A Lifebuoy for your Business to Stay Afloat
Global economy is facing a huge crisis in post COVID-19 world creating a lot of challenges for businesses of every sector all around the world. With no safe harbor at sight, many businesses are struggling to stay afloat in any way or other. Offshore outsourcing in this time has come to the rescue of these owners.
In periods of extreme economic turmoil, companies tend to turn their attention to its largest expense- people as automatic survival reflex, which too, doesn’t position the business for growth even after the storm is tamed. For companies struggling to stay afloat, business process outsourcing comes to the rescue.
Process Business Operations Overseas: Introducing Offshore Outsourcing
Offshore outsourcing is the process of outsourcing your business operations from a vendor staying overseas. It has become extremely important globally as this process helps in the growth of businesses. The rapid shifting in markets is making the management review and establish its core competencies which brought the management to the state of complexity and disruption. With plenty of time to evaluate the minutest nuances of retaining processes and associated implications most companies are incorporating their business processes to offshore outsourcing as part of a thoughtful process to grow.
- Offshore outsourcing is subcontracting business operations to a third-party overseas vendor.
- It is a global process that helps in the growth of businesses with expert helps.
- It’s a cost-efficient way to maintain complexity and interruption free management and helps to focus on the core operations.
|According to Statistica, revenue in the BPO sector is expected to reach around US$276.1 million in 2020 with an expected annual growth rate of 6.7% by the year 2025.
Ref: Statista Research Department
Appropriate Situations to Incorporate Offshore Strategies
There are two major situations when incorporating offshore strategies is appropriate and handy for cost management. These are explained below:
- In the cases where there are well defined requirements, mature and stable base and low number of changes, offshore outsourcing is appropriate for performance maintenance.
- If the business is located in a country with inconsistent weather and political situation, offshoring the business processes to a country with more stable situation is an option.
- When the core business operations need more focus to enhance or continue its growth.
Inappropriate Situations to Offshore
Though offshoring business operations is a handy solution to get the services done, there are some situations when offshoring the process is out of question. Explained are the situations below:
- If you are a start-up or an organization with new product development
- If it is a complex procedure and multiple teams are involved
- If the project needs the core competency of the company
- If the project needs the intellectual properties owned by the company
- If it’s a crash project to get something else done.
- If you need to gain immediate cost savings.
6 Offshore BPO Sectors to Your Rescue
Offshore outsourcing is a wide industry, mainly providing their services to the following sectors:
- Knowledge Process Outsourcing (KPO): KPO refers to information-based tasks that focuses on data-driven core operations that needs business insights. KPOs cover the grounds better than in-house employees as they’re skilled in that particular area.
- Finance and Accounting Outsourcing (FAO): FAO offers expert services on accounting ranging from bookkeeping to taxation. They automate business functions with cloud finance as well and make your business operations efficient.
- Research and Development (R&D): Business decisions need careful analysis to innovate their industries and make good business calls and the process can be outsourced to R&D providers. Adding research will add more value to the business by increasing scalability and help the owner in finding market gaps they can profit from.
- Data Analysis: With expert analysts, offshore outsourcing teams mine and analyze vast volumes of data to convert raw data and interpret them with quite efficiency.
- Customer Support: Customer support provided by BPOs include a wide range of services including call center services for both inbound and outbound calls.
- Sales and Marketing: outsourcing sales and marketing process can be a strategic move for a company, as with the potential customers, offshore BPOs use the client’s native language to communicate.
Make Effective Decision
Firstly, the offshoring project should start by identify the reason of outsourcing, whether it’s to minimize costs or to maximize the flexibility. Secondly, identifying the core and non-core activities of the company since mostly non-core activities are outsourced allowing the management to focus on the core activities. Follow a decision model using bi-objective goal programming model, considering benefit-related and cost-related objectives.
Offshoring Is Advantageous
Since the trend of outsourcing has continued to grow over the decades, offshore outsourcing has become a viable way to remain competitive in the global environment as well as reaping the best results. Some advantages why you should go for offshore outsourcing is described below:
- Outside Business Outsourcing: The management team of will save you the time of hiring and training your team with dedication to your business and to achieve excellence in productivity level. They have-
Excellent work ethics, are skilled, are globally competitive
- Cost Reduction up to 80%: They will understand your needs, goals and refine the process to ultimately save the time and cost of the customer. They also create system model and flow chart to improve company operations and customer services using some innovative techniques like-
Reliable optimized sourcing, focused operational excellence, tailored operating model integration, measurable sales and services optimization etc.
- Increase Productivity: With offshore business solution services, immediate increase in productivity can be seen in different levels.
- Focus on the Core: Offshoring allows an owner to concentrate on the core activities of the business by controlling everyday offshore works, satisfying customer service needs and improving customer loyalty.
- Cater to Changed Demands: Offshore vendors provide flexible and scalable services by-
adjusting to company priorities, increase or decrease capacity basing on current needs, supporting company acquisitions, consolidations and joint ventures.
Know the 7 Barriers, Learn to Overcome
Offshore outsourcing though comes handy for many a reason, there are some barriers that come along. These barriers are to overcome before deciding to offshore a service. Explained below:
- Time Zone Difference: While offshore outsourcing, it is natural that the time zone will vary from one country to another establishing a barrier for both the vendor and the customer. As a result, teams working from different time zones face delays in communication, deliverables or simply put, gets tough for them to manage everything in accordance of time.
To manage the disorientation, it’s important to share some common hours between in-house party and the offshore team. Another way can be managing the different hours to enhance productivity.
- Cultural and Language Barriers: most naturally, there will remain language and cultural differences between the offshore service provider and the customer. This affects everything between them starting from holiday calendar to everyday communication.
To manage the existing differences, Both the parties should design policies to reflect inner diversity, train the management to understand the gap and bridge it.
- Quality Control Issues: Offshore outsourcing might not match the expectations as production conditions and regulations differ from country to country. Local breaks and delays can also impact the end delivery.
To manage the issues of quality control, the vendor should be consisted of a team that understands the local, administration, regulations, business practices etc. before completing the setup and then design the business process to ensure quality and timely delivery.
- Security and intellectual Property Issues: Outsourcing any business process puts the company at risk of security breach or sometimes, theft of intellectual properties is not uncommon as well. Moreover, the data policies existing in the country of the vendor can leave the business vulnerable to breach.
To overcome this barrier, the customer should ensure no violation of the existing rules from their end, especially while offshoring information, no violation of domestic laws can be tolerated. Proper paperwork for setting IP and consultation of any efficient advisor to understand the rules and laws is primary necessity.
- Payrolling and Compliance Issues: Offshoring increases paperwork and hidden costs as it involves two parallel systems for payrolling and compliance. It also increases the chances of incurring fines and may affect the productivity of the company.
To manage this situation, you can use cloud finance which will lessen paperwork and will be more time and cost efficient.
- Lack of Control: Since the partners stay far from one another, it is implied that the owner will have very little control over the process and strategies about the business. Losing track of important issues is another risk that comes along.
to mitigate the risk, sharing common hours and a fast communication is the key.
- Operational challenge: Most companies face operational challenges as there is distance between the vendor and customers, which, being combined with time and language differences becomes a huge management challenge. This grows to lack of transparency, scheduling problems, employee performance reduction etc.
To handle this all through, leveraging the proper technology and productivity management apps, the vendor and the customer both can lessen the risks and handle their tasks from their parts. The customer can get detailed productivity reports, maintain logs, track every working hour, integrate payrolling and monitor offshore team with ease.
Let’s Tell a Tale
We, CCBD, came to work with a customer whose company was based in Malaysia and was listed by MLSTF. They came to us knowing that we provide offshore call services.
Their company is a medium company who ships accessories, and they have a huge customer base all around Asia. They have to maintain a stable communication with their customers, but do not have the expertise and set up to do so. Moreover, they did not have strong marketing service base.
CCBD worked out a team based in Malaysia, with expert team of customer service management who are pro at their job, and understand the local language very well. So, they need not to focus on overcoming barriers, and could concentrate on the tasks given.
The initial program was designed to answer the inbound calls only, as a trial. After three months, we established another setup for outbound calls with an expert team of marketing and sales. They managed to attract newer customers for the company and we have a long-term contract signed.
The customer remarked that the service they were provided with was extremely successful and for them, cost-efficient.
In this era of digitization and globalization, it is nothing much of a wonder to have every available services around. But it’s tough to find a right vendor to get that service done. Offshoring opens the door for that search. Despite some disadvantages, offshoring can help with the growth of your business. CCBD is here to avail every possible service for you with minimum cost and maximum efficiency. If you want to know more after reading the case study above, you are most welcome for the experience.