Unlocking The Potential Of Offshoring


Offshoring has enormous potential for your business. It can cut costs. It can free up key resources. And it can transform your business into a dominant market force. The question is: How do you unlock this potential?

Realizing offshoring potential is a challenge. Make no mistake.

But you can do it by:

– Targeting the right projects

Choosing the right provider

– Managing the provider relationship

Of these, the last is perhaps the most critical and the one we’ll focus on here.

Managing The Potential Provider Relationship

To get the most out of your service provider, you need to focus on three things: relationship management, governance issues, and organizational change management.

Only then can you unlock offshoring potential—whether you’re offshoring tech support or customer service.

Below are some tips to help manage your service provider:

Relationship Management:

To set the right tone for the relationship, make sure you:

– Include your key offshoring objectives in the performance objectives you set for the project. Communicate these objectives to your provider.

– Take on projects early in offshoring that has sufficient critical mass and other benefits to warrant the investment. Early “victories” boost everyone’s confidence.

– Measure everything—not just cost savings. Other improvements, efficiencies, and benefits are just as critical to business value as the money.

– Choose a provider whose level of quality maturity aligns with yours. Use the Capability Maturity Model as a guideline.

Action Point: Assess your organization’s level of quality using the Capability Maturity Model. Match your company’s level against that of one of your suppliers. Determine if they match up.

Governance Issues:

Governance supports the tone you set early throughout the engagement. To do this, make sure you:

– Align both organizations through a formal, well-defined governance structure. It should include clear roles and responsibilities. A well-defined structure helps bridge the gap between both cultures.

– Define and monitor critical success factors. Report results through a formal governance process. This effort provides visibility into services and a single vision of the truth as to how well everything is working.

– Conduct regular and unbiased service assessments. Use well-defined parameters and metrics. Consider using a balanced scorecard approach.

– Disseminate governance information to everyone that needs to know. Use existing tools, technologies, and norms, like current program management services, whenever you can.

– Conduct regular internal and third-party audits. Make sure there is a common understanding between you and your provider as to governance and reporting.

Organizational Change Management

Without good change management, even the best solution won’t work, so make sure you:

– Provide training for everyone who needs it—including the provider’s associates, if necessary. Focus on how the two companies can work together effectively.

– Target internal training at project/service managers that have the majority of interaction with the provider.

– Recognize that managing organizational change is the key to mutual—and sustainable—success in offshoring relationships.

– Create and maintain an environment that fosters open and honest communication and mutual trust between organizations.

These tips will help you more effectively manage the relationship with your service provider. That in turn can help you unlock the enormous potential that offshoring offers.

Organizations that unlock offshoring potential can reap big dividends from the business value delivered by these initiatives. This boost in business value can turn your organization into a dominant market force.

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