Steps to Offshoring success

According to the media, offshoring can be such a painful process that it actually negates the cost efficiency benefits that it sets out to achieve. Nicola Simper, Project Manager at DAV Management, believes that it doesn't have to be this way.

In her latest business paper, Nicola explains how the right approach, supported by solid foundations, the correct leadership, the right team, good governance and board-level sponsorship, can turn offshoring into a thoroughly rewarding change programme; one which will provide the flexibility that most organisations need in order to remain competitive.

Making the decision to offshore is a major transformation for any organisation. It involves a strategic shift in the business and is often regarded as a once-in-a-management-generation decision. The full extent of this change should not be under-estimated, especially as the change involves people and relationships. Offshoring should never be handled as an out-of-the-box process. As Nicola points out, it is not a simple mechanical switch from onshore to offshore team - getting it right takes time (often three times longer than most organisations anticipate).

Fundamentally, offshoring represents significant change to the way operational services are delivered to an organisation. It is always going to be a sensitive process and as with any business change it needs dedicated management delivered by appropriately experienced leaders. Nicola believes that there are a series of questions that need to be asked before embarking on a project of this nature. In her opinion thorough preparation to ensure that you get the approach right is a prerequisite for success and some of the strategic imperatives that need to be considered include:

•Understanding your strategic business objectives
• Understanding the level of experience within your own organisation and being realistic about the gaps
• Having a vision of how the organisation will change as a consequence of the offshore
• Knowing what processes you will need to have in place before embarking upon the transition
• And finally you need to have a good understanding of your core competencies, for example knowing what components you will keep in-house, and ensuring that the right experience is built into both the offshore and retained team.

Nicola emphasises how important it is for the offshore and onshore teams to be working in harmony, as a blended combination, delivering activity in parallel with the offshore team working alongside the existing team. In order to achieve this it is important to carry out a full due diligence exercise to assess how long it will take for the new team to acquire the necessary knowledge and skills needed - and take the long view when acting upon the findings and recommendations of the exercise.

And finally, the organisation is embarking on a long lasting strategic partnership. The best relationships are almost symbiotic, so Nicola advises that making sure you have selected a partner that you can live with for the long term is critical. However she adds that the partnership should also provide the necessary flexibility to accommodate unanticipated changes. Having a commercial agreement in place that supports this flexibility and drives behaviour to deliver the outcomes you desire is absolutely critical. Yet the subtleties required to structure such an agreement are typically overlooked by most organisations resulting in a commercial baseline that is rarely in line with the long-term vision and intent of the parties at the outset of the partnership.

Nicola Simper's full business white paper is available on request. It addresses the steps that you can take to avoid the pitfalls that many companies fall into when undertaking an offshoring programme.

To help organisations realise the full benefits that offshoring can deliver DAV has launched a new Offshore Project Management (OPM) service. To find out how this can help to make your offshoring initiative work successfully for you or to obtain a copy of Nicola's White Paper 'Offshoring - Laying the Foundations for Success' please contact us.