“…. there is a widely spread expectation that cost of operations will fall significantly for the same piece of work that has been done for a long time with in house personnel.”
This is what the 2020 Deloitte Global Outsourcing and Insourcing Survey Report found via-a-vis the burning offshoring question-
The top reason to outsource overseas is to gather the cream of the crop from offshore locations at comparatively lower prices.
In essence, outsourcing is the contracting of a business function to an external supplier that often involves the systematic transfer of process, people, and assets to the supplier.
Loosely translated, it’s like getting the best of both worlds!
Outsourcing can also involve offshoring in which service is generally performed in another country where labour rates are lower than those where the service is received and there may be a significant difference in time zone. For instance, India to Sweden, Philippines to UK, etc.
Simply speaking, offshoring digital marketing is a company’s way of getting big bang for their buck.
And that is why offshoring digital marketing activities has seen significant growth over the past decade. Many companies have turned to offshore destinations to reduce costs and gain access to skilled professionals in areas like search engine optimisation (SEO), content marketing, social media management, and more.
However, it must be noted that navigating the intricate maze of global delivery models is already a highly complex enigma. Now add outsourcing and an offshoring component to the equation and the difficulty level shoots by several notches. What one finds is an even bigger challenge that demands thoughtful changes in the working ways.
To add fuel to fire, translation becomes a major hiccup as language barriers and cultural differences have willing companies tongue-tied and grappling with uncertainties.
On a flip side, if wisely executed, offshoring can pave the path for organisations to remain competitive, strengthen their hold in the digital market, and work smart so that they can focus on their niche area of expertise while delegating work to specialised digital service providers for best results.
When well executed, an effective offshoring arrangement can forge a mutually beneficial symbiotic relationship that can last for many years to come.
Below are 5 essential ways to avoid pitfalls while offshoring digital marketing services from a third party supplier.
1. Test the waters and explore your options.
- Determine the scope of what kinds of digital services will be outsourced.
- Examine outsourcing options and agree strategy
- Develop highly specialised operating model, business case, and governance wing.
- Map out implementation and key considerations.
As per Tholons Top 50 Digital Nations and A.T. Kearney Global Services Location Index of 2019, India remains the leading outsourcing preference.
India also has 14 super cities listed in the Tholons report.
2. Prepare Carefully.
Offshoring for digital marketing is process centric and location agnostic.
In the report titled, “Offshoring-how to ensure success,” Deloitte asked five vendors active in the Swedish market about their grassroot experiences and point of view of what homework organisations considering offshoring delivery should do.
The interviewed vendors recommended a number of key activities to be carried out before entering into an offshoring engagement:
- Define a strategy including goals and objectives
- Define areas that set the scope and guidelines for offshoring- Core (business critical) and Non-Core (non-business critical)
- KPI’s should be clearly pronounced both for smooth transition and steady state.
“Who does it from where, is not as important as what and how and the ability to measure the outcome. This is a cultural change and needs to be addressed before offshoring begins” as one of the Indian headquartered vendors express it.
According to Deloitte’s 2016 Global Outsourcing Survey, spending on outsourced services in the global market has almost doubled over the last two decades, from $45.6 billion in 2000 to the US $86.6 billion in 2018.
And it keeps on increasing. Now around 78% of businesses worldwide feel positive about their relationship with their outsourcing company.
As a result, 57% of US companies have increased their use of outsourcing.
3. Evaluate. Get to know the vendors.
At this stage, it is better to closely study your choice of a vendor.
Organisations considering offshoring should visit the delivery centers to get a feel of the offshore service provider.
It is wise to see them in action so that the vendor can be properly audited on various parameters like working standards, specialisations, previous track record, compensation, and adherence to local laws.
It is also a golden chance to establish report and build organic relationships as well as learn about the culture and work bandwidths of the digital service providers.
According to reports by NASSCOM, the IT and BPO industry in India has amassed a whopping revenue of $154 billion in the year 2019.
Over the next five years, 40% of India’s workforce is expected to augment their skills in order to meet the requirements of outsourcers.
4. Commit and Transition.
Make an informed decision.
Map out the paperwork from A-Z. In the context of offshoring, a transition can mean the passing of the baton, the smooth transfer of services from a legacy organisation to a vendor organisation in accordance with contractual requirements.
In order for a smooth sailing in the transition management process, it is advised:
- Clients set up a strong Program Management Office with representation from both the parties.
- Requirements should be outlined and fulfilled, risks and potential issues should be identified and addressed.
- Put up effective reporting mechanisms.
Ensure the offshoring operation is a well-oiled machine.
After the transition phase is over, the service enters into the operational mode and work picks up. At this stage, roles and responsibilities become highly visible and prominent. This can be achieved in the following ways:
- Conduct post transition review to assess the achievements of digital objectives.
- Ongoing programme management of supplier transformation activities.
- Manage post contract transition to new pricing models or Service Level Agreements (SLA’s)
While finances can be a strong motive to forge an offshoring arrangement, vendor-client experiences have shown that singular obsession with cost-reduction should not be the primary objective. In fact, to get the best of an offshoring alliance, the vendor must be measured on areas like customer satisfaction, superlative operational efficiency, the whole gamut of digital expertise, among many other things.
Thus, while navigating the offshoring landscape can require you to sidestep potential landmines so that you narrow down your search to the ideal service provider who carries out your digital marketing with utmost finesse, the search can be worth your time if you take proper steps and precautions to establish and communicate your digital objectives and expectations.
All the best!