Common Concerns When Offshoring and How to Fix Them – Part 2
Following the obstacles in part 1, here are 4 more difficult scenarios that may stand in the way of your offshoring journey.
Scenario 5: Even when I choose a service provider, their contract terms confuse me. How could I pick a prestigious business partner?
It is because some service providers deliberately make the contract vague, tempting and short-term at first glance. Once you sign the contract, they can easily charge you many hidden costs or offer you unnecessary, additional services. All they care about is their own revenue, rather than helping you build your successful offshore teams.
Possible Solution: The most importance advice is: do not sign any short-term contract because offshoring itself takes time to develop and bring benefit. There are 4 factors in choosing an offshore service provider, and you need to take them into consideration. Choosing a suitable partner plays a big role in your offshoring success.
Scenario 06: We are not used to managing projects across many countries. The tasks are duplicated sometimes, and the communication is disastrous.
Managing projects across two or three countries is a real challenge. Your teams work in different time zones and miscommunication happens any time. Popular issues range from task duplication, unclear instruction to missing deadlines and lack of quality control.
Possible Solution: This shouldn’t be a problem if you know how to make use of technologies for project management. Cloud-based platform is a perfect answer that overshadows differences in time zone, work location and productivity. Your teams not only have a place where they can discuss and share instantly, but they can also store files for future references. Consider one practical option? Make sure to check out these 5 tools to help you connect with your offshore teams.
Scenario 7: First, the practice seemed to be cost-saving but there were additional costs. Therefore, my company paid more money for the offshore teams than anticipated.
Cost-saving and global labour arbitrage stand in the centre of nearly all offshoring practices. However, you need to set realistic goals and not to be misled by major savings. Additional costs in offshoring comprise of, but not limited to: wage inflation, overtime if approved by the client, specific hardware/software required by the client, bonus to offshore staff (monetary or non-monetary), travel expenses (if required).
Possible Solution: Additional costs will always be there in your offshoring journey. That’s why you can only try your best to plan ahead. Detailed, strategic planning right from the first days helps a lot in preventing additional costs because your transition, procedure and outcomes have been well-planned and put into practice immediately. Finally, remember that your offshoring success does not come solely from cost-savings but a combination of many beneficial factors, such as: division of labour, talent pools, unique offerings etc.
Scenario 8: I’m concerned about data security and intellectual protection. Rumour has it that offshoring is vulnerable to cyber threats.
In the past, there have been cases when offshore staff stole their company’s documents after resigning and that fact bars multinationals from delegating important, core functions out of their head offices. Security threats raise objections from customers themselves in fear of losing their personal information.
Possible Solution: Luckily, the landscape has been improved drastically in recent years with governments tackling high-tech crimes and facilitating investors with regulations. As a foreign company, you need to take advantage of new infrastructure in the destination countries and establish safety procedures, both virtual and onsite, to actively protect your data. Should you choose to do business with a service provider, enquire if they have enough capabilities to reach global security standard and clarify any responsibilities when they fail to comply with your requirement.
Of course, the number and variety of concerns popping up during your offshoring journey is not fixed. Apart from these 8 concerns, if you have any other concerns, feel free to contact us at ASW Global for further assistance. With more than 5 years’ experience helping Australian companies building their talented teams in ASEAN countries, we are confident to guide you through the whole offshoring process and reach your expected outcomes.