Can you trust offshore services?

How to Make Sure Offshore Service Providers Work for the Business

When it comes to offshore services, there are benefits and obvious risk. The first victim is usually trust. How can a company rely on a group of individuals thousands of miles away? Take outsourcing with a grain of salt – and learn how to make it an advantage, not a liability.

The Pros & Cons of Using Offshore Services

Like any business operation, choosing to engage with offshore services has its own risks and benefits. Furthermore, there are a litany of tales on both sides, ranging from encouraging to horror-movie-worthy. A reduction in manufacturing or IT costs (depending on the product or service) is an obvious perk and one that can be passed on to a (rather delighted) end-user or consumer. This trickle-down effect touches many spheres such as better controlled costs, releasing capital to be invested in R&D or other revenue-producing opportunities. By outsourcing to specialists, the company can better focus on improving their core business activities. And, yet, companies must consider the downsides: a possible decline in worker productivity in the first year, as the transition is being made, possible high turnover of key personnel in the outsourcing company, a sometimes stark and unavoidable difference in culture, IP and data security vulnerabilities and, at worst, a failure to deliver.

Protecting the Business While Reaping the Perks of Offshore Services

The linchpin in building trust during an outsourcing experience is to have an ironclad contract, since this would allow companies a sense of protection that is legally enforceable and binding. Working with multiple vendors and a having thorough vetting process will allow companies to be in control of the process. A contract, with a system of contractual checks and balances that can anticipate possible pitfalls and address each party’s rights, can help build trust. This is because there is clarity and transparency, rather than convolution and miscommunication. For example, considering the risk of change-related costs to the economic viability of the service agreement, payments in case of termination or a failure to deliver services – these three cases are just some of the broad clauses a professional legal team can draft a specific contract to protect.

The goal of introducing offshore services for the business should not be to attain the mythical “4 Hour Workweek”. The truth is that outsourcing can entail a lot of upfront work and, even when the transition is more or less complete, involves much ongoing communication to ensure everyone is on the same page. It can also mean the company, now free of some time and capital, can devote its attention in an even more focused way.