Offshoring business operations offers the potential for cost savings of 15 percent to 20 percent, but Compass analysis show that organizations that properly plan and operate offshore initiatives can reap substantially higher rewards.
Organizations that focus on short-term cost reductions often rush through projects without adequate planning, due diligence or consideration of the long-term implications of the inevitable changes in business requirements or offshore market conditions. In many respects, the mistakes organizations make when implementing and managing offshore initiatives can be understood in the context of the seven deadly sins: pride, sloth, avarice, lust/extravagance, envy, gluttony and anger.
1. Pride
Many organizations succumb to the sin of false pride and plunge headlong into an offshoring initiative without performing due diligence. They assume they have the internal capabilities to create and govern an offshore operation, but they seriously underestimate the management resources needed to set up and run such an operation. This contributes to poor productivity and communications, and to missed cost savings and improvement targets.
