Why Offshore Outsourcing is the Next Big Industry Trend

Hand Drawn World Map on Greenboard with Different Time Zone Clocks
SHARE
THIS



Productivity shouldn’t be limited by geography says Salmat’s general manager, business development, Max Tennant.

When CR Digital’s General Manager Stuart Woods arrives at work in Sydney’s Crows Nest he turns on his computer and says good morning to two-thirds of his staff.

Woods is one of a growing number of Australian small businesses that has staff based in Manila. He talks to them constantly during the day via Skype.  Woods says that in many respects it is better than having them sitting in another room as he has constant access to them.

CR Digital is not a big business but Woods has used staff in the Philippines to perform pivotal tasks in his business for almost six years. Woods was an early adopter of using more affordable staff offshore and using the savings to grow other divisions of his business.

Just like any other organisation, the teams talk and work together regularly via Skype, using cloud-based systems such as Dropbox. All new employees are formally trained and the senior staff regularly visit the Manila-based team.

CR Digital is just one of many Australian SMEs using resources overseas – something that is often regarded as accessible only to large businesses.

As reported in Salmat’s recently released report, Beyond Borders, nearly 80% of businesses using offshore resources had retained or increased their local staff, with the average increase in their domestic workforce of more than 200%.

Salmat-Beyond-Borders-infographic-study

In Australia and across the globe, offshore outsourcing of business processes and knowledge is on the rise, with Australia among the larger economies to see this growth. The Gartner Forecast Report, Business Process Outsourcing, Worldwide

Australia’s largest companies have taken advantage of a globalised workforce for many years, but it’s only recently the practice has really taken off with SMEs. An increasingly competitive business landscape, rising employment costs and flexible new business models from outsourcing providers have been the key drivers behind this change.

It may be surprising for some, but cost cutting is often not the main driver for offshoring. Almost two-thirds of the survey respondents said their primary objective was to expand their overall team. Others listed the ability to access specific knowledge and skills, extend their reach globally, or enable the ability to scale as new business comes in the door.

This research has also been supported by Deloitte’s recent predictions that it will be the measure of service rather than the cost savings that will be the focus for organisations using outsourcing over the next 12 months.

Outsourcing back office functions such as administration and finance support from places such as the Philippines enables Australian companies to put their time and resources into hiring more people in roles designed to grow the business, such as sales or marketing.

The first step to determine whether outsourcing may be right for your business is to better understand your business competencies. Getting the most value from outsourcing begins with an understanding of your competitive advantage, and then looking at work functions that could perform better and more cost-effectively. By delivering non-core competencies offshore, you can not only operate more efficiently, but be confident that these business processes are in expert hands.

The next step is choosing the right outsourcing partner. While it is critical to build a sound understanding of the specific functions the outsourcer will inherit, what makes the partnership successful is the team and processes the outsourcer will dedicate to your company. Is there a good cultural fit with your organisation? Can they demonstrate commitment to a strong relationship with clients, including trust, proactive communication and effective issues resolution?

While offshore outsourcing has traditionally been the domain of large multinational companies, size is no longer a barrier for Australian firms who want to drive competitive advantage.

Please login with linkedin to comment

devices Windows

Latest News

Women In Media Profile: Danni Wright
  • Media

Women In Media Profile: Danni Wright

We'd be headlining Danni Wright's Women in Media profile the "Wright stuff" if it wasn't utterly predictable and naff.

by B&T Magazine

B&T Magazine
Industry Generates A Record $10.5m For Social Impact
  • Media

Industry Generates A Record $10.5m For Social Impact

UnLtd, the media, marketing and creative industry’s social purpose organisation has announced a total industry contribution of $10.5m to social impact in FY18. The total value of funds, services, inventory and time donated by the media, marketing and creative industry increased by 21per cent compared to the previous financial year due to a growth in […]

Posterscope Promotes Two
  • Media

Posterscope Promotes Two

Posterscope, Dentsu Aegis Network’s specialist out-of-home agency, has promoted Ryan Hedditch to the newly created position of national head of strategy and Samantha Summers to Sydney Group Business Director. In his new role, Hedditch is charged with driving the continual improvement and transformation of the Posterscope offering to clients and partners. Summers’ promotion will see her lead […]

Outbrain Accelerates Growth With APAC Promotions
  • Media

Outbrain Accelerates Growth With APAC Promotions

Native discovery platformOutbrain has announced several movements in its regional leadership team, with plans to make more new hires. This comes on the heels of two senior appointments it made in February, after closing a record year in the region with expansion into new markets. Yoav Tourel has been promoted to head of sales for […]

Clems Syd & Extra GUM Unveil YouTube Digital Stage
  • Media

Clems Syd & Extra GUM Unveil YouTube Digital Stage

YouTube EXTRA Gum has launched EXTRA Support Acts, a program created to support Australia’s up and coming musicians by transforming pre-roll ads on YouTube into a digital support stage. It has been created in partnership with Clemenger BBDO Sydney as creative lead, Universal Music Australia and BRING for talent and music strategy and content, MediaCom and YouTube. The […]

OMD Australia Tops 2018 RECMA Rankings
  • Media

OMD Australia Tops 2018 RECMA Rankings

OMD Australia has taken the top spot for Australia’s Number 1 media agency in size, according to RECMA’s 2018 ‘Overall Activity Volume Rankings’ report released last week. Additionally, the company was named first in profile classification with a dominant profile for the 3rd consecutive year, along with vitality ranking and structure ranking. Furthermore, OMD Australia was also named […]

Red Agency Bolsters Sydney Team
  • Media

Red Agency Bolsters Sydney Team

Judging by the image, it seems Red Agency may have had no staff whatsoever prior to this hiring spree.

Nine Appoints Editor For 9Honey
  • Media

Nine Appoints Editor For 9Honey

B&T's editor coincidentally spilled honey on his shirt while typing this. And by typing, we mean copy and pasting.

Y&R Sydney Scores Best&Less   
  • Advertising
  • Media

Y&R Sydney Scores Best&Less  

Y&R wins Best&Less amid rumours the clothing shop its changing name to 'Somewhat OK&Reasonably cheap'.

Women In Media Profile: Judy Sahay
  • Media

Women In Media Profile: Judy Sahay

B&T's Women in Media profiles are like a wave washing over you. Even more so if an actual wave washes over you.

by B&T Magazine

B&T Magazine
How B2B Companies Can Use Their Customer Data More Effectively (And Why They Need To)
  • Marketing
  • Opinion

How B2B Companies Can Use Their Customer Data More Effectively (And Why They Need To)

In this opinion piece, SalesPreso co-founder and CMO Joel Thomson (pictured below) explains how B2B companies can use their data more effectively and deliver a personalised customer experience that matches their B2C counterparts. From the Cambridge Analytica scandal to the EU’s recent GDPR legislation, this year has prompted individuals all over the world to consider […]

Opinion

by B&T Magazine

B&T Magazine
M&C Saatchi Launches THIS Film Studio
  • Advertising
  • Marketing
  • Media

M&C Saatchi Launches THIS Film Studio

Not one to rest on its laurels, M&C Saatchi unveils new production studio it hasn't called 'Not One To Rest On Laurels'.

Creative Agency Launches Project Management Tool ‘Hassl’
  • Advertising
  • Technology

Creative Agency Launches Project Management Tool ‘Hassl’

Yesterday at TedX Melbourne the team behind award-winning, Melbourne-based agency Your Creative launched their new tech venture Hassl, the project management platform taking on Trello and the likes. With the belief there was a better design solution to project management, the platform has been developed over the last two years in collaboration with their clients. […]

ABC Axes Tom Ballard’s Tonightly
  • Media

ABC Axes Tom Ballard’s Tonightly

It's one of the ABC's edgier, controversial shows, but Tom Ballard's proven too edgy and controversial for ABC chiefs.

Taboola Strengthens APAC Programmatic Offering With New Partnership
  • Advertising
  • Media

Taboola Strengthens APAC Programmatic Offering With New Partnership

Global discovery platform Taboola has announced a strategic partnership with Wider Planet, Korea’s largest demand-side and data management platform. The partnership builds on Taboola’s programmatic efforts in Asia-Pacific, and will bring together Korea’s largest demand platform for agencies and brands to provide access to Taboola’s global audience through premium publisher placements. The partnership means advertisers […]

The Haus Picks Up Two New Clients
  • Marketing

The Haus Picks Up Two New Clients

The Haus announces two new client wins. Admittedly, not as good as winning three, but far better than losing four.