If you were to research the horror stories of offshore outsourcing gone wrong, you will find countless examples. You will find many cases where visions of saving money turned into hopeless legal battles and expensive lessons that would send chills to your innermost soul. You will also find examples of success. Since offshore outsourcing is such a hotbed of controversy, I hope I can bring some balance to the issue.
The question on the minds of many small business owners is, "Should I consider offshore outsourcing?" The leading problem and cause of horror stories usually results from lack of due diligence. Before you consider the possible savings, you will benefit from extensive research.
If you understand the cultural differences and make allowances for whether or not the laws will protect you in a dispute, it can help you make informed decisions. You must also understand international banking and how funds will be tied up during these transactions. Intellectual property and trade secrets should be a paramount concern.
While these are important considerations, let's look at this from some common sense perspectives. Whether you are manufacturer or a service provider, even if your competitor's are using offshore outsourcing, you could gain some competitive advantages by not following the crowd.
Any kind of outsourcing often involves surrendering control. If you are in manufacturing for example, the company that plans, engineers, develops, creates its own tooling, produces, and services their own product, is going to naturally be more responsive to their customers. They are in a position to further improve the product and answer any customer support issues.
If you can structure your company so that a single team of people sees each project through from beginning to end, and continues to serve as a single point of contact after your product goes out the door, those people will become the most knowledgable. By nature, they will develop a sense of pride in what they do and take ownership if you allow them to. If you are willing to listen, these are the very people who will help you streamline your costs and increase efficiency.
Your organization may need to form strategic alliances and outsource to better serve your customers. Even with modern communications, having these partners in close physical proximity is usually more of an advantage, even if the costs appear to be lower elsewhere.
In an age when so many are going overseas in pursuit of cheaper labor, you may want to ask yourself if they are creating an opportunity you can take advantage of. While your competitor's are throwing their labor force away, you could hiring grateful people who have experience. If you can't beat your competition by being cheaper, you beat them by being better at a competitive price.
If you are in a position to responsibly consider offshore outsourcing, you are faced with spending your resources one way or another. You can invest in the expensive process of making sure it doesn't serve as a detriment to your business, or, you can look at ways to make your business stronger by teaming up with people close to home who already understand the market.
About the Author:
Steve Chittenden is the webmaster for H&L Advantage, a lean manufacturer of plastic products. Services include plastic injection molding, design, tooling, and product development. Please visit www.hladvantage.com for more information.
Let's Skip the Offshore Horror Stories - To learn more about this author, visit Steve Chittenden's Website.
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Steve Chittenden
(Visit Steve's Website)
Steve Chittenden has been a small business
owner since 1986 when he started a sign
and graphic design company. His current
company, Creative Business Services in
Grand Rapids, Michigan, began in 2002 and
provides carefully planned web
design, graphic design, writing, and
marketing services to help other small
businesses to succeed. He is a strong
advocate of small business and operates
from a firm belief in the Bible as the
guide in his Christian faith and business
practices.
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