How to OffshorePosted: April 28, 2010
Today we fired one of our offshore teams. This post isn’t to criticize that initiative or the manager, they definitely weren’t working out, but it does bring to mind several lessons learned, at least from my perspective. This wasn’t my offshore team, but I do have an offshoring effort that’s been very effective thus far. Some advice for when you may be considering your next offshoring initiative:
When we created the offshore IT Operations Center, I spent a very significant amount of money with the offshoring company’s consultants to document every application, database, and server they would be supporting. I had them develop all of our procedures for how to escalate problems, and they put together all of our SLA documentation. In short, they wrote the manual on how to do business for our IT Operations Center. Then, and only then, did we consider hiring them to do actual operations work.
Augment, Not Replace
When we brought on the offshore team for the ITOC, it was an augment of existing personnel, which gave us two advantages. One, we didn’t have a fixed limit on transition period which occurs in a lot of offshoring initiatives. Second, we were not letting the onshore team go, so we did not end up with personnel training their replacements or the onshore teams attempting to poison the project. In fact, the offshore team has been a huge success with the onshore team they were augmenting because rather than having a 5 person team covering 24 hours a day, 7 days a week via pagers, cell phones, and a brutal on call schedule, the onshore team now has the ability to leave their house over the weekend rather than be tied to a laptop and Internet connection with confidence we have coverage for the business.
Process, Process, and did I mention Process?
If you cannot onboard a new resource in 30 days, no matter how complicated the position, you’re not ready to offshore. You cannot take a position that requires intense collaboration with onshore resources, high-end skill set, and a strong requirement on independent thinking and problem solving skills and send it offshore without also outsourcing the entire function. Creating a new team in a far-flung location requires them to be able to execute their job without ambiguity, without constant reliance on onshore resources, and with a clear direction as to their responsibilities and deliverables. This means that the processes they are facilitating need to be documented, defined, and well understood.
Offshoring is not Outsourcing
These two terms are used interchangeably, but they are anything but interchangeable. Offshoring means augmenting your resources with lower cost alternatives in another location (usually another country but I hear people are doing the same thing with lower cost US locations). Outsourcing means you are moving a function or a department to be handled by another company. Offshoring is often outsourcing but not always. If you are expecting a high-end skill set, you will only be successful with outsourcing the entire function. The team will need the flexibility to define the process, determine service levels, and generally be in control of the deliverables if you want them to do something other than providing a very specific well defined function.
Offshoring can be awesome for everyone involved, or it can end up in failure. How it’s approached has everything to do with how it’s received by the co-workers on-shore. Deciding whether to augment or outsource is critical, and if it’s an augment ensuring there are well defined processes that govern the output of the augmented resources is critical. Unclear expectations, lack of preparation, and malicious compliance by existing personnel will doom any offshoring effort to failure.