Business

The 3 Key Strategies of Outsourcing and Offshoring – optiBPO

The 3 Key Strategies of Outsourcing and Offshoring - optiBPO

Clients often know where to start, but they don’t really see the bigger picture. This is where the idea of a value map comes in. You have to think about the broader organisation and the opportunity for outsourcing and offshoring.

There are three main strategies that are often recommended for offshoring that helps clients make their business successful. These include, Like for Like Strategy, Transformation of Process, and Enhanced Services.

Learn more about the outsourcing and offshoring as Jamie McBrien, CEO of optiBPO, discusses the key prerequisite for offshoring to get clients offshore ready.

 

 

Transcript:

Wayne Bucklar:  Jamie McBrien of optiBPO, what are the outsourcing strategies that you apply?

Jamie McBrien:  Hi Wayne. There’s three main strategies that we like to think about with our clients. The first strategy is the easy one, that I think most of us understand pretty well. It’s the “like for like Strategy.” Taking an activity onshore and doing the same activity cheaper offshore. Strategy number two is the “Transformation of Process.” This is changing the way we do things, such that we can use the support of the offshore team to do more of an activity onshore. Strategy number three is “Enhanced Services” which is thinking about what are the things that we can’t justify doing onshore, but perhaps stack up offshore. So when we work with our clients, these are the three main strategies that we work through.

Wayne: Is working with onshore processes to make your offshoring successful a basic requirement?

Jamie:  Yes, a key prerequisite for offshoring is making sure you have got a good strong process baseline. To use a sporting analogy, otherwise it is like throwing the ball in the air and hoping someone will catch it. Many of our clients do have a process gap, and it is something we often rapidly help clients to get up to speed, to ensure they are offshore ready.

Wayne:  Describe the optiBPO Value Map.

Jamie:  One of the questions with our clients is that they often have an idea about where they can start, but they don’t really think about the full breadth of opportunity that offshoring presents. The idea of the value map was to think about the organization, think about how it creates value, and then think about all the different areas where offshoring can support them. We went through all of the hundreds and hundreds of different roles we have offshored, and mapped them against how an organisation creates value. This looks across the value chain from generating revenue, to managing margin, to leveraging assets and then ensuring the enablers of technology and people are in place.   Interestingly, we have built teams across all aspects of the value map, and definitely moving up the value chain. Offshoring is no longer simply low value, repetitive work, and the idea of the value map was to open our customers minds to what could be achieved, and where they could gain the most benefit.

Wayne:  The optiBPO Value Map helps explain a big complex area to make it simple to conceptualize.

Jamie:  Yes. And as we have sat down with clients when you talk to them different parts of the value map, it is interesting some of the conversations that we have been having. For example if we start on the left where we talk about revenue generation, our clients are doing some pretty interesting things in that space.  A few of them are saying to themselves – “we’ve got these highly paid sales people onshore whose job it is to have face-to-face contact with the customer, yet they are bad at administration, and in any case it reduces their face-to-face contact, how can we change that?” What they are doing is pushing that sales support offshore, and after a sales call, making a voice recording of the key discussion points, and follow up requirements, and then sending that to the offshore team to update the CRM and schedule follow ups.  In fact, one client recently told me that they actually decided to take it one step further and told their offshore team that they could make some of the follow up calls. The interesting thing was all of a sudden the offshore team started making direct sales which was previously unheard of in this business.

Wayne:  Does the optiBPO Value Map extend to Lead Generation?

Jamie:  Yes, that is an example of that third strategy I was talking about Wayne which is around enhanced services. We all know that there’s lots of leads out there for all of our businesses.  The hard part is making the most of them. In the industrial products and engineering space, we have a lot of clients that review things such as tender databases to collect initial information to help them make the decision about what leads the best to go through. We all know there’s a whole lot out there, and we all know we miss a whole lot. But getting into the pipeline early, putting it through a process, and then making an informed decision improves lead quality.  It also helps with fast turnaround, as we all know that the first quality responder will probably be top of the pile.

Wayne:  What are the areas in the optiBPO Value Map that interest clients?

Jamie:  Accounting & Finance is always an area, which I’ll talk about in a second, but there is also a big focus on customer service. A lot of clients are reticent to disrupt the customer interface, and they often tell us about their concerns about an offshore team contacting the customers. However, a lot of them might startin order processing where the person is more of an order taker. But then again over time, as in the earlier example, they realise they have capability and product knowledge, and evolve the team up market over time. That’s the really interesting thing for me, getting the clients’ minds out of the idea that offshoring is about low level work. They can move up the value stream over time once they get confidence, and build the team and extend from there.

Wayne:  Do clients show interest in outsourcing the Accounting and Finance aspect of their business?

Jamie:  Accounting and Finance is always a core area, starting off in transactional areas like accounts payable and extending from there.  It is a pretty straight forward business case. In the candidate, someone costs AUD 65,000 in Australia, USD40,000 in the U.S, and GBP25,000 in the UK, it is pretty easy to see savings of over 70% on these teams as being pretty attractive.  However, the bigger opportunity is beyond that. We have clients that have a financial controller consolidating multiple countries. We have a treasury analyst who does cash flow projections across 19 countries. Again, teams are moving up market now, and the ability to transfer this knowledge work is becoming easier.  So there’s a whole lot of these high value activities that traditionally you would have said “No,” which we’re seeing a number of our clients now embrace.

Wayne:  The types of work that can be outsourced are countless.

Jamie:  Yes. Look, we even drink our own medicine which is pretty important, as clients ask us how much do we outsource ourselves? We’ve just hired a global Marketing Director. We made the decision a few months ago. We wanted a Global Head of Marketing and where they were located, be they in New York, London, Sydney, or anywhere didn’t matter. We just wanted the right person for the role and we wanted the senior person that was strategic and focused on our business, which is professional services.   So, we thought we would try to the Philippines, and even though we do this for a living, we thought we would have to revert to one of our home office countries. We wanted someone that’s got a senior marketing exposure working for Western businesses. We now have a lady who’s joined us, 15 to 20 years experience and work only for Western businesses in a professional services context, and who has hit the ground running.

Wayne:  There is a huge pool of very highly talented and experienced labor in the Philippines.

Jamie:  Look, there is. 10 years ago, you were hiring someone from a Filipino business having to train them on how Western businesses are run. Now you’re hiring Filipinos that has spent their whole career working Western businesses. They understand our colloquialisms which is important. They understand the way that we operate, and they understand the way that we do things. The calibre and capabilities are improving all the time.

Wayne:  Jamie McBrien, it’s been a pleasure having you with us again.

Jamie:  Thanks Wayne, thank you for having me.


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