WHEN I FIRST started looking at outsourcing my business I was faced with a lot of opposition due to a lack of understanding about how offshoring worked and what the real implications were for my company. So, when I started this blog, I set out to accomplish two things: one, share information and insights about outsourcing, and two, debunk some of the false assumptions about it that close minds and opportunities.
Following are some of the most common outsourcing and offshoring myths that need to be put to rest:
Myth #1: Outsourcing is only for big businesses.
A lot of Australian small business owners have this idea that only big players can outsource or offshore. In reality, small business owners have the most to gain from outsourcing. When you’re just starting out, it’s easy to do everything in-house because your focus is dedicated to growing your client base and getting your business off the ground, but as your business starts to grow, so does the pressure and demand on your operations. To cope with additional compliance, accounting, and administrative tasks that come with expanding, owners end up working longer hours and/or hiring more employees. Both options have their downsides – the former gets you working in your business and losing sight of the big picture, whilst the latter leads to a host of additional costs and management time. A better way to cope with and sustain this growth is to outsource back-office tasks to an offshore site with cheaper labour so your onshore team can focus on the income-generating tasks and you can get on with working ON your business.
Myth #2: Cheaper labour equals lower quality.
Because the salary for employees in developing countries is much lower compared to that in Australia, it’s easy to assume that the quality of work will also be lower, but this is far from the truth. In the Philippines, there a lot of skilled and highly-qualified college graduates in the workforce, however, with several foreign companies looking to outsource in the country, there is stiff competition in acquiring the best talent. The key lies in carefully selecting a service provider that employs a suitable recruitment process that makes it possible to find (and keep) these highly talented staff that are currently out of reach for an Australian small business paying Australian wages.
Myth #3: The language and cultural barriers make doing business difficult.
True, the differences in language and culture present one of the biggest challenges in outsourcing, however, this challenge isn’t so great as to be insurmountable. A good service provider will have staff that have substantial experience working with foreign businesses and are already attuned to the business culture (especially in the Philippines with its close cultural affinity with the West). Naturally, there will be cultural nuances that would affect the way business is conducted, but these concerns are not enough to entirely impede operations if you are willing to understand the culture and work co-operatively with your offshore team.
Myth #4: The time difference is a problem because they work as you sleep.
To this I say, ‘what time difference?’ The time in Sydney is only 2 or 3 hours ahead of Philippine time (depending on day light savings) and Filipino employees are able to report for work two or three hours earlier than usual to synchronise work hours. Filipinos love working for Australian companies because the alternative is usually having to work the graveyard shift to meet the working hours of US companies. Time difference problem solved.
Myth #5: Outsourcing is guaranteed to instantly solve all your problems.
I often talk about how outsourcing transformed my tall ships business and led to astonishing growth. This is true, but all this did not happen overnight and it certainly wasn’t easy.When I was just starting out, I wasn’t familiar with the outsourcing industry and I didn’t have anyone to guide me through the process. What I know now about outsourcing and offshoring, I learned from a lot of hiccups and stumbles along the way. The point is, the benefits of outsourcing are up to how you set yourself up in the first place. I’m probably sounding like a broken record but I’ll say this again – outsourcing can unlock massive potential in your business, only if it’s done right.
When making an important decision for your business, such as deciding whether to outsource or not, it’s crucial that you learn as much information as you can beforehand. Still, we should be very discerning in processing the information we receive because there are bound to be some myths thrown into the mix. As always, my advice is this: see with your own eyes, ask questions, learn about the culture, and make up your own mind.