3730_BizOpsOffshoringArticle_Blog-1Brian LeFebvre co-wrote this post with Rajat Jain.

Offshoring has become very common, either with an external partner, or with companies setting up their fully owned capability. While offshoring provides several benefits, the most common has been cost containment. Most enterprises don’t realize offshoring’s full potential, however, and it’s usually because of human, not practical challenges. Shifting a company’s capabilities to another location and culture is a major transformation. Preparing a business to deal with any transformation requires a deliberate change management process that directly addresses the emotions involved. Following are some aspects to consider for a successful onshore-offshore working model.

  1. Ensure alignment at the outset. The success of any transformation depends on whether your people understand it. They need to have a clear idea of why the change is required and what the future state will be. The first step to gain this alignment is to establish and communicate the case for change and the vision, including the “what’s in it for me” for each individual onshore and offshore. The second step is to achieve leadership alignment across functions and win their visible and consistent support. If there are mixed messages coming from different functional leaders, then onshore adoption and offshore team motivation will suffer.

    The initial stage of the transition is the most critical part as this is usually where misunderstandings arise. Such misunderstandings are often caused by a lack of alignment or the misreading of service-level agreements, hindering the establishment of a healthy relationship. The success of the transition hinges on total commitment from the senior leadership of both parties. It’s an important step in ensuring that the objectives and goals of the two organizations are completely aligned, with no scope of conflict.

  2. Openly and positively address cultural differences. Cultural differences between the onshore and offshore organizations are one of the biggest challenges to ensuring a successful transition. It goes without saying that every region has a set of cultural values that guide the everyday life of people, from their approach to work to how they deal with change. Add to that the religious and social differences between regions and countries and we have a challenge that one may find intimidating to even face, let alone overcome. The challenge may seem insurmountable, but if both onshore and offshore leadership address this in a positive manner and devise measures to understand and educate each other of cultural differences, a smooth transition is possible. Interactive sessions are the best way to understand disparate socio-religious cultures and build mutual trust.

    There are also challenges in the implied hierarchy. There’s a danger that the onshore team can project a sense of superiority and treat their offshore counterparts like resources rather than colleagues. Imbue a culture of fairness and mutual understanding to ensure that there are no perceptions of a pecking order. Some tactics include flying onshore leadership and business stakeholders to cross-office locations to connect with onshore teams, sponsoring collaborative training sessions, encouraging “camera on” meetings, sharing holistic “human” biographies and promoting continuity and close partnership between each onshore person and their offshore support counterpart. All these things increase human interaction and collaboration, and if done well, biases can shrink away.

  3. Align your change with the needs of your onshore team. Change is successful when people want it. Therefore, it’s important for an organization to take a human-centric approach to change management. It must try to gauge the needs of its onshore team and align the case for organizational change with those needs. In the case of offshoring, the organization should learn about how the onshore workforce perceives offshoring and might react to such plans. The organization should put themselves in the shoes of the onshore team, find the value in the desired change and design their plans to benefit them. Showing the onshore team how the change would benefit them before making the change can work wonders. When the onshore workforce realizes how the change would benefit them, they’ll support the objective. Only then can an effective communication and engagement about the change be established.

  4. Engender trust with transparency and two-way communication. People care about what they’re close to. The organization should make the onshore team feel involved in the change process. If they feel heard and their inputs are acknowledged, they’ll be more likely to accept the change. An offshoring plan, when guarded from the workforce, breeds mistrust of management, resulting in less buy-in, which ultimately spells doom for the project. Once people are heard and their skepticism is addressed, they’ll be more likely to work with the change. It’s also important that leadership communicates their plans within and outside their organization in a timely manner. A delay in communication can create confusion among offshore and onshore employees and risks spreading misinformation at the cost of their trust in the organization and the initiative.

    Deep immersion of the offshore team into the world of their onshore counterparts to establish empathy and enable better quality work, can create strong trust. The onshore team should take responsibility for this.

  5. Deliver a great experience. Any change that compromises quality, increases iterations, reduces responsiveness and challenges effective communication and human interaction, is not worth pursuing. At the end of the day, the reason behind implementing any change is to improve the stakeholder experience. With the motivation to deliver a great experience to these stakeholders comes the willingness to make the initiative successful. When people see their peers adopting the change, they’ll want to be a part of that change as well. Therefore, it’s important to build a collaborative environment in which people feel empowered to voice their opinions. It motivates them to make their best efforts, which in turn, produces great results and makes stakeholders happy.

In general, while starting a new offshoring journey, it may be best to have a “test-and-learn” mindset. Start small, learn, demonstrate successes and tell big stories, before expanding. An offshoring strategy promises improved cost efficiency and an improvement in the value of products and services for customers. It’s natural that organizations would rather channel their resources and effort toward establishing an offshore capability than inflate the cost of their products and services with an all-local business operation. But an offshoring capability needs to be done right. While these five steps are not all-encompassing, they are the essential keys to getting an offshoring initiative up and running.

Topics: change management, optimization, process optimization, business operations, COE, outsourcing, offshoring