Deciding the right offshoring destination
From silicon valleys of India to turquoise beaches in Seychelles, the outsourcing and offshoring industry has evolved into a global sector with centres spreading all over the world. This expansion means more companies will have a hard time when it comes to deciding their offshoring destination for business operations.
However, this can be easily overcome when filtering through factors to consider when it comes to your ideal offshoring destination. Here, we’ve shortlisted 6 main criteria when deciding the right offshoring destination for your business.
1. Business strategy
One common point of many offshoring best practices is how market leaders choose a destination that fit their business strategies. Requirements of your business strategy should always be the first consideration to ensure you build your global team in the right place. For example, if your company wants to delegate call centre functions, Filipinos will stand out with their experience as well as language fluency.
2. Large talent pool
The second criterion is the qualified talent pool in the host country, and how well your local teams can get along with them. A perfect destination allows you to tap into abundant skilled workforce who can handle all delegated tasks in a professional manner. They can also communicate efficiently in your language or common lingua franca like English. More importantly, no matter where you go offshore, your teams must be willing to narrow the cultural gaps and collaborate as a unified company.
3. Geopolitical stability
As offshoring is a long-term strategy, you will want to find a destination with geopolitical stability to build your talented teams. This aspect can be judged directly by the governments system and how they react towards offshoring industry. How has the current government performed so far? What are their reputations in regional and global stages? Does this government support or dissuade offshoring practices? If there is a new government elected, will it affect your offshoring operation?
4. Legal maturity
Each country has its own legal and constitutional system. You will need to seek consultancy about labour laws, tax incentives and other regulations regarding foreign business entities. The good news is: more and more countries have leaped forward in legal maturity to compete and attract foreign investors to their appealing economies. Countries like Vietnam, Indonesia and Brazil have tried their best to combat bureaucracy, fix loopholes and legal complications – all to an inch closer to global legal standards.
5. Data security and protection
Legal maturity, data security, and protection are three main important roles in deciding your next offshoring destination, especially in building IT or financial teams. The destination country should be able to apply your data security protocols, whether they are simple requirements such as: no employee is allowed to bring documents out of the office or extract sensitive data from their computers.
6. Technological infrastructure
Lastly, go offshore in countries with developed technological infrastructure to sustain smooth communication between your local and distributed teams. Many destinations claim to have stable internet connection and bandwidth, but you must be aware with their definition of “stable”. You need your teams to collaborate swiftly and thoroughly as if they were sitting in the same office. Be sure to enquire about common systems, technologies and infrastructure in your destination of choice.
If you are still wondering about choosing a perfect destination for your offshore teams, AS White Global is here to further assist you in sorting out these issues. We are an Australia-based, trustworthy and experienced offshore solutions provider with years of operation in ASEAN countries.