Every year, companies face challenges on adapting to foreign cultures and learning legal processes that would allow a smooth and hassle-free relocation of essential functions abroad. One of the more recent reasons for this occurrence is offshoring, in this case sometimes of executive leadership solutions.
There are many things as to why you should consider offshoring to a location like Vietnam, especially when the process is a strategic substitute for in-house operations. Similar to outsourcing, the term ‘offshoring’ has been receiving mixed reactions, but how is it really done? Are there challenges along the way? Could they be resolved?
What are the Challenges?
The Harvard Business Review has identified three challenges that lead to the failure of some companies who have off-shored their services to other countries. The common thing to consider with the problems that were raised is how the offshoring strategies were formulated.
Here are the three challenges identified by the review:
- Rarely evaluating processes that need to be off-shored
While most companies put more efforts on choosing the location and prices of the services to be off-shored, they rarely think of and evaluate what processes actually need to be off-shored. Offshoring processes then bringing them back in-house after realizing that it is expendable is wasteful, as it takes up the time and the energy for doing more useful work.
What companies can do is identify the processes involved in their day to day operation and categorize them as the core processes that must be controlled by the company itself, critical processes that could be bought from the best vendors, and commodity processes which could be off-shored. Undergoing this process enables the company to make less of the wrong choices.
- Not taking into account all possible risks
Using simple cost-benefit analyses also puts limits on how executive leaders can consider other options for decision-making.
For example, such analyses cannot identify the aftermath of the transfer process whenever vendors gain the upper hand and demand for price hikes. It can lead to the dissolution of the actual value saved from offshoring.
- Not realizing that the process is not an all-or-nothing situation
Most of the time, companies do not see that they now have many other options apart from doing things in-house entirely, as well as totally giving away processes to service providers.
Among the extensive choices that can be made include outsourcing from local service providers, entering joint ventures, or setting up their own contact centers overseas. When they fail to consider these options, they use organizational forms that are not at all what they need.
Even when conducting the transfer of services with the smartest organizational structures, most companies ignore aspects related to cultural differences. This has the tendency to affect the strategies and plans of the organization if they want to succeed in their offshoring venture.
The reality is this – the significant differences in the culture-affected behavior and legal methods of engaging in work has created a gap between most offshore teams abroad and the local staff at home.
Since the success of a company depends on the performance of their offshore staff, companies have been struggling to narrow the gap and the differences between the local and offshore team. This, along with the extension of their processes to another culture, will entail the presence and diligence of prime executive leadership from within the company.
Culture as a Carrier of Success?
Focusing on the non-economic and human aspects of offshoring are also effective strategies which could help ensure success. Offshore Outsourcing World has identified that in offshoring, “culture carries implications more complex than mere differences in the language of time zones. It is something no software can totally address”.
This is very true, as making local and offshore processes interwoven imply the need for better offshore strategies from companies. Thankfully, various approaches could be adopted which focus on the transition of companies to having offshore counterparts.
Companies need to ensure that the offshore team is at par with the local staff when it comes to knowing what products and services are for, especially when interactions between managers and employees can change substantially.
Knowing employee culture is important, especially in the case of Vietnam. Top headhunter companies in Vietnam say that Vietnamese work culture has high regard for hierarchy in the office setting and relies on a heavy top-down management style.
Aside from the offshore employee culture, taking into account the ongoing culture of the local staff will significantly help in informing them of the offshoring plans and what it will mean to them. Maintaining trust is very crucial in this process, especially since the local team is essential in supporting and driving your future business strategies.
Four Strategies for Offshoring in Vietnam
Here are four changes that will tailor-fit your offshore strategies in Vietnam:
- Make use of the time-zone difference and recognize how time and distance could affect the business processes.
In offshoring, the presence of time-zone differences is usually taken as compromises and as a bit of inconvenience. However, time differences could be used to your advantage, particularly to the benefit of your operations. Putting up an offshore team with the help of top recruitment agencies in Vietnam allows you to maximize your time, with the local team fast asleep while the offshore team is doing their development jobs.
Simultaneously, the Vietnam team will be able to send a status report by the time the operations at the local office begins. Reviewing their progress would be less of a hassle since updates and instructions for the next day could be sent to and left waiting for the offshore team. This will affect the business process in a good way, not allowing the big differences in time and distance stunt productivity.
- Create clear and understandable product visions
Product visions include the overall goal you are trying to reach as well as the reason why you have created the product. This gives long-term direction, especially when set with milestones that should be obtained in the short-term.
In this case, one vision that is important for every staff to understand is why there is a need for offshoring. Having a specific set of scope and goals gives both the local and the offshore team not only opportunities to become more familiar with the products and services but also personally connected.
This will make collaboration better. It can also be a source of motivation in the future when times get tough. Transparency in metrics should also be established, along with the identification and sharing of best practices around the globe.
- Make use of different channels of communication
Creating an organizational structure that would allow the flow of information from bottom-up and vice versa is very important to ensure that employees at all levels have been reached. Aside from meeting important positions in the company, offering the use of multiple technologies is also efficient.
Virtual communication is one way of doing this since there will always be limits set by the infrastructure differences. Various ways to do this include online teamwork platforms, video conferences, and online meetings, among others. Even when all seems fine with virtual communication, visiting the offshore team for team meetings will also make a huge difference in the way offshore employees see the overall vision of the company.
Creating a sense of community in the workplace is very important, especially for the Vietnamese who put great value on inclusivity and sharing of ideas. To be able to do this effectively, some team members on the local side of the business should be able to understand Vietnamese and vice versa. Relying simply on online translators is a big step towards miscommunication. It may lead to the failure of workplace collaboration and eventually of the company.
- Make yourself reachable by staying involved in the project
This does not mean being there all the time, 24/7. However, this does mean that there should be people in charge who can easily be accessed by the staff, especially by the offshore team.
This will reinforce the feeling of being one team working towards the same goal – identifying risks, working with the developers, sending out congratulations, and giving everyone a boost for their morale. Creating this sense of community in the offshore workplace can be very motivating for Vietnamese workers as they value loyalty very much. They become more empowered to be part of the company’s global team.
Offshoring in Vietnam
Offshoring in Vietnam is a strategic move to make. Not only does the process offer a considerable advantage of time, reduction of costs, and more efficient delivery of outputs, the country also has highly skilled workers with a lot of potential as an offshore partner.
If you are thinking about offshoring or outsourcing, then you must take note of the things we have mentioned above.
Curran Daly and Associates are constantly on the lookout for new and up-to-date hiring strategies in a fast-paced industry. They are one of the top recruitment agencies in Vietnam that help companies, both local and abroad, to find the best skills needed for essential tasks and functions.
Drop us a line if you want to get started and talk to one of the top headhunters in Vietnam!
Aron, R., & Singh, J. (2005, December 1). Getting offshoring right. Retrieved from https://hbr.org/2005/12/getting-offshoring-right
Curran Daly and Associates. (n.d.). Talk to best headhunters in Vietnam. Retrieved from https://currandaly.com.vn/contact/
GKTA Group Limited. (2014). Vietnamese work culture. Retrieved from http://gktagroup.com/vietnamese-work-culture/
Leri, P. (2010). Outsourcing & offshoring: Tips for global enterprise success. Retrieved from https://www.aperianglobal.com/outsourcing-considerations/