Jamie McBrien is arguably Australia’s leading expert on offshoring and outsourcing, with over 20 years’ experience consulting on the financing organisation of outsourcing projects. In the past three years, he’s worked with many ASX listed, privately owned and multi-national business, on projects relating to transformation, process re-design and outsourcing.
He recently spoke to The Outperformer about how to build, and effectively implement your offshore strategy. During the interview, Jamie discussed several pertinent issues, including:
- Appreciating the offshoring journey
- Building blocks of an offshoring strategy
- Common breakdowns or risks in the offshore strategy, and
- Addressing anxieties of onshore stakeholders
The entire interview is available here on our website, but here are some of the key take-outs of the discussion:
What Is Outsourcing, And How Do Companies Get Started?
Outsourcing, or offshoring, is a transformation initiative. Essentially, it’s the practice of using shared services, provided by a third party, in a different jurisdiction. Most companies get very excited when they first consider outsourcing because they know that when it’s done properly, it can result in significant cost savings. However, Jamie stresses the importance of taking a step back and first starting with a proper review of where the opportunities lie.
A CASE FOR CHANGE
“We need to look at how we build a plan and a case for change,” he says, “as well as how we manage the risk and the change through that process. That initial assessment is critical for setting the roadmap for the future, and helps secure agreement and buy-in across the entire organisation.”
Once this all-important buy-in has been achieved, support structures then need to be designed and built.
“All the things you need to be successful in offshoring are things you also need to be successful in simply running your onshore business day to day,” says Jamie. “We need to make sure we get those things in place prior to even considering moving any of activities offshore”
SETTING UP FOR SUCCESS
Jamie highlighted some of the important questions companies need to ask themselves when considering offshoring as an option:
- Do we have the prerequisite structure and system attributes in place?
- Are there proper processes and standard operating procedures?
- Is there a proper business case for change?
“Any problems onshore become even bigger issues in the offshore circumstance,” says Jamie. “These all have to be fixed before you go offshore.”
Where Do Some Companies Go Wrong With Offshoring?
One of the most common mistakes companies make when considering offshoring is to only compare like with like, focusing on the cost savings. While this can be very attractive, ataround 70 percent of the baseline costs when compared to a similarly qualified person, there is opportunities over and above simply cost reduction.
“It’s about thinking what else can we do,’ says Jamie. “How can we change the way we do things to make the most of, and leverage, the offshore platform? Perhaps there are new services and processes that we would like to support, but we are simply too resource constrained to do them in Australia. There is often the ability to do things offshore that simply wouldn’t stack up onshore. And that’s where a huge percentage of the benefit lies. Yes, the cost savings are significant, but we mustn’t ignore the added benefit of being able to add things to your business that are going to drive revenue.”
What Are Some Of The “Watch Out” Points?
Jamie believes that having the right leadership team in place to manage the offshore team is absolutely critical. Getting professional advice from offshoring specialists can help this team navigate the “bumps” they’re likely to encounter along the way.
“It’s important to get the right guidance and advice,” says Jamie. “A lot of the horror stories about offshoring come down to a lack of expertise as to how to approach it.”
It’s also important to start small and pick an area where you know you’re going to be successful.
“Choose an area where there’s not a lot of risk, and where you know it’s not going to upset customers.,” recommends Jamie. “Use that as a point on which to build confidence and prove the concept. You’ll then get organisational buy-in, and can expand from there.”
SELECT YOUR OFFSHORE LOCATION WISELY
As a final point, Jamie highlights the importance of choosing your offshore location very carefully. “Just because your offshore location might be a low-cost jurisdiction, it doesn’t mean you have to go low cost on everything,” he says. “You still need the facilities and technology infrastructure, and you want people to have a decent place to come to work every day. Your offshore team is as much a part of your business as your onshore team, just in a different location.”\
MORE ABOUT JAMIE MCBRIEN:
Jamie is the founder and director of optiBPO, a company that helps companies in Australia, New Zealand, Europe, UK and North America set up dedicated outsourcing operations in the Philippines. With offices in Sydney, London and Los Angeles optiBPO provides advisory services for companies looking to offshore. You can check their website here for more information.