Business Outsourcing

[sabus]

Despite the bad press over the last 18mths would you as a business consider outsourcing abroad if a UK company was offering you savings of 50% + guarantees?

 

[da8iwr]

We tried outsourcing abroad twice, as the money was incredibly cheap and the promises were perfect. Both times it fell apart in a huge way. One of the situations resulted in us loosing a large client.

Both the companies we outsourced too, were large, with good references, and an outstanding portfolio. But they were both over schedule, very hard to get hold off, and it just didn't work in any way.

I have spoken to many other web design companies who say the same thing. So we only work in house now, or with people i can get in the car and talk to, face to face.

 

[craiga1971]

I am totally unconvinced that the pros outweight the cons.

Craig

 

[sabus]

I am totally unconvinced that the pros outweight the cons.

Craig

Makes you wonder why the big boys are still doing it thou! Savings can be upto 75%. I've been looking at this recently especially back office functions. Reason for the question is Im thinking of setting up a outsourcing facility with a difference...... a UK office dealing with clients here.... and UK management on site at the outsource location.

My understanding so far as to why outsourcing fails:
1. Lack of understanding
2. Lack of communication
3. No Knowledge of UK business market and requirements
4. Language barrier
5. No Accountability

 

[craiga1971]

Makes you wonder why the big boys are still doing it thou! Savings can be upto 75%. I've been looking at this recently especially back office functions. Reason for the question is Im thinking of setting up a outsourcing facility with a difference...... a UK office dealing with clients here.... and UK management on site at the outsource location.

My understanding so far as to why outsourcing fails:
1. Lack of understanding
2. Lack of communication
3. No Knowledge of UK business market and requirements
4. Language barrier
5. No Accountability

I wonder how many organisations regret it, though, but are not in a position to withdraw from the contract.

A former client of mine outsourced their IT to a big player with lots of work being performed out of India. the language barrier was terrible and their idea of technical excellence and mine were very very different.

As all staff were transferred over via TUPE to the new organsition, it seems as though a conscious decision was made to disbaned the UK teams by redundancy, moving to another client, etc.. making it virtuallly impossible for the original client to bring the support back in-house at a later stage.

The outsourcing company promised the earth and delviered a very poor, skelton service.

Craig

 

[bridges]

There are a lot of companies within the UK providing outsourcing, and while the savings may not be as great, it is still enough to warrant it as a viable option, plus as they're based here there is less risk - although not entirely removed!

 

[sabus]

I wonder how many organisations regret it, though, but are not in a position to withdraw from the contract.

A former client of mine outsourced their IT to a big player with lots of work being performed out of India. the language barrier was terrible and their idea of technical excellence and mine were very very different.

As all staff were transferred over via TUPE to the new organsition, it seems as though a conscious decision was made to disbaned the UK teams by redundancy, moving to another client, etc.. making it virtuallly impossible for the original client to bring the support back in-house at a later stage.

The outsourcing company promised the earth and delviered a very poor, skelton service.

Craig

This is exactly what I dont want to do the idea is more to offer a backend support to support companies with the added advantage that is you dont deliver you dont get paid!

 

[virtuallysorted]

Makes you wonder why the big boys are still doing it thou! Savings can be upto 75%. I've been looking at this recently especially back office functions. Reason for the question is Im thinking of setting up a outsourcing facility with a difference...... a UK office dealing with clients here.... and UK management on site at the outsource location.

My understanding so far as to why outsourcing fails:
1. Lack of understanding
2. Lack of communication
3. No Knowledge of UK business market and requirements
4. Language barrier
5. No Accountability

We did some tests to see what the competition were offering - and I'll be honest - had I managed to find someone to do our tasks at half the price, I'd have offshored them in a second!!! We used two big outsource companies, a bid website assistant and a virtual assistant in Australia. The best results came from the VA in Australia but in terms of outsourcing stuff which had a tight turnaround the time difference was a real pain.

Here's my experience:
- Deadlines mean nothing. Even if you remind them constantly and get a cast iron guarantee, there will be no work. Or alternatively they will cobble something together at the last minute and you'll think "For the amount of time I've been hanging around waiting for this, I might as well have done it myself".
- the quality is fairly poor. I'd be embarrassed if we presented some of the stuff which came back. And at that point, I wouldn't have time to do it over and get it to the client.
- Constant micro-management needed. Here's where your idea is probably fairly good. The offshore assistants really need constant micro-management to produce anything approaching good work and if you've outsourced to save yourself time, you can't really do that.

Offshore assistants aren't really of use to me - and I can't imagine they would be much use to my clients either based on the results we got. It sort of put my mind at rest!!!

 

[da8iwr]

There is also a huge local economy issue with outsourcing.

The UK economy, is falling each day, and not doing well at all, mainly due to large foreign companies setting up being cheaper than local companies, due to lower wages in other countries and slave labour in some cases. They take the money to pay for the goods, usually made abroad, then what profits are left and would be kept in the local economy is shipped abroad.

Take for example supermarkets, they destroy the local retail chain, then what tiny profits they make is shipped away to either the South East of England or abroad in the case of Asda/Wall Mart, where it will stay for a very long time if not for ever. This then destroys all tradesmen, maintenance, shop fitting etc that would supply that retail industry.

Almost every penny you spend in Asda is sent out of the UK one way or other.

Its the same with web design and outsourcing, any uni graduates who are leaving uni at the moment are loosing out on jobs and income, as companies are willing to sacrifice quality and service over a few quid.

The reason India, China, Vietnam, and other eastern areas are booming compared to what they were, is because they are willing to do the work, and will not outsource. They keep what ever money they make and it stays in the local economy.

I know an entire website can be written about capitalism, and how it doesnt work, but outsourcing is possibly the worst form of this failure and over a very short time, it will show how much of a massive effect it has had on the UK economy.

As business owners, we have the responsibility of the UK economy, not the politicians we all like to blame, it is almost 100% down to us.

And sending the money and work to India, to save the cost of a night out on the drink, is not the way to do this.

 

[bridges]

That reminds me of that film, 'The high cost of low price' not entirely relevant here, but does show that we pay for being greedy in some way shape or form in the long run.

 

[tokyonine]

It didnt work for me at all. I tried it once (a web based coding job). Even though I person I was working with was talented, the small creative input they had was awful.

I know a bunch of people who use them for very straight forward work i.e. transcripting etc and swear by them.

 

[LBtrading]

I have some experiences with outsourcing and some good some bad!,

What you guys need to realise is in terms of IT ie web design seo etc then there are some very talented people in india and philippines.

Think about when you want to hire someone inhouse, do you just take the first one that comes along and hope for the best or do you have a long drawn out process of interviews refrences etc, also with a newly hired person do they perfom top notch right off the bat or does it take a few weeks to get used to how your company works etc.

its no different when outsourcing abroad first you will need to find good refrences of the person(not company) you are hiring and even then why not give them a couple of trial projects, also expect to invest two weeks to a month in initial training and refining to get to a point where they know what you expect,

the cost savings are massive BUT dont expect it to be easy and instant. Communication is everything as well as taking the time in the beggining to refine the virtual assistant,

also if you want a good English speaking assistant with the cheap prices then go for the philippines rather than india,

 

[craiga1971]

Another thing I noticed is that the outsourcing company were only interested in hitting the SLA. Previous to the outsource agreement, you would wander round to someones desk, have a chat, explain a problem and get an greement on an approach to fix it.

After the oursource occurs, this can no longer happen as they have a very clear distincition as to what is part of the contract (i.e. considered business as usual activity) and what is not. Obviously work on the latter can be charged extra for.

Before the outsource occured, if a major incident happened it was a all hands on desk approach to get it resolved. After outsource, it was a case of "We will respond within 1 hour" and "We fill fix it within 4".

As it was a retail business, the difference in lost sales could be massive.

In addition, the oursource company was huge (multi billion worldwide turnover) whereas the customer was small (<£250m turnover) So if the outsource company really messed up they could easily cause the company severe financial difficulties and the outsource company would pay very minor financial penalties.

A few months after the agreement started, it became apparent that the so-called dedicated offshore teams were not actually dedicated to the account. They were spread across other accounts, too. This is despite an assurance that this would not happen.

I remain to be convinced that something like IT should ever be outsourced. It is the backbone of most companies and I cannot understand why anyone thinks handing it over to another company to handle is in their best interest. Surely it is simply an admission of failure. We cannot run our internal systems effectively therefore we need external help to do it.

It was and still remains (according to people who still work there) a shambles.

Craig

 

[sabus]

Interesting thougts but nothing that hadnt crossed my mind earlier. IT is obivously just one example.
I do beleive that in order for outsourcing to work there has to be a healthy balance of internal/external support with checks in place to ensure value. A few of the conversations have lead towards a full outsourcing postion which is not what Im thinking more of a partnership to help "UK Support" functions meet targets and offer value for sevice.

Another question:
If you were to consider outsourcing certain elements of your business what would the role be and salary in £ you would pay if they were based in your office in the UK.

 

[yorkshirejames]

Makes you wonder why the big boys are still doing it thou! Savings can be upto 75%. I've been looking at this recently especially back office functions. Reason for the question is Im thinking of setting up a outsourcing facility with a difference...... a UK office dealing with clients here.... and UK management on site at the outsource location.

My understanding so far as to why outsourcing fails:
1. Lack of understanding
2. Lack of communication
3. No Knowledge of UK business market and requirements
4. Language barrier
5. No Accountability

Sabus, possibly we should have a conversation. I worked for one of the multinationals who outsourced a lot of back office processes, and I actually project managed a particular segment.

I agree with you that it can work very well, given the right circumstances.

 

[showtimeni]

I use a great outsourcing company based in Northern Ireland, they are cheap, easy to use and speak english.

They answer my phones, give me an office address, do my payroll, and complete customer callbacks.

This leaves me more time to make our products successful.

I would be happy to recommend them to anyone.