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9 Common Business Offshoring Mistakes


Offshoring success stories and case studies are everywhere. Sure enough, you’ve already heard of the immaculate benefits brought by offshoring. Some of these prominent promises are improved productivity level, efficiency, and a significant reduction in overhead costs.

But it’s also worth noting that Business Process Outsourcing or BPO providers often fail to discuss the major pitfalls Australian clients may soon be facing.

There is no 100% satisfaction rating over any business model, which means not every offshoring client is set to succeed!

In fact, some studies suggest that 36% of businesses claimed that their offshore strategy is a “failure”.

The reason behind this? Business executives would only rely on capital cost-benefit analyses to decide whether the company is ready for offshoring.

Not only that, most BPO companies are rather failing in educating Australian businesses about the right way to offshore. These shady topics associated with offshoring risks are often disregarded, leading to a dissatisfied business owner.

ShoreSuite does not shy away from these topics. Our goal is to help businesses find freedom through offshoring the right way and learn the benefits of working with an accounting specialist company.

So before following the offshoring trend and jumping right into the water, consider testing the temperature of your business first.

Offshoring Mistakes Businesses Commit

1. Failing to See Each Process’ Value

Not every job position can be outsourced to another country, regardless of how cheap the labour or how good the offshoring staff is.

Analyse the job positions first and look for the ones best set for offshoring before deploying to an offshore employee. Rank the value of each position to the overall business process instead of looking for a way to reduce labour costs. Seeing the positional value helps create a systematic strategy for the overall business process.

Each staff can contribute to the overall business process. Allocating an offshore staff has both its risks and rewards. For example, an accounting firm may opt to outsource its payroll administration service to a BPO provider as it would reduce massive overhead labour cost. It’s true that the rewards are great, but the overall credibility of the company can be at risk if the payroll administrator makes a few errors. The company’s services and reputation can easily be questioned.

2. Lack of Risk Analysis and Management

Oversee the probability of an operational risk after identifying which jobs can be allocated to an offshore team.

Operational risks may include a rough transition, difficulty to build the right expectations, lack of onboarding and training, the failure to see eye-to-eye with the cultural differences, etc.

The decision to offshore is a big moment for a business, regardless of size or industry. It is not an instant gratification that can easily be passed from one operating country to another.

You must avoid setting irrational expectations: offshoring promotes better productivity, efficiency, and lower labour costs. A detailed transition with clear-cut communication with the offshore team is a great player in mitigating the risks.

Say your accounting firm is looking to expand. The best way to decide which job positions will be outsourced is to run a thorough risk analysis. The processes set by the company can be broken down to identify possible threats and discover steps to best mitigate them.

3. Not Partnering with the Right Organisation

Find the right offshoring partner who respects your company’s culture and goals. This can help you promote mitigating the operational and structural risks you could soon be facing.

For instance, call center BPOs can’t provide well for accounting firms looking to outsource bookkeeping and accounting services. ShoreSuite, a company that specialises in accounting and integrating services can provide accounting firms better. The key is to know which type of outsourcing provider is the right one for your business and which one best suits your culture.

Remember: a BPO provider will not only serve as the second venue of your business but it will also be the daily environment of your offshore team. Which is why it is important to find a provider who, if does not shares, then at least respects your business goals and processes.

Visiting multiple BPO companies is also an ideal way to confirm your find before merging your culture into their services.

4. Lack of Understanding of the Local Government Regulations

Every country follows different labour laws and employment laws. BPO providers follow strict labour codes and regulations depending on which country they are established.

For example, BPO providers in the Philippines follow the labour code in the country. They offer competitive salary packages, pay government contributions, and provide additional benefits.

Familiarising yourself with the local government regulations helps you understand how to better compensate your offshore team. It also avoids conflicts regarding vacation and sick leaves which too often become a problem between the offshored team and their employer.

5. Not Picking Value over Price

As established, outsourcing and offshoring save businesses money due to the lower labour costs overseas. However, there are businesses that look for the most cost-efficient solution.

The value of offshoring can be minimised but shouldn’t become a hindrance in attaining the best possible offshored team that will aid the success of the company.

Haggling is another issue. BPO providers have set fair yet competitive prices that allow them to gain profit but still provide outsourcing services.

If you are looking for companies that can promise you competitive pricing and qualitative accounting services, screen a number of outsourcing companies and reach out to a few BPO providers. There are many providers specialising in accounting services that can provide you the services that you require.

6. Not Personally Interviewing Applicant

Assessing applicants shouldn’t just be the work of a recruitment manager. Hiring managers and employers should take the opportunity to personally assess applicants during the hiring process.

The goal is to hire skilled personnel whose values and personality align with yours, your team, and the company. Handing over the responsibility of assessing the applicants to the recruitment team lessens the possibility of obtaining the perfect candidate for your company.

Note that the hired personnel will have to work and communicate with you and your team. If the offshored personnel can’t collaborate effectively with everyone, the business will suffer. The quality and the timeliness will be affected due to the lack of cohesiveness between team members.

In accounting, bookkeepers work hand in hand with accountants. Outsourcing bookkeepers would mean that your on-site accountants would have to collaborate with them. Though the recruiters did a great job hiring a qualified professional on your behalf, there is no guarantee that the employee’s personality will complement in with yours and the team.

7. Lack of Commitment to Oversee Outsourcing Operations

Many companies outsource staff overseas thinking that the responsibility of overseeing the outsourcing operations of their businesses fall under the obligations of the BPO provider. That’s wrong. It’s the responsibility of the BPO provider to equip the outsourced employee with the tools to deliver the tasks and to provide them with a great working environment.

The obligation of overseeing the operations of the business and the responsibility of ensuring the personnel meets the business goals are on you as the employer. For example, setting KPIs and training the staff are the responsibilities of the accounting firm who outsourced them.

Treat the outsourcing team as the extension of your business because they are. Handle the team and communicate openly with them.

8. Failing to Establish Open Communication with the Staff

Failing to communicate with the offshore staff is one of the biggest downfalls of companies when outsourcing. As there is a big distance between the company and the outsourced employees, it’s important to establish the right communication channels.

Ensure that the offshored team is always in the loop and in constant communication with the whole team to mitigate misunderstandings from happening.

Be mindful of the way your team communicates with you as well. Most Filipinos tend to be more reserved and think highly of company hierarchies, as compared to the relatively casual work manner of Australians. Create a middle ground between your local employees and your offshored team as cultural differences play a part in the manner of how one communicates.

9. Micromanaging

Avoid micromanaging your staff. It can create setbacks within the business.

It can be tempting to micromanage especially when there are many factors that call for it: distance, cultural differences, etc. To prevent micromanaging, clearly define tasks, and responsibilities of the outsourced staff and set them to the same standards as the other workers.

For instance, ShoreSuite professional bookkeepers need less supervision in their tasks. ShoreSuite employees are licensed for their experience and expertise. Hovering over them and telling them what to do will only create complications and friction. The onboarding and training they will need to take will be for your SOPs and company policies, for most times.

Offshoring, despite its truly remarkable business advantages, has its own risks and dangers that BPO providers typically avoid in a discussion. Consider analysing offshoring and outsourcing from a different angle. Check how it could fit your unique business model instead of simply following the growing trend.

Contact us now for an in-depth consultation on how to leverage offshoring specifically for your accounting business.