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Through mid-2010, Flat Planet spent eight weeks meeting with close to 100 business owners and managers (about two or three a day) talking to them about their attitudes to using offshore talent.
The result is Flat Planet (we based our business on their feedback) – but more importantly, the result is a strong understanding of the many issues that often prevent businesses from fully utilizing this important resource.
Flat Planet solves many of these barriers – making it easy for any business, no matter how small, to tap into the same pool of labor that underpins the profits of many of the world's global corporations.
Let's talk frankly about what the barriers are:
The Barriers to Offshore
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Your competitors are using offshore - you just don't know it.
We found numerous Australian businesses that had sophisticated offshore operations - they were just keeping it secret.
Why?
- Competitive Advantage
They don't want their competitors to know the source of their price or service-level advantage.
"I just don't want anyone to know how we do it. They look in amazement at what we produce and think I have spent $80k developing it, and really I have only spent $20k"
-Richard- a Sydney business owner
- Sheepish
They were a bit sheepish about it and sensitive to an impression that offshore was somehow "inferior" - despite themselves being highly satisfied with the work.
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Trust is clearly the
single biggest issue
on the table when it
comes to considering
offshore
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Driving this trust issue are three
dynamics:
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Legal
Management
Quality
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Legal
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Is my contact worth anything? If you sign a supply agreement with an offshore company, how do you enforce it?
-Sure, you can agree process and jurisdiction and so on… but the practical realities of resolving a contractual dispute across borders – especially into developing nations- make it unrealistic. You know and the supplier knows that the contract is more-or-less meaningless.
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A related issue is Intellectual Property. If you are giving a supplier offshore access to your client and database, financial data and business process, how do you ensure they respect it?
There is also fulfillment of obligations. Are they really providing the secure environment they say they are?
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Management
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How do I issue instructions? How do I offer guidance? How do they fit into my team?
-Many of these issues resolve down to the simple fact not many of us have experience in managing remote staff. And while we all have branch offices in Australian cities, another country just seems that much further away- even though it makes no difference at a practical level.
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Large corporations overcome this by using ‘Business Process Outsourcing’ – but documenting a process can be expensive, can lead to a reduction in market flexibility (critical for smaller business) and rubs against the issue of Intellectual Property.
There is also the issue of Productivity. This is not about volume of work, it is also about producing meaningful deliverables that add to the momentum of your business, not slow it down.
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Quality
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There is an impression that somehow offshore workers produce lower quality work than onshore workers. This is universal. Every business person in every country thinks their own people are the best people. However it is not true.
The developing world, places like India, Malaysia and the Philippines have been in an education arms race for 30 years. Every year 350,000 graduates hit the jobs market in just Manila alone. Big corporations are already there in droves, so many Filipinos have strong workspace experience. |
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The overlap issues include productivity. How do I ensure they are working? Will their work increase my momentum? Or will I slow down as I have to fix everything?
Security is also a quality issue. If certain security standards and processes are agreed – how do I monitor that and ensure it is being delivered and enforced?
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