Companies are often faced with various issues that often affect their decisions with regards to the opportunity of international outsourcing services. There are several factors that can affect a cost benefit analysis for offshore outsourcing.
This is to say that the decision must not purely rely on the cost or savings offshore outsourcing can offer. Even if offshore outsourcing makes easier for the company to save considerably on cost of their business operation while giving them leeway to focus on their core tasks, there are several factors that must be taken into consideration before deciding offshore outsourcing as the key solution for improving productivity.
First of all, the legal implication involved in offshore outsourcing must be carefully evaluated. Before deciding on the offshore outsourcing destination, the company must evaluate all the legal aspects involved in offshore outsourcing in that particular location. Different countries have their own set of policies and some of these can affect the projected profitability and efficiency of the outsourced service. Assessment of local laws becomes very important for the company looking to outsource. Judgement regarding the choice of law influential with the contract must be taken in advance by both parties agreeing into an outsourcing contract.
And since international outsourcing can put important company data at risk, it is important to find out how the international outsourcing services will implement data protection and privacy.
Data protection and privacy issues are addressed differently in different countries. So in order to make sure that the business operational secrets will not be put in a compromising situation, it is important to first assess the stability of IT infrastructure of the outsourcing firm to verify the strength of security the outsourcing provider can offer. Sharing data is inevitable when a company outsources some of its services or business processes but risks can be minimized when both parties understand the need for formidable data security, employee screening, and privacy.
It is also important to assess the project risks before signing an agreement with a particular offshore outsourcing firm.
The location of the outsourcing provider will always have a direct impact on the success of the project. In order to minimize risk, learning the various factors with regards to the location of the BPO provider can help assess whether it is worth the risk outsourcing the business processes to that particular destination. Communication barrier is a common hindrance although this is minimized when the project is outsourced to Philippines because of its labor force’s English proficiency. Time zone and cultural issues can also have a significant impact on the success of the project. Project risks associated with level of service, quality of output, technology transfer, project turnaround, and management must be carefully assessed in order to guarantee profitable and successful project delivery.
Choosing the right international outsourcing services will be the last straw in determining the success of the outsourcing activity. Even if the offshore outsourcing destination is very ideal for the business but the provider is not, the success of the business process will not be guaranteed.
Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee, http://www.123Employee.com. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Business Live! http://www.BeyondBusinessLive.com inspires entrepreneurs to meet challenges head-on in with revolutionary new theories and systems allowing them to design the business and personal lifestyles of their dreams.