For most companies, a wisely pursued offshoring initiative can be a key strategy to remain competitive and strengthen their position in the market. However, the Transition stage in offshore outsourcing, from traditionally managing all business functions onshore to handing over some business processes to a service provider offshore, is a time of intense change. And, while every transition is different because there are multiple variables involved, experienced outsourcers will be quick to tell you that no offshore outsourcing transition is simple.
Managing transitions is not only one of the most critical times in the lifecycle of any outsourcing relationship; it is also one that can be fraught with challenges. For one, the old ways of working will no longer be appropriate under an outsourcing arrangement --- more importantly, if the new team is located offshore. New work flows, communications, paper flows, and sign-offs are required to ensure a united and efficient interaction with the remote team. Likewise, new relationships will need to be quickly formed, and people accustomed to a certain way of operating will now need to operate in a completely different manner. Clearly, this is one of the crucial stages in the relationship and therefore needs close examination.
Nevertheless, when done for the right reasons, and with the right expectations, any transition can deliver returns far exceeding the time and energy invested. When well executed, an effective transition from conventional business operations to offshoring can unlock the value of an outsourcing engagement, thereby laying the groundwork for a relationship that can last for many years. The trick is to recognize not only obvious organizational barriers to progress, and managerial tactics that can aid it, but also to address the blind spots transition teams often develop.
Why Focus on Transition?
According to the 2016 Global Outsourcing Survey, the transition process is one of the things companies need to “get right the first time.” Companies need to invest additional time during the initial stages of the relationship to make sure that value is achieved throughout the process. In the same manner, paramount attention should be given to this stage to ensure realization of benefits within and beyond the terms of contract.
While common reasons for outsourcing failure range from cultural differences, language barriers, unclear scope of work and accountabilities, to unmanaged expectations and inability to cope with time zone differences, offshoring experts are quick to point out that these risk factors can easily be addressed by having a transition plan in place.
