Professional service firms – outsourcing and offshoring – opportunities for innovative new business models
Professional services firms in Australia have only recently identified the potential benefits that can be achieved by process outsourcing. Firms that have embarked upon the process outsourcing journey have encountered varied levels of success. The most common challenges that present themselves are related to quality or consistency of the work and services provided. This is often attributed to a lack of transparency around the staff delivering the work, as well as the inability to directly train or assist with the development of those staff members. These factors combined can sometimes produce disappointing outcomes.
Recently, another innovative concept for the implementation of low-cost offshore staff has become more common: “offshoring.”
So what is offshoring?
Offshoring is where an organisation utilises an intermediary who is based offshore and helps the organisation develop and implement an offshore workforce. The organisation has direct managerial control over their offshore employees (just like a regular local staff member) and they are involved in the selection and recruitment process.
Large American firms have undertaken the offshoring journey and have actually implemented their own back-office facilities in reduced cost locations, including the Philippines. In fact, one large American firm has an offshore workforce of almost 1,000 employees in Manila who provide support services to their global offices.
This offshore workforce does not comprise of, for example, lawyers (not at the moment at least, but it is a future possibility) but rather the support services that are a critical component to any successful law firm. The functions offshored include business support functions such as finance, marketing, information technology, recruitment and human resources (to name a few).
Obviously, the cost benefits are substantial as the average wage costs in the Philippines are less than 20% of those in Australia.
An offshore/outsourced workforce solution is not just for large firms and you do not need to establish your own facility overseas to implement. There are expert service providers who will look after the entire process for you.
An Experience Service Provider will work collaboratively with you to tailor a strategy that meets the needs of your professional service firm and then work to implement this strategy. Implementation includes developing a timetable for the functions to be offshored through to the recruitment of your offshore staff. Your experienced service provider will also host your offshore team in a modern office and will provide all the support services required, including IT, HR, Operations and Training.
The rapid advancement and development of information technology, internet speeds and cloud-based solutions have enabled remote staff to work in the same manner as locally based employees who opt to work from home. Locally based remote working solutions are no different from utilising an offshore resource in Manila. This shift to an almost borderless office has provided innovative professional services firms with an opportunity to re-evaluate how their business models work. Implementing an effective offshore solution will significantly reduce fixed platform costs.
It is time for professional services firms to reevaluate their existing business models and contemplate how they will remain relevant as competition in the professional services market continues to grow. Considering an offshore solution must be on the agenda as it is increasingly likely that firms of the future will be completely different to those today.