Reducing costs and improving productivity are two of the most critical elements of running a successful company.
Offshoring checks both of these two boxes to ensure company objectives are met.
Reading the statistics, it is not hard for any organization to take a step ahead and outsource its few services.
But, what’s important is, doing it the right way!
A real world example:
A company based in Sweden is into complex products for process automation and control in which software is only a part of the system. As software development was not their core function, they decided to offshore it to one of India’s biggest offshore development companies. The motive was to help their expansion affordably.
Soon they realized that they are not being benefited from the arrangement with the offshore development company.
Here were the observations!
Every time the Swedish team visited the offshore team, there were always new faces.
New employees needed to be trained all over again.
The high turnover resulted in the unexpected quality of deliverables.
There was no expected bond/collaboration between the onshore and offshore teams.
This all resulted in a very high cost to the Swedish company.
They closed their operations within 3 years as no growth was seen!
Cost-effectiveness – this is the core purpose of offshoring any service for that matter. Yet, statistics suggest otherwise.
"According to several studies, half the organizations that shift processes offshore fail to generate the expected financial benefits. ~ Harvard Business Review"
Does that mean offshoring does not work? No… it does work but there is no one way to get the offshoring strategy right! With several models of offshoring and companies at your disposal, it becomes very easy to forget the goal and divert in unwanted directions.
But there are few things to keep in mind, so you do not lose the right track. Here we have put 5 points together that you must consider while creating your offshoring strategy.
1. Choose the model that suits your requirements or project
There are multiple offshoring models. Some let you a comprehensive experience while other models keep oblivion from the internal happenings in the offshore team. Most of the models consider only the expected deliverables as a measurement of success.
When it comes to software development, other than deliverables, a lower attrition rate, a team with one vision, and process orientation are also significant.
Thus, choosing a likewise model is also a must!
To know more about the differences between offshoring models click here
2. Thorough due diligence of the offshoring partner
When selecting an offshoring partner, it is a must to understand what is their forte? Know about what kind of talent is available with them? What are the technologies they have worked in?
Understand the working of their processes and how they align their team with you. Another important aspect of offshoring partner is whether the team would be dedicated to your project or not.
The legal establishment of the offshoring company must b verified before you carry any transactions forward.
These factors verified will ensure the quality of work you need for your software development projects.
3. Choose direct collaboration with team, especially for software projects
Software development itself is a critical process and hence, complete transparency between teams is crucial to keep deliverables and quality on track. Go for one-to-one communication with offshore team members to deliver your expectations.
Also, it will help you form a bond between your onshore and offshore team, which would be conducive to enhanced productivity.
4. Define exact roles and responsibilities of the offshore team members
Even though your offshore team members might have similar profiles for the job, you must have clear roles and responsibilities of each member defined.
Working with two teams means there is already a lot on the plate to manage. These clearly defined roles and responsibilities will ensure the seamless working of the team. Plus, it will certainly eliminate confusion between similar profiles.
A few questions to keep in mind!
Who will be working on what?
Who will review the work?
Where to forward completed work?
What are the boundaries of the task?
Who is responsible for a particular task to be delivered?
5. Setting right parameters to measure the success of your offshoring strategy
As we talked about in the earlier point, when it comes to software development, deliverables are not the only parameter to measure the success of an offshore team.
Is there any difference in the quality of work? Is it negative or positive
What is the attrition rate of offshore team members?
How much time does it take to train new hires if any?
Is it cost-effective and helpful in the long term?
All these parameters are significant as well when measuring the performance of your offshore team!
Organizations can guarantee to reap the full benefits of offshoring by avoiding certain mistakes. Doing complete research about the offshoring model and partner, set up the right success measuring factors, and define the roles and processes are the essentials of getting offshoring right!
Braves helps global technology companies incubate their dedicated offshore development teams in India. The team in India is an extension of the onshore team and works collaboratively to achieve their goals.
With 17+ years of experience in technology recruitment in the US and India, we know how to build a team of high performers. Our fully managed operations model along with people driven policies has helped clients scale their teams with a high employee retention rate of 85%.
Get in touch with us to find out more.