Finding a balance between onshore and offshore vendor resources is an excellent way to maximize productivity and find budget efficiencies. But it’s important to keep in mind that onshore vs. offshore is not an ‘apples to apples’ comparison. While onshore resources often possess key business knowledge and additional intangible skills that will help get the job done effectively and on time, offshore resources tend to have a lower price tag. The key is to leverage the benefits and skills of each group to strike the appropriate balance between efficiency, accuracy, and cost with the most favorable outcome, a successful project.
Your company’s budget is like the air inside a balloon animal. The amount of air is fixed, but it is distributed differently depending on how much pressure is applied – when you squeeze one end, the other end gets larger. The same goes for your company. When you employ less expensive offshore vendors you may think you are saving money. If they do not have the right resources or right skillset, you will have gaps that result in project delays and cost overruns.
There are pros and cons to each model. The challenge comes in determining which tasks are appropriate for which resources to strike the delicate and complicated balance between onshore and offshore vendors. By benchmarking the pace of input and output to see how fast work is getting done, knowing the details of the solution, and considering time zones and flexibility when making resourcing decisions to maintain workflow productivity, your company will receive the maximum value from your vendor relationships – and avoid popping the balloon animal.
Understanding the situation
When trying to determine the blend of onshore and offshore vendors make sure you understand your organization, the project and its needs. When you have well defined processes, requirements, and objectives for your project, you can improve your chances of success with a higher percentage of low cost (often offshore) vendors. Offshoring has evolved to have an onshore leadership component to help effectively drive the work offshore, however, that usually means that you have only a few highly skilled resources driving the solution. In cases where there is strategic thinking and solutioning required throughout the work product lifecycle you will be more successful with a higher blend of higher cost (onshore) resources that have the necessary business knowledge to ensure delivery of a solution that lacks some clarity.
Assess the situation by understanding the clarity of the solution requested and the depth of technical and business skills required. Planning upfront is critical to the timely and successful delivery of your solution.
Know your company culture and SOP
When it comes to your organization do you tend to build from a napkin and evolve your solution or do you have strong processes and expectations upfront for project requirements and objectives. We find that often projects operate much like the company. If you tend to be more flexible and reactive you will require a higher blend of more costly resources to be able to think strategically and evolve the solution. Those companies that have strong processes and business cases defining solutions are usually more effective in leveraging a higher percentage of offshore resources. We can help you define where you are on the spectrum and help you get to your desired state.
Balance your vendor locations
When it comes to sourcing multiple onshore and offshore vendors, time zones should be considered to maximize productivity. Establishing relationships with vendors in multiple time zones provides the ability to have extended hours and therefore complete more work each day. For example, when your company in Atlanta, Georgia employs a resource in New Delhi, India, the workday extends from 8 hours to 16 hours. Offshore resources are working while your employees stateside are asleep and visa-versa.
Benchmarking input and output
Choose thoughtfully what work you outsource to offshore vendors. An extended workday is only an advantage when the work is done well. It’s important to keep in mind that offshore vendors don’t always have the same quality control that onshore vendors do. A downfall of less expensive labor is the potential for lack of quality and prolonged timelines.
Start by benchmarking the pace of onshore and offshore vendors to understand the value each resource provides. By gaining insight into what work is getting done by who and at what speed, your company is able better understand how to more efficiently allocate tasks.
Vendor flexibility
Offshore vendors don’t always have the luxury of working flexible hours. Often these resources cannot work from home because they work on desktops rather than laptops. Sometimes their physical work locations require them to check personal items at the door for security reasons. The inability to work remotely, coupled with security constraints, can cause business interruptions and slow down workflow.
Collective Insights is your partner in strategic selection
The question isn’t offshore vs. onshore, it’s about using both kinds of vendors to maximize efficiencies. There is no cookie-cutter formula to determine the right balance of resources, but Collective Insights partners with you to ensure your vendors are efficient and provide the quality work within the budget and time constraints. Your employees are busy and don’t have time to manage the balance of resources. Together we can strike the right balance for your business.
Click here to learn more about how we help our clients excel.