09 Dec How to avoid Bob ruining your offshore team
I’ve been exploring the offshoring / outsourcing / BPO industry since about 2009. In that time I have done extensive research on the industry and its evolution, spoken to hundreds of businesses owners and managers about their offshoring experiences in The Philippines, published a book about the global labour trends, and lost count of the number of BPO / staffing facilities I have inspected and reviewed.
This industry is fast becoming the new boom industry for the 2010 decade ahead, and like the “dot com” boom era, there’s an increasing amount of hype, a lot of doomed ideas, and a lot of mist obscuring the worthwhile paths.
We have assembled a short but powerful list of top-shelf providers, which we regularly review and update to ensure it stays top shelf. It’s unapologetically difficult to get onto the list because having high standards helps our clients succeed.
Selecting a great provider is extremely important, but unfortunately the vast majority of staffing and outsourcing providers that I have seen vary between poor and terrible. They usually have great intentions, but great intentions won’t make me or you feel better if your offshore team doesn’t work out for you.
Today I noticed yet another future-doomed provider has gotten started. Actually it was a fellow (lets call him Bob), who looked at some of Easy Offshore’s educational content a while back, and then decided he liked the look of the opportunity enough to have a crack at setting up a facility. They give business and accounting advice in Australia and are probably quite good at it, so their clients trust them.
However, when it comes to offshoring, they have a short history punctuated by distinct failures. They couldn’t manage to run a team successfully for their own business, despite two years of trying. Couldn’t find a good facility, couldn’t find good people, couldn’t retain good people, had no idea what to pay, didn’t understand the culture… Their attempts were almost like my checklist for what to never do. Bless Bob’s entrepreneurial spirit for experimenting in his own business; I’m not critical of that at all.
The unfortunate thing is that now he will be experimenting in YOUR business while you pay him to learn.
I’ve worked with a few facilities on refining their offering and processes – when I could see that they have a real shot of having a brilliant facility. I’m fairly certain that Bob doesn’t have a clue, however he does have a client base to market to, and sales solves all problems so they say.
Bob had some epiphanies when he saw some of our Offshoring Master Class content many months ago, but it’s still a LONG journey from a theoretical understanding of some principles of outsourcing, to get to the point of successfully giving others advice and implementing teams for other businesses.
Nevertheless, Bob has now set up his own BPO, with a cute website claiming they can do all things for all people and make Australian businesses more profitable. He has made the mistake that so many make, and just assumed that all you have to do is recruit a bunch of people and stick them in an office and introduce them to their new employer in Australia, then start sending out client invoices.
And so this is what you are up against when you go looking for a provider. There are hundreds and soon thousands of providers like Bob who really don’t have a clue what they are doing. Some of them will be people that you already trust to deliver you other services, so it seems OK to trust them.
But running a great BPO or staffing facility is actually a very complicated game, despite looking simple to those who don’t dig deep enough. It is extremely different to doing business in Australia, and takes a lot of hard knocks to get right. Very few will ever get it right. Most stagnate with a small number of staff and continually churn their clients.
What I look for in a facility includes:
Will the facility and it’s local management understand the Australian perspective on productivity? How do they deliver discipline effectively despite cultural conflicts? (How likely are your offshore staff to understand that one hour of your customer’s time might cost the same as three days of the remote staff member’s time? Slow service is infuriating to us, but just part of normal life in other places.)
How do they deal with the critical importance of family? Does the facility offer any cultural integration (“Australianising”) to new staff? How about the other way round – teaching your Australian team about how Filipinos are different?
Management / Owners:
Have the owners ever built a business to any significant scale before? What do they know about doing business in Philippines and Australia? How many years of experience do they with offshoring and outsourcing? How complicated have their previous businesses been? Is their any evidence of experience at educating customers within an emerging market? Are they leveraging their industry experience or trying to be all things to all people?
What are the managers like? Are they of the quality and experience that the facility can “grow into” their skills, or are they already at the limits of their knowledge?
How systemised is the business? How good is their onboarding process? What kind of ongoing interface do they have with the client (ie account management), and what do they have in place to ensure the effectiveness of the account management? What plans do they have for adding new layers of management as the business grows? What quality checking systems will be added at what stages of growth? What feedback loops do they have so they catch when their service is going downhill?
Technology is what bolts your offshore team into your Australian business.
Do they have a good IT team? What are their SLA, ticketing and escalation procedures? How experienced is the senior engineer / CIO? How much are they spending on Internet, and what redundancy is in place? (Internet is very expensive in Philippines, so it is often neglected but it impacts your staff productivity every minute of every day). What systems do they have in place for controlling bandwidth, blocking sites and prioritising traffic? How do they minimise the impacts that one client can have on the other clients in a shared facility?
How fussy are they with candidates? What industry knowledge do they have in the recruitment team? (For example, how do they know a good quantity surveyor from a poor one?) Do they have a history of success with certain industries and/or specific roles? Will they run client-requested processes? How much do they recycle former staff into new accounts, and what filtering is used to remove the low quality staff? How detailed is their induction procedure, and how does it help the recruit assimilate into the client’s business? How do they help with retention?
All of these things make a big difference to what your experience is going to be like when you set up an offshore team within a staffing facility or an outsourcing facility.
Please do your best to avoid Bob because folks like him increase your chance of failure dramatically. Maybe he will prove me wrong, but best he doesn’t learn what he needs to learn at your expense, right?
Do not assume that the pretty website or the happy client testimonial means that you have chosen a good facility. Even if the initial months are good, the service level will deteriorate if the above factors are not considered. Very few facilities are built to be able to scale, so as they get bigger, they invariably get worse. Although I am realistic that no business is perfect, I think 90% of the offshoring providers have major faults. Certainly there there is no downside to taking a conservative and methodical approach of whittling down to the top 10%.
Our last offshoring Strategy Tour of the year is on next week. So take 3 days off work since it’s getting quiet, and come with me to learn how to do it right the first time. Learn what your competitors are doing offshore. Learn how to improve your margin, while also improving your customer service. http://wired.ivvy.com/event/CGYXA3/
This tour we are running the Offshoring Master Class in Manila the evening before the tour, so you’ll get a $390 bonus and get our “blueprint” at no cost .
Plus if you message me and mention you’re a friend from Linked who read this article, you’ll get a further 15% off the tour price. Two spots remaining only.