronger relationships by highlighting the value they offer, rather than the costs they charge.”
If you would like to learn more about how an offshore team can deliver value to your business, get in touch with Diversify today. Also, take advantage of our complimentary offshore readiness review – we’ll schedule a discussion and overview of your business and see which functions can be effectively offshored.
It’s a worrying time to be a small to medium business owner if the results of the latest Scottish Pacific SME Growth Index are anything to go by.
The report, initiated by Scottish Pacific, engaged a leading independent researcher to conduct six-monthly polls of 1200 small to medium business leaders across a number of states and territories.
Some of the key findings outlined in the Index include:
- Business owners are working up to 80 hour weeks
- They are losing sleep over cash flow, and it has been named as the top concern – 72.5 percent of respondents say cash flow keeps them awake at night
- There isn’t enough time to get things done – 55 percent of respondents said they don’t have enough time to get things done
- Digital disruption isn’t always a good thing – 17.3 percent were worried about the disruption of their business models
- One in four are predicting revenue to decline through to the end of 2016 – the number of businesses predicting decline has almost doubled from 13.2 to 24.2%
- Small businesses are looking to non-banks for funding to ease cash flow concerns
- Technology isn’t always a good thing – Almost half of the respondents (44.6 percent) believe that mobile and digital technology has had a negative impact on their work life.
For more detailed information, please visit the report home page by clicking here.
In a rapidly advancing global and digital environment, businesses, of all sizes must become more competitive, leaner and agile in order to maintain growth and success.
In order to meet these challenges head-on, business owners have to look at alternate strategies which can drive efficiency and accelerate growth.
Meet these challenges head-on with an offshore team
Here at Diversify, we understand the challenges that small to medium business face. That’s why we offer businesses, of all shapes and sizes, access to highly-skilled and digitally-enabled workforces in the Philippines.
Offshore teams are more viable than ever with the breakdown in geographical barriers through advancing digital technology channels. You can access a global team by simply putting on a headset and using Skype… it’s that simple.
More and more businesses, especially the larger end of town, have realised the power of offshore teams – maybe it’s time you considered it for your business. Why?
Well, let’s look at how offshore teams can address some of the issues identified in the Scottish Pacific SME Growth Index.
- Reduce your workload by offshoring labour or process intensive tasks – Business owners can free up time and resources by offshoring time-consuming and low-value tasks.
- Access cost-effective Filipino employees – Business owners can realise more than 70% in savings by offshoring. Businesses can look at offshoring back-office roles and invest the savings in other areas of their business. This can also assist businesses in increasing their bottom line.
- Increase capacity with offshore team members – Businesses who are struggling to keep up with demand can increase capacity by adding offshore team members.
- Digital advances have made communicating globally easy – With technology advances, you can communicate with your offshore team as easily as you do local team members.
Diversify Offshore Staffing Solutions works with businesses to identify how an offshore program can work for them. We’ve assisted businesses in adopting an offshore strategy successful and working with them to realise the benefits.
If you’d like to learn more about offshoring and how it can assist your business in meeting the challenges raised in this report head on, please contact me via private message or visit our site.
Reference: Scottish Pacific SME Growth Index – http://www.scottishpacific.com/
The simple fact is that the business environment is becoming much more competitive and the importance of offshoring is becoming much more apparent.
With the breakdown of geographical barriers through the advancement of digital communication technologies, we are all operating on a global stage! We have access to highly talented and cost effective labour that we’ve never had before. The question is, are you accessing this to accelerate your business and empower your local teams? We’ve got no doubt that some of your competitors are.
Simply put, leveraging the power of an offshore workforce will assist you in growing your business, becoming more agile and flexible, scale up capacity more efficiently, and of course, realise actual cost savings. An offshore workforce can also make your business more competitive.
On average, if you compare total costs in Australia when engaging a staff member (including rent, electricity, support, wages, super, workers compensation, etc.) against the total cost of engaging someone in the Philippines, the likely savings could be more than 70%.
Remember that offshoring isn’t a new concept.
In fact, it’s been around for a very long time. We’ve just seen global barriers broken with the continued advancement of communications technology. The concept has already been proven and large companies like Deloitte and EY have demonstrated that a sound offshore strategy can help businesses grow and add value to their service offerings. This value can be seen via better client service, allowing local employees to focus on revenue generating activities.
We’ve got businesses leveraging the power of an individual offshore resource right through to large teams. Offshore talent is available to businesses of all shapes and sizes.
Need a graphic designer or digital marketer to take your business to the next level? We can connect you with talent that will help you achieve this.
Offshore employees are no longer the domain of large businesses. They’re also not limited to certain industries or sectors – all businesses need accounting, admin, finance, and marketing support – we can connect you with the resources you need.
Want to learn more now? Book your complimentary offshore readiness session!
It was not that long ago that the idea of offshoring roles within a law firm was completely unheard of, well at least in most Australian law firms. Equally unheard of would be the offshoring of knowledge management.
In recent times however, there has been a surge in the range of functions that are being successfully offshored or outsourced by law firms. These now include finance functions such as accounts payable and receivable and payroll, marketing functions such as database maintenance and development, graphic design and digital content production/dissemination and now, increasingly, parts of knowledge management.
You can find both high-quality precedent coders and workflow managers in the Philippines and if you take into consideration the abundance of Filipino legal graduates, you can start to comprehend the major opportunities and benefits in developing a large component of your knowledge management team offshore.
How offshoring benefits your law firm
With the increasing pressure in developing and successfully implementing more ways to cost effectively produce legal work, the importance of investing in a law firms’ knowledge management systems cannot be underestimated. The problem is that trying to increase investment in this function in Australia can be both expensive and difficult which ultimately leads to a lack of investment into a function that is a now a critical component in promoting growth. Firms that do not invest in innovative knowledge management systems will quickly find themselves left behind
The benefits of offshoring include the obvious cost savings but also go well beyond this.
The opportunities that can be offered by Australian employers to Filipino staff mean that it is possible, if your offshoring strategy is well executed, to achieve staff retention at levels well beyond those in Australia.
We at Diversify are ready to help you get started with an offshoring strategy for your business. Drop us a line today and see if your company is ready to take that next step in offshoring.
The business processing outsourcing (BPO) industry continues to grow rapidly. This growth has led countries in low-cost jurisdictions to focus heavily on developing their BPO capabilities. As a result of this, many countries across the globe have positioned themselves as high-value offshore service providers, with the Philippines regarded as a top offshoring destination in the world.
What do the experts say?
The recent AT Kearney’s Global Location Index places the Philippines as a top offshoring destination in the world, especially strong in financial attractiveness and people skills and ability. If we then look at this more granularly, particularly in regards to actual locations, consulting firm Tholon’s 2015 report on the top 100 outsourcing destinations placed Metro Manila in second place overall.
Looking at these results, it can be established that the Philippines is a high-quality offshoring destination, offering businesses the opportunity to develop and grow in an environment that is financially attractive with an exceptional talent pool to draw on.
How do I determine which area is suitable for me?
Selecting the right offshoring location is absolutely critical to achieving a successful outcome. As with any business decision, conducting your due diligence on each specific location is a must. Determining which part of the Philippines is right will come down to the specific goals and objectives of your business and then narrowing down the roles you are looking to offshore.
As relative examples, it is common knowledge that that San Francisco is the hub for software development and start-ups, Silicon Valley the epicentre for technology and IT and, as an Australian based example, Sydney’s dominance in the marketing and advertising space. This same principle is applicable to the Philippines as some areas are better known for delivering specific outcomes in particular industries than others. Some areas are far cheaper and some costlier, and some regions have better access to specific talent pools than its neighbour may have.
To determine which areas are suitable for your business to offshore, ask yourself:
- Do I need access to a highly skilled and motivated workforce?
- Am I looking to offshore roles where competition for candidates is fierce?
- Are the roles quite simple, easy and process driven?
- Do I want to set-up a call centre or voice operation?
- Is cost a major factor? The cheaper the better?
- Do I value employee engagement and cultural integration?
I have an idea, where to now?
Let’s refer back to Tholon’s 2015 Survey again. If we scroll down the list of locations you will see (as mentioned) that Manila is in the second spot. Unfortunately, the other offshoring locations in the Philippines do not fare so well:
- Cebu – 8th
- Davao City – 69th
- Santa Rosa, Laguna – 82nd
- Baquio City – 95th
- Metro Clark – 98th
There are a variety of reasons as to why selecting Manila as your offshoring destination in the Philippines is the smart option. The disparity in the above results stems down to the value and quality that Manila does offer over competitor regions.
A few of the key reasons include:
- It is the capital city of the Philippines where both large and small companies from other countries have established their businesses
- Metro Manila (NCR) is considered the nation’s gateway to the world.
- It is considered the pioneer of the BPO industry, making it a prime spot for outsourcing solutions.
- The latest technology is initially released here, so business owners who are planning to offshore can expect that information technology here is more aligned to global standards and it is up to date to deliver their requirements more efficiently.
- Access to a larger, higher quality talent pool
- Far better resources, infrastructure and technology
- Easy access for staff
Selection should be based on ideal outcomes
As an organization’s quality outcomes are reliant on quality processes and resources. The alternative locations available can be viable options if you are looking to implement an offshore solution that is totally centered on cost savings, or the offshoring of low skilled and high volume work. As an example, if your business is looking to roll out a large call center operation then it may be worthwhile considering Clarke or Cebu as your destination.
A recent BPAP report stated that: “the current outsourcing activity in the locations is small compared to that of Metro Manila. Stand-alone suppliers in these cities are low on service maturity, having to make do with employees who have no significant experience and insufficient infrastructure.”
If a business’ drivers towards an offshore implementation are cost, access to low-skilled, unsophisticated functions or setup of large voice accounts, then areas outside of Metro Manila should be considered.
However, if your business is looking to offshore key functions that require high-quality candidates with practical experience and a solid understanding of working with high-performance organisations, Metro Manila should be your top destination.
Diversify is a high quality provider of offshore staff solutions located in the heart of Manila. Our high class location, excellent facilities and focus on staff engagement have positioned us as one of the leading offshore service providers in the Philippines.
- Location is critical – make sure you choose a location that reflects your business objectives
- Different regions in the Philippines have different connotations – some bad, some good
- Manila is considered the premier offshoring location in the Philippines – it provides access to the best candidate pool
- Other regions may be cheaper – this is at the expense of service, employee engagement and ease of access
- If you are looking for a sophisticated multi-function offshoring implementation then Manila should be the only place you consider