The Blog


The exact strategy for successful offshoring

Offshoring or “multi-shoring” of office-base roles has become a hot topic for good reason. Never before in the history of commerce has there been a way to massively increase profit, and at the same time substantially improve services. 

Yet many businesses fail to hit their expectations, getting only minor benefits or none at all. Why?  The answer always lies in the strategy they took with offshoring. In most cases those who get poor results have no strategy at all – they just try something they heard at a conference or somewhere.  With no proper direction or guidance, they drift from mistake to mistake. 

Bearing in mind that every 5 roles placed in the Philippines adds at least $200,000 per year to the bottom line, it pays big dividends to invest a bit of time and money to make sure you do it properly.  

Unfortunately, too many approaches suggest it is simple to excel offshore – just pick a provider, put cheap bums on seats, and Voila! You’ve magically saved 90% of your costs.    

This is absolute nonsense; it’s a sales pitch – no one succeeds that way. It takes work and planning to adapt your business to properly leverage offshoring. A good strategy means less work.   

A lot of businesses dabble fearfully at the edge of global-resourcing, not fully appreciating how their establishment will change and improve over a 3-5 year period if global-resourcing is correctly implemented.  With no long term vision, they think only as far as the first few roles.  

Vision comes from experience, and savvy businesses engage external experience when they do not have it internally.  With the benefit of experience, you can understand exactly what value your business can derive from offshoring and factor that intelligence into your broader planning. 

Some of your competitors are already well into their initial 5-year offshoring plan. Some of those are growing exponentially, some are moving into cash-flow funded acquisitions – all because they constructed a solid strategy and executed it properly. 

Others are still stumbling around, lurching from one problem to the next.  It’s really just a choice.  

Read more: The exact strategy for successful offshoring


No Detailed Strategy? The Offshore Outsourcing Crap Shoot.

I’ve written before about the rapidly increasing popularity with offshoring white-collar roles and the equally stunning 50% failure rate.  For every Australian or New Zealand business which gets a cost saving or a capacity increase through using staff in places like the Philippines, another business gets a terrible result. Which outcome will you have?

You tell me your STRATEGY and I’ll tell you which outcome you’ll get.
Most CEOs and directors can’t even answer the question about their strategy. They stumble from problem to problem until they either give up in frustration, or run out of problems. Their strategy is actually “trial and error”. 

This is what is known as “unconscious incompetence” – they do not know enough to realise that they are simply flipping a coin against a 50% failure rate. Oops, tails, we lose.

Visiting another country, talking to friends, reading opinions online and then picking a provider is NOT a strategy.
The problem was highlighted further when we were recently speaking to a potential client about the failure rates and reasons in their particular industry, and showing them how our strategy consulting removed 27 different common failure points in their industry.

Read more: No Detailed Strategy? The Offshore Outsourcing Crap Shoot.


Slave Wages versus Cost of Living

While catching a taxi home from the airport yesterday it occurred to me that it cost me the same amount for a 40 minute cab ride in Manila as it cost to simply get INTO a Brisbane taxi and close the door.

We tend to think of places like the Philippines as having really cheap wages. On average, a permanent salaried team there costs about one fifth of the same skillsets in Australia, when hiring top talent. 

The media sometimes likes to portray this as "slave wages" since it makes for appealing headlines, but those who refuse the nonsense rhetoric and scratch a little deeper find the opposite to be true: we have a serious cost of living problem in Australia.

Australia's high cost of living does more to create that huge wage difference than any other factor. In major cities in the Philippines you can rent a modern 2 bedroom "townhouse" for around $65 per week.  You'll get a can of 'Fanta' for around 20 cents, and fuel is around 25% less than Australia too.

With the cost of living in the Philippines so much cheaper than Australia, it makes complete sense that wages are also a lot less.

If you want your business to be a next generation business which leverages the global skills marketplace to produce a stronger and more efficient business, then perhaps you should invest some time to learn more about ethical offshore teams, and how to integrate such a team.

Come and see if for yourself on a Philippines outsourcing / offshoring strategy tour.  Or get our consultants to visit you in your office and run a workshop.




The critically-acclaimed book describing how outsourcing and offshoring will impact your Australian business

Why is global resourcing on an exponential growth curve?

What kinds of roles are being done offshore?

What evidence is there that this will impact both small and large businesses?

What are the ethical considerations – does offshoring mean “slave labour”?

How has the offshore outsourcing concept evolved in the last ten years to fit all business sizes and industries?

Download the first 3 chapters for free here: View PDF

Read more: The critically-acclaimed book describing how outsourcing and offshoring will impact your...


Beware the barriers for employers

Surely this is ridiculous - recently reported by CCIQ an employer tries to do the right thing to protect female employees harassed at a work function by a "boorish, drunk" manager, whom they fired for his behaviour. 

The Fair Work Commission rules that it was the employer's responsibility to stop the employee getting drunk and that they should not have fired him.  He will now likely be compensated by the employer for losing his job! 

Why do we reward this kind of behaviour in Australia?  Why do we force these penalties upon employers in situations when they are trying their best to value and protect staff?  Why is there a continued decline of self-responsibility, where the minority of idiots are allowed to ruin it for everyone? 

Read more: Beware the barriers for employers