Today, outsourcing is a widely used practice for organizations striving to improve their productivity and reduce costs. Having left doubts “if we should do it at all?” in the past, now they have to choose from a wide range of outsourcing destinations that exist and keep appearing on the global market to understand where their outsourcing best match is located.
Frank Casale, CEO and chairman of the Outsourcing Institute, gave an interview where he commented on how outsourcing has changed since its early days, and the factors that should be considered when outsourcing offshore.
In the early 90s most of the outsourcing was big deals with big companies that were in big trouble. And it was mostly U.S. Nowadays there are tons of outsourcing being done in the mid market and smaller firms.
Moreover, as Mr. Casale notes, there is a certain shift to back end of the transaction and even post contract signing. “Managers are realizing that the work begins after the contract is signed and it’s really all about governance and relationship management”, he says.
When companies have already decided to outsource, they have another challenge to face - where to outsource and whether to go offshore or not? Here are some tips suggested by the OI’s chairman.
- Bring in an advisor or just be very active within whatever networks you participate; another option is to do some research. “This will give you a sense of where you can find high value, high cost savings, and low risk options,” Mr Casale says.
- When choosing an offshore destination it’s necessary to determine the factors that are crucial for you and then to weight those factors: time zones, cultural compatibility, language, cost. You no longer have to go necessarily to India - there are alternatives like Eastern Europe or Latin America. Not only do you have cost savings there, but its closer proximity, less of a time zone issue, and a place more people are attracted to going every couple of months on a site visit.
- Don’t “put your eggs all in one basket. Most organizations are doing some things in India, some things in South America, and some things onshore”. If something goes wrong with one of your providers, then you have some other to rely on.
Source: blog.devongroup.com
Frank Casale, CEO and chairman of the Outsourcing Institute, gave an interview where he commented on how outsourcing has changed since its early days, and the factors that should be considered when outsourcing offshore.
In the early 90s most of the outsourcing was big deals with big companies that were in big trouble. And it was mostly U.S. Nowadays there are tons of outsourcing being done in the mid market and smaller firms.
Moreover, as Mr. Casale notes, there is a certain shift to back end of the transaction and even post contract signing. “Managers are realizing that the work begins after the contract is signed and it’s really all about governance and relationship management”, he says.
When companies have already decided to outsource, they have another challenge to face - where to outsource and whether to go offshore or not? Here are some tips suggested by the OI’s chairman.
- Bring in an advisor or just be very active within whatever networks you participate; another option is to do some research. “This will give you a sense of where you can find high value, high cost savings, and low risk options,” Mr Casale says.
- When choosing an offshore destination it’s necessary to determine the factors that are crucial for you and then to weight those factors: time zones, cultural compatibility, language, cost. You no longer have to go necessarily to India - there are alternatives like Eastern Europe or Latin America. Not only do you have cost savings there, but its closer proximity, less of a time zone issue, and a place more people are attracted to going every couple of months on a site visit.
- Don’t “put your eggs all in one basket. Most organizations are doing some things in India, some things in South America, and some things onshore”. If something goes wrong with one of your providers, then you have some other to rely on.
Source: blog.devongroup.com
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