A rule of thumb: "Offshoring projects will cost 4 times less but take twice as long to complete."
The notion of saving up to 70% of labor costs can be very enticing, especially in tight economic times. However, offshoring can be a daunting endeavor and one that can almost as easily waste money as save it. A poorly executed attempt can also have a ruinous effect on an in-house team and even tarnish a company's long-term brand. According to Information Week, "two-thirds of companies report either no change or a worsening in customer satisfaction as a result of business-process outsourcing." And a 2005 Gartner study found that 80% of companies that outsource fail to meet their cost-savings targets.
So no one should contemplate offshoring creative activities without significant research and planning. Here are some suggestions from others who have paved the way.
Know why you are going offshore. Keep a laser focus on your objectives. Throughout the planning phase, validate decisions against these objectives. This will help answer the questions around what to outsource and where (India, Ireland, or Central/South America).
Choose an experienced partner you can trust. There are a lot of companies vying for your work. Some of the best advice I ever heard regarding which company to choose? "Process cannot replace trust." Check out the companies, their clients, their references, their QA, everything. If you can't develop a gut-level trust they will consistently help you meet your objectives, move on.
Focus on core capabilities. When determining what will be sent offshore, divvy the work up based on what the offshore team does often and well. Usually, that means the highly templated work, the routine production tasks (like converting Quark to InDesign documents or dropping pre-approved text into pre-approved design templates). You will want to keep the complex and strategic work close to home.
Pilot the initiative. It is always wise to start small -- to test the relationship, the processes, and the output before committing to a long-term contract.
Plan, plan and plan some more. Understand when and how you are going to measure success. Set up a contingency plan for when things go poorly. Determine how you will redirect resources if you decide to shut down the grand experiment. And build Plan Bs and Plan Cs for everything. Assume everything will be harder and take longer than is conceivable. Build that into your plans.
Contract for services. Your contract should be highly detailed. Stipulate the scope, schedule and development processes as well as your expectations. Include a Work Breakdown Structure. Establish which meetings are required. Most offshore projects are paid on a time and materials basis but consider setting up a structure that requires the offshore company to assume some of the upfront risk. A modified royalty system, for example, may work.
Manage the project professionally. More than anywhere else, offshore operations need to be managed closely. Develop rigorous protocols and procedures. Monitor performance frequently and address issues directly and concisely as they arise. Avoid taking shortcuts at all costs.
Nurture those close to home. Offshoring is always scary for an in-house creative organization - and even for their customers. Take pains to take care of both. Understand the fears. Explain early and often why your plan makes sense and how projects will be sent out and managed. Reinforce the important role that the in-house team will play. Reassure the customers that they will still receive the quality they have grown accustomed to receiving.
Take care of those abroad, too. You want to minimize turnover, which is often high in offshore shops. So provide clear expectations and guidance as well as frequent feedback, respect cultural differences, and foster a sense of community and connectedness whenever possible.
Integrate the local and offshore teams. Most companies new to offshoring assume they can and should keep the two teams completely separate. But experience has proven that setting up the offshore operation as a fully integrated extension of the in-house team actually works far better. Encourage interactions, collaboration, information and joint projects - just keep the roles and responsibilities clear as you do so.
Separate development and QA. These are two different skills, and it is always better to have someone other than the originator check for errors. So make sure you have professionally trained quality assurance staff checking the work of the designers and content developers. This is perhaps one way to have the local and offshore teams work together.
Invest in success. Put someone on-site as a program manager to ensure the success of the transition and ongoing production. Necessary skills include organization, communications and people management. Also make it easy to send people back and forth between the local and offshore organizations. This will not only facilitate conversations around organization and process but help improve overall relations.
For information about how Cella can add value to your business through consulting, coaching, and training, please email [email protected].
Cyndi Urbano is a consultant with Cella Consulting, a traditional management consultancy focused on optimizing in-house creative operations. She brings her clients a wealth of experience in strategic planning, financial management and personnel development based on her 20-plus years managing creative teams. Most recently, she headed up a full-service in-house agency with more than 100 staff in 3 locations. She currently lives in Ashburn, VA with her husband and daughter.