07 Dec 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.
However, the CEO, who wasn’t in those conversations, later declared to the CFO “why haven’t you started offshoring yet? We already agreed to find out whether it will work – choose a provider and get started!”
This highlights the unconscious incompetence problem: the CEO believes that the DECISION to begin will determine success or failure – it will either work for us or it wont. He’s turned the only realistic opportunity they have to double their profit into a crap shoot.
The reality is that we have clients in the same industry who have absolutely nailed it, but I also know of others in that industry who got a terrible result – they burned over $150k and then shut it down.
Any fool can start a game, but it takes a master of the game to win. Whether you succeed the first time with offshoring, has everything to do with HOW you implement. Choosing the right model is important, a good provider is important, hiring good staff is important, retention, process, culture, communication, management, internal alignment are ALL important.
Each area is not complex, and almost any business can do it well, but ignorance is a powerful enemy. Once your offshoring starts to get a sideways momentum, your local team (or clients) will declare offshoring is terrible, and then it’s extremely difficult to turn that around.
If “get started” is the extent of your offshoring strategy so far, then get some help from experts in your industry. Plan to succeed! If that sounds like hard work just go ahead and flip the coin.
Scott Linden Jones is the founder of consulting firm Easy Offshore, which assists businesses with offshoring and outsourcing, from startups through to publically listed companies.