In today’s business world being reasonably good or even just above average is no longer enough.
Without a clear business strategy that works to your strengths, you risk being what renowned business strategist Michael Porter called “Stuck in the Middle”. In other words, you attempt to be everything to everyone. And as the story goes, the only thing in the middle of the road are white lines and road kill.
But that shouldn’t deter you from finding a perfect middle ground to offshore aspects of your business and stick to your strengths – which is precisely where managed operations comes in.
In the past companies thinking about establishing offshore operations had only two options: outsource work to a third party provider or set up their own offshore operations.
Both come with risks. Outsourcing comes with the potential to lose intellectual property and perhaps compromise the quality of work being offshored. Then there’s the increasingly tight government and industry regulation, both at home and abroad.
Incorporating or starting an offshore subsidiary, on the other hand, ensures operational control, but presents a new set of challenges, including higher up-front capital costs, longer time frames and the need to navigate unfamiliar legislation and cultural differences, to name a few.
Managed operations, however, provides a third option. In a new approach to offshoring, the company and offshore service provider work together to manage the day-to-day operation. The client chooses the degree of operational control. As such, it’s an approach that delivers flexibility and agility, and addresses the inevitable question of control:
Question: How can we gain control over day-to-day operations?
There are many reasons why you need to control your own operations on a day-to-day basis. The managed operations model can be flexed to give companies a choice of operational control according to your needs and preferences.
At one end of the spectrum, you can establish an expat team to oversee the offshore team. At the other end, the managed operations provider can manage the offshore team on your behalf, providing complete transparency of operations. The right option for your organisation will depend on the type of work being undertaken, the size of the offshore team and many more factors.
Question: How can we protect our intellectual property and keep sensitive data confidential?
If recent media stories about Ashley Madison and the like are teaching us anything, it’s that protecting intellectual property and securing sensitive data is paramount.
With traditional outsourcing, it’s difficult to ensure that every possible step is being taken to protect your IP and data. However, with managed operations model, you can manage and oversee the processes.
Question: How do we meet our industry’s stringent regulatory controls?
Many industries, such as finance and healthcare, are subject to stringent regulatory controls, which make it difficult for companies to outsource aspects of their work.
A managed operation allows companies to establish their own level of operational controls, which meet the government or industry regulatory measures.
Question: How can we ensure a consistently high quality?
Many companies are concerned about an offshore service provider cutting corners to achieve targets. They want controls in place to ensure the quality of staff and the ability to get involved in ongoing performance management.
But how do you take your skills in recruitment and performance management to an offshore environment when you don’t know the local employment market?
Working with a managed operation provider provides the best of both worlds. The service provider leverages knowledge of the local labour pool and works together with the client to select staff and establish the performance management framework.
The service provider will source a pool of skilled staff and work hand-in-hand with the client to select the best candidates. Then, the service provider and client will work in tandem to control the quality of staff for ongoing recruitment needs and performance management, including the all-important KPI fulfillment.
Question: How can we control costs and growth in an ever-changing economic environment?
Many businesses are subject to seasonal or other variations in demand for their products or services. The managed operations model provides flexibility that incorporating your own offshore subsidiary cannot, by enabling businesses to scale operations up or down to meet demand.
This model is particularly pertinent to start-ups that need speed, agility and responsiveness to match the growth of a new business, as well as any company experiencing a period of expansion.
Incorporating your own offshore subsidiary can involve a big capital expenditure and a long wait for a return. Meanwhile, the company is locked in for the ride regardless of any changes in external factors. Whereas, a managed operation, with the controls established by the client, is the perfect stepping-stone across potentially unknown waters.
Moving into cruise control
Once companies have established their first managed operation, it isn’t long before they’re thinking about the future.
Already up to speed with the ease of a managed operations service, you’ll be in cruise control. You’ll be encouraged by the added control and won’t want to restrict your offshore operations to non-core functions. Instead, you’ll be ready to look at how you can stretch the model to service multiple segments of your business.
Incorporating offshore managed operations into your business opens up a whole new world of opportunities. And, for once, you’ll be glad you chose the middle ground.
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