Diversify CEO shares insights for offshoring success at Macquarie Bank client seminar
Speaking at a recent Macquarie Bank seminar on offshoring, Diversify CEO Angela Vidler said many organisations fail at their first attempt at offshoring because they treat it like outsourcing.
“Outsourcing traditionally has minimal client involvement in the recruitment process – you give an external provider a set output and they are meant to provide it,” Vidler said.
“The offshoring model is usually much more affordable than an outsourcing model, and the way we work is the client engages us as an intermediary. We help the client recruit and engage staff in the Philippines but the client has the ultimate control over what work they do.”
She said offshoring, unlike outsourcing, also met all of Australia’s privacy principles.
The impact of offshoring
Angela said the knowledge of offshoring within Australia’s professional services sector had increased dramatically within the past three years.
“Research indicates that around 40% of the top law firms are offshoring, and adoption is rapidly growing in the mid-tier market, up from 22% five years ago to 30% of mid tier firms,” she said.
“Ernst & Young has successfully trialled offshoring virtual assistants for up to 20 partners, and Deloitte has more than 27,000 offshore staff globally. This is at the big end of professional services, but smaller firms wanting to grow are increasingly realising the benefits of offshoring.”
Vidler was one of four key speakers at the Macquarie Bank seminar:
David Goener of Beaton talked about the rise of new business models within the legal and accounting sectors and the need for change if firms are to survive.
One of the originators of offshoring in Australia, Tom Grealy, urged professional services firms to look beyond cost, to pinpoint what new or superior capability they aspired to so they could re-invest in building that capability.
Jamie Beresford, managing director of Ready Offshore, highlighted the importance of training and cyber security initiatives such as location lockdown.
What makes offshoring successful
Vidler said some of the key factors that determine the success of any offshoring initiative include:
- It has to be about more than cost-cutting. “Off-shoring that succeeds is where the client sees it as a key way to grow their business. In fact, in the set-up stage clients will find costs go up, but once systems and processes are in place our clients sometimes see more than 70% in cost savings,” she said.
- Be prepared, and get buy-in from your on-shore staff. “Not doing this is the number one reason for failure. Having local engagement is key to success – make sure you have someone who truly believes in offshoring managing the process and the offshore employees, and tie this to their KPIs,” Vidler said.
- Off-shoring has to fit into your overall business strategy and you need to find the right model for your business.
- When looking at roles to off-shore, start with internal-facing people within the business. It’s vital to start with a pilot project to iron out processes and incorporate learnings before you roll out across the business.
Angela Vidler is CEO of Diversify, a national offshore solutions specialist that works with large and small listed and private companies to help grow their businesses by establishing tailored offshore teams. With offices in Australia and the Philippines, Diversify helps businesses identify and solve their unique problems, by nurturing and fostering high quality, high performance teams. www.diversifyoss.com