Category Archives: Offshore Captive Center
SEO of Offshore Captive Centers, Part 2: E for Establish
After we have discussed the first phase in building your company’s offshore captive center, we will now go over the elements to be considered in the second phase of the SEO for offshore captive centers. In this next level, the strategies and plans you made out in the beginning will be put into action.
E is for “Establish,” and this is the next phase in the SEO of building your offshore captive center. In this phase, your company’s strategy from the first phase is put into fruition. Proper channels and regulations should be recognized in this plan of action. With your captive center strategy laid out, it’s time to make your plans and operations more detailed and clearer.
Assign roles and responsibilities in the management of the operations. The team for the project should employ good governance and stick to regulations for the center. With the organizational responsibilities established, there can be a solid chain of command for the operations and processes. This will allow for the smooth flow of directions and procedures. It will also minimize any mistakes or miscalculations on the project.
With the management structure in place, it’s time to go down the organizational chart and take care of other details such as the infrastructure and staffing of the offshore captive center. With the infrastructure, make a detailed plan for office space. Don’t forget to consider sufficient office space, workstations, conference rooms, etc. You may also want to think about where to put the rest rooms, and maybe also a pantry for the employees.
SEO of Offshore Captive Centers, Part 1: S For Strategize
Business models of offshore captive centers have their own SEO when venturing into this line of business. This process is practically the basis of companies when they set up their own offshore centers on foreign countries like India and the Philippines (two of the leading Asian countries when it comes to outsourcing and offshore staffing). SEO means “Strategize, Establish, and Operate.” In this article, we will discuss the first phase of SEO, which is to strategize when starting your offshore captive center.
In making your strategy for putting up your company’s offshore business, you first have to consider if this plan is the best move for your company. There are companies that have not turned to offshore businesses because they thought that it would not be a feasible move on their part. Make it a point to go over the pros and cons of putting up an offshore staff before you venture out or your own offshore captive center. When you do make the decision, then the first step you have to make is to plan out and strategize.
Part of the strategy in setting up your company’s offshore captive center is selecting the right country and city for the operations. India is one of the top countries for offshore businesses, but other Asian countries, most especially the Philippines, is also gaining a reputation in this industry. In choosing a location, it would be wise to study the country’s economic growth (especially pertaining to the telecommunications industry) and the resources available to the company (especially the manpower and competence of the offshore staff).
Some Human Resource Challenges with Offshore Captive Centers
Developing countries have greatly benefited from first-world countries by means of offshoring and outsourcing. Because of high quality talent pool and low cost structures, countries like India, Philippines, China and Costa Rica have been the favorite destinations of large companies for offshore captive centers.
However, this kind of opportunity also presents significant challenges, mainly with the Human resource department. Every business has to realize that offshore captive centers carry challenges to management, including the key impacts of managing the organization, processes and finances of an enterprise. But what are some human resource challenges with offshore captive centers? Read on below to find out.
The Problems Of An Offshore Captive Center
With the boom of the offshore outsourcing industry many corporations are enticed by the lure of big saving and better services when they transfer many of their back room and customer service operations to business process outsourcing BPO companies.
With improved profitability experienced by these large firms some have been tempted by the possibility of eliminating the third party provider completely and set up an offshore captive center of their own.
Unfortunately the dream of greater profits bigger savings and even better services have all come to naught Except for a few exceptions companies who own offshore outsourcing captives these days are desperately getting rid of their subsidiaries.
Take Citi for example. Last 2007 the giant financial group sold their Indian BPO to Tata Consultancy Services TCS. Other companies have followed suit and a string of sales and transfers have occurred over the years. This makes one wonder what exactly happened. Why are potentially lucrative ventures not going anywhere at all? The answer according to Steve Mazek author of Software without Borders is the inherent characteristics of an offshore captive firm. If the parent company fails to take these into consideration then they will end up with a big drain to the resources. According to him captives tend to pay more for rent and furnishings than the locals. They lack institutional knowledge and they’ll need time to be efficient Captive centers also get a lesser share in IT outsourcing. Underutilized captive centers are more costly to maintain than their counterparts. Sending your own managers to begin set up is 60 percent more expensive than hiring a third-party provider.
Another thing is that small captives find it hard to get talent than do larger firms and third party companies.
And finally exiting the market is harder since it takes up to two years to shut down a captive Given these details it really comes as no surprise that parent companies are really in a bind Unless they are able to pull off a stunt that made companies like Exult a success then expect this trend on offshore captive centers to continue in the years to come.
