How do I know if I am ready for offshoring or nearshoring?
Offshoring and nearshoring are becoming increasingly popular. Articles are published about new offshoring decisions made by multinationals almost every day. And with the eternal struggle to find talent and lower costs, the importance of involving people from offshore or nearshore countries grows. The question that I hear frequently is ‘am I ready for offshoring?’. It appears to many people that offshoring is something for the multinationals, but is that true? Does readiness depend on the size of the company, of the projects or on other factors?The questions that you need to ask yourself are (not in order of importance):
1. Do I have a real problem that can be solved by going offshore?
If your problem is ‘my company is stuck in its growth because I can’t find the right talent locally’, you have a real problem and it can be solved by tapping into an offshore labor pool. If your problem is ‘I have a very complex software project which you can’t do yourself because it has an incredibly tight deadline’, you do have a real problem, but it’s not going to be solved by going offshore. Most likely, it will make your problem only bigger, because you need time to learn how to manage the offshore team and you are going to loose valuable time with the extra communication required.
2. Do I have strong and documented processes?
The precondition for being able to manage external resources is having strong (internal) processes. If your processes are ad hoc, not given enough thought and not documented, offshoring will only result in more complexity. In a software outsourcing context, you might use the agile software methodology. But does everyone know exactly what he has to do? Did you document each step of the process? Does everyone understand what is expected of him? By putting your processes on paper, the way of working can be clearly articulated to the external people. Based on these processes, clear expectations can be set and you will have a good fundament.
3. Do I have the right management in place?
This question should be asked on two levels: top management and middle management. First of all, the top management team needs to make a conscious, long term strategic decision to offshore. The transition will need to be supported by the whole organization and the management team has a crucial role in ensuring this support. Second, it is crucial that somebody within your organisation is accountable for managing the relation with the external team. In a software nearshoring context, this would be an experienced project manager, preferably with some experience in managing a nearshore or offshore team. The person should have sufficient time to manage the external team on a daily basis, support them technically, communicate requirements clearly, organize meetings.
4. Is my company stable and ambitious?
It is hard to define the readiness by the size of your company. Offshoring is done by individuals as well as by the big multinationals. Assuming you run a company with more people than yourself, you do need some structure. Typically, a company that can say yes to 3 of the following factors, should have sufficient structure: exists more than 5 years, has more than 10 employees, makes more than a million USD in turnover, ambition to grow (substantially).