NEWS & EVENTS

OFFSHORE OUTSOURCING - OTHER ISSUES

A little too late, is much too late – German Proverb.

Apart from the specific issues related to Outsourcing Vendor, Country and Personnel there are some general issues that must be addressed by the outsourcer. If timely thought and appropriate action is not taken, these issues can affect the successful and timely completion of outsourced project.

• In-house Flexibility:
  Besides training of offshore team, the outsourcer must also prepare his team for the change in working environment that is to come. Wrong perceptions relating to offshore outsourcing within outsourcer’s team must be put to rest. This phase needs to be planned well.

• Balancing expected benefits & inherent risks:
  Don’t expect substantial savings (like reduction upto 80% in your costs) right from start of offshore outsourcing. Savings will result but over a period of time. Consider the hidden costs involved in vendor evaluation & transition process, layoffs of some existing employees, if need arises, managing the offshore contract, et all while calculating the resulting savings.

• Building an effectual relation:
  Outsourced work can’t be entirely left into offshore vendor’s hands. Appointing a moderator, capable of maintaining a strong business relation as well as taking care of whether all the outsourcer’s requirements are met, helps to get the best results from outsourcing. This moderator can work onsite for better co-ordination and clarity of understanding between the two teams.

• Loss of Proprietary Business Knowledge:
  Outsourcing should not lead to loss of business knowledge - your competitive advantage. Opting for Insourcing is the best alternative, where your patent secrets are concerned.

• Create concrete internal processes before outsourcing:
  Clearly identify your fundamental and secondary activities. The outsourcer needs to well-define his existing specifications and processes as well as those expected from the vendor. Offshore vendor may have to compensate for lack of well-defined internal processes, resulting in reduction of your expected savings. Depending on these, further decisions regarding following issues can be taken:
      -Whether to outsource a service fully or partly?
      -Whether to go with a single vendor or multiple vendors located either at single or
        multiple locations?
      -Whether it is viable to have long-term relation with a single vendor or to
        proceed on experimental basis?

• Important formalities:

  1. Service Level Agreement (SLA):
     SLA lists out the minimum level of service to be provided by offshore vendor. Clarify precisely what, when and how you expect your deliverables. Offshore vendor and outsourcer’s objectives should be streamlined into a common goal. Include time-tested techniques to measure performance, which will help keep a track of the deviations between real and expected results. Taking care of minute details in SLA rules out chances of any misunderstanding or disagreements later.
     
     Global Delivery Model, adopted by MachroTech, stands true in terms of the service level agreement's issues, serving the outsourcer with required system availability and agreed upon response times and processes, the two main components of SLA.

  2. Contract Duration:
     The contract duration, which must include transition period, depends on factors like nature of services outsourced, the prerequisites required and overall market conditions.
     
     

  3. Meeting license requirements:
     Make sure that the offshore vendor’s license gives him rights to take up offshore assignments as well as services provided are well within the limits included in business license.

  4. Warranty:
     Warranty should cover important aspects like specification conformity, quality assurance, and ownership of final deliverables, et al.
     
     

  5. Insurance:
     Both the parties should have necessary insurance claims to take care off sudden loss through unforeseen circumstances.

  With MachroTech’s Global Delivery Model, you can be assured that all these issues are taken care of in time. Global delivery Model is a proven offshore engagement model and minimizes the risk of Offshore Outsourcing.