How to Minimise the Risks of Offshoring

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You’ve probably heard the stories. A friend hired a software developer in another country, and the guy didn't deliver. A company on the other side of the world promised you 100 articles a day, but you ended up having to correct the grammar.

In such situations, you asked for a product, waited for it to be made, and saw the result. You had little control over the production or process, received inconsistent updates if any, and rarely or never talked with the person creating the product or performing the task.

Yet you don’t want to give up offshoring. It’s cheaper by at least half of what you’d pay in your own country.

So what can you do? You can open a subsidiary in a cheaper country. But you know you won’t, because you don’t need to, you can’t afford it, or it’s just not worth navigating the regulatory maze you usually find in places with lower wages.

Is there a middle ground, then? Is there a way to enjoy the benefits of offshoring while protecting yourself from the risks — risks that could jeopardise your business?


 

Years ago, I started searching how to minimise the risks of offshoring.

I was enjoying working with a freelance virtual assistant, but needed to grow my offshore team without spending so much time coordinating tasks between the members. I needed a manager on the ground.

It turns out there’s a model for this: managed operations. Managed operations is like having an offshore extension to your office. You don’t own a company offshore, but you get to manage your team all the same. This is done by outsourcing the management of that team to a third party.

The provider of a managed operations service takes care of office space, Internet connection, hardware, software, and best of all, recruitment. An overseas client ‘rents seats’ from the managed operations provider.

How does this minimise the risks of offshoring?

There are many ways, but for now I’ll list down three:

  1. Increased accountability. Because virtual assistants report to an office with fixed hours, you know exactly what time they’ll be online, and on what days. If they go on a lunch break, you know they’ll be back in an hour. They report their progress more frequently with the help of a manager (at my own managed operations firm, we call them Results Coaches). And they won’t disappear after a project ends.
  1. Someone does the hiring for you. Scouting and screening of candidates, asking for portfolios, contacting references, scheduling interviews, creating contracts… all that is fine if you need only one virtual assistant or freelancer. But if you see your offshore team growing in the future, scouting and hiring can become almost a full-time job. With managed operations, all you need to do is interview shortlisted candidates via video conference and choose the best fit.
  1. Improved connectivity. This is a huge relief if you’ve experienced having a home-based offshore worker switch off for hours without explanation, only to receive a message in the evening saying the power went off. After all, power outages aren’t unusual in countries where you tend to find cheaper labour. But if your virtual staff report to an office, they’ll have power generators that get them online again in a matter of seconds should a power outage occur.
Now you may be wondering how managed operations differs from BPOs. That’s for another article — but if you’d like to find out now, this e-book on The 4 Simple Rules of Effective Offshoring will give you the details.

 While I believe that managed operations tends to offer you the best of both onshore and offshore worlds, it does not work for everyone. It might not work for you if you’re only looking to test the waters with one small, short-term hire. Or, as was the case for one of my clients, your team may grow so large that you’ll need to set up your own branded office or company offshore.

However, if, like me, you are attracted to the level of control that comes from being able to lead your virtual staff and get progress updates as often as you need, managed operations is definitely a route worth considering.


 

Topics: Outsourcing & Offshoring

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