iSphere Global

To Offshore or not to Offshore? That is the question For decades, the “Western World” has looked to various lower cost options, to outsource and/or offshore various activities, from service work, to technical delivery and support teams. The initial premise was often as a cost arbitrage, saving money and allowing those savings to be banked or reinvested. Over time, a number of the large offshore players, both captive and third party, have sought to move up the value chain, and deliver more complex work, such as modelling, analytics and automation services. For some companies, this has been rewarding, and very successful. For others, it hasn't worked out so well, with quality, and ultimate cost both falling short of expectations.   The world has become smaller in this space as we have been able to embrace other regions and work well with them. On a personal note, iSphere Global embraced the Philippines back in 2002 to deliver a major platform upgrade for one of our big Nordic clients. The projects were a major success because we balanced the price and quality equation purposefully. We could have secured cheaper resources, but instead paid a premium for experience, allowing us to deliver the right outcome within the timeline. The cost was about half of the onshore option. We also had on the ground presence, and incorporated the resources into our daily rituals and meetings, allowing both engagement and accountability to be exactly the same as those people in the local region. Productivity and cost should always be in focus for businesses, and becomes more crucial in a low growth environment. Organisations with good leverage, look to secure these services as the "best" rate contractually, and drive price down. Whilst negotiation is important, the price versus value should also be well understood. Organisations that demand very low pricing, will make it hard for these offshore businesses to recruit and retain the best talent, which inevitably comes at a premium in any market. All good businesses manage margin, and the outcome of base pricing will often lead to less experienced personnel servicing the account. How this manifests over time, can be program deadlines not met, re-work in projects, service standards not delivered, or poor customer experience outcomes.   As a service provider we engage in this conversation often with our clients. We will always be competitive on price, but we consider delivering our quality and reliability as imperative to maintaining our reputation as a great partner. We owe to ourselves, our employees and our clients, to be transparent about what they can expect at any given price point. We have seen the total cost of delivery blow out by using less experienced resources time and time again. We also have seen offshoring examples where local accountability and oversight is lacking, and again, this can lead to poorer outcomes for all. Keen to understand the thoughts of my network on this.