Situation analysis before Offshore OutsourcingFriday, February 10, 2006
When the managers have been asked to learn more about Offshore Outsourcing, it would be extremely difficult to argue against cost reduction, especially in the face of increasing work and shrinking budgets. But before embarking on that situation it is very important to sit back and consider some of the following criteria.
The way Offshore Outsourcing fits with business strategy and Offshore Outsourcing is useful to fit with organizational strategy are the two main criteria to think before starting actual process.
Make your step back and look at where you are today. What is working for you, and if it is working how well is that working? These are some positive points which favor you. Then start thinking and ask yourself again what that is not working? Most important, how do you work the actual process? What are the internal and external interfaces? Who defines the work, which functions sanction it, who consumes it and how? How do you respond to User requests? How do you prioritize the work? Do you follow any standards by the process or not? Do you have any formal processes in place? So, these are some of the question that should be analyzed before going for the process of Offshore Outsourcing.
Next thing is to look at the business imperatives for some change. Review at all your short term and long term goals that need to be achieved. What is there which you can meet with your budgets, what skills are lacking?What is it that you cannot get?
The business objectives for Offshore Outsourcing:
Reduction in cost, if so than review your goals; Staff Reduction, if that is likely so which functions and how would be staged are the primary question; for the growth which skills would be needed; customer satisfaction – If so do you have any established measures for this or not; time to market which tells that, What training is essentially required? What is the ramp up requirements and what are the skills needed for Offshore Outsourcing?
The answer to meet these business objectives would be full or partial outsourcing. If it is likely so, first of all identify what functions or development needs to be offshore. And review how; this would affect any ongoing development or new developments. How would this adapt to any changes in business or user needs? How quickly would it like the change to take place in the service offering by Offshore Outsourcing?
Finally, the important thing is that, what are the long term objectives to be achieved by decision? How long would you consider outsourcing? How would this fits into your organizational strategy? At some stage, would you, like to own a low cost remote development center or not?
With such an analysis there could be change in the approach to Offshore Outsourcing and one may create an entirely new outsourcing and governance firm that works to meet both short term and long term objectives for the company itself. The critical to success in any offshore business is by initiative a long term strategy that will determine an appropriate business model, which explains some approaches for Offshore Outsourcing.