Top Ten Reasons Why Outsourcing / Offshoring Fails - Easy Offshore
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Top Ten Reasons Why Outsourcing / Offshoring Fails

24 Jan Top Ten Reasons Why Outsourcing / Offshoring Fails

Posted at 05:28h in Articles by

WHETHER YOUR AUSTRALIAN BUSINESS IS JUST STARTING TO EXPLORE THE CONCEPT OF HAVING “WHITE-COLLAR” TASKS DONE OUTSIDE OF AUSTRALIA, OR YOU HAVE BEEN EXPERIMENTING FOR SOME TIME, YOU MAY HAVE NOTICED THAT IT’S NOT ALWAYS EASY TIMES AND HUGE SAVINGS WHEN IT COMES TO OFFSHORING.  YET WHEN DONE WELL, THE COMMERCIAL ADVANTAGES ARE HUGE.

But my research indicates that as many of HALF the businesses doing work offshore end up with a poor result, poor productivity, or just outright failure. Why?  Not many people talk about this, for a few reasons.

Firstly, most people don’t realise. If your offshore project floundered, then its easy to make assumptions about why, such as “our business just isn’t right for offshoring”, or “the providers cant do what they say they can do”.

Secondly, if you’re already feeling disappointed that the project or roles failed, then you aren’t likely to go around telling people about the detail, and therefore finding out that a lot of other people have the same experience.

Thirdly, those who succeed also rarely talk about it (at the time of writing), because they have a huge commercial advantage, and thus an incentive to keep their mouths shut so their competitors don’t find out.

So as I have pointed out before, there is a growing divide between those who succeed in implementing a global-resourcing strategy, and those who do not.  Encouragingly, we are seeing more people in our workshops who have failed once, and are now looking for the reasons why, and prepared to try again.

Straight from the Easy Offshore Workshops that show exactly how to get it right, are the top ten reasons why offshore strategies fail.  Our workshops have answers for all of these issues, and our offshore guided tour shows you practical examples and quality providers.

TOP TEN REASONS WHY OUTSOURCING / OFFSHORING FAILS

  1. Choosing the wrong model for housing your team .
  2. Choosing the wrong providers for staff leasing, office provision, legal, accounting, web, IT etc. 
  3. Inadequate recruitment processes (or relying on facilities who have inadequate processes) .
  4. Poor salary packaging and/or lack of transparency as to what staff are actually getting paid .
  5. Paying too much (wasting money) or paying too little (retention problems).
  6. Lack of cultural and local factor understanding with management practices.
  7. Failing to do the internal sell properly with the Australian team, causing key detractors, 
    • motivations to see the strategy fail, and fear of job losses affecting productivity. 
  8. Having no plan for integrating another location 
    • (eg, same problems if it was a Sydney business with a new office in Tasmania).
  9. Going too FAST with execution – eg hiring 20 people immediately without proper process / training.
  10. Expecting some kind of “Magic Manila Sauce”.  Not using sensible business logic about what will and wont work. 
    • Or not treating the offshore team like the Australian team. Eg, no documentation, no training, poor communication.

Getting the right advice up front can save a lot of hassle, wastage, and disappointment later.