How do you overcome the impact of lower productivity in offshore operations undermining your operating costs?
This case study covers how we helped to improve significantly the efficiency of Offshored back office operations. Many firms turn to offshore back office and call centres to reduce their operating costs (effectively through applying labour rate arbitrage) however firms frequently overlook the opportunity for further gains through increasing the efficiency of the offshored operations.
Key back office operations and IT support areas for both internal & client operations had been moved offshore to Bangalore. The initial labour cost savings were welcome and initial quality issues had been overcome by improved process management and training investments.
However, disappointing back office productivity was creating the demand for continuous heavy recruitment campaigns as more operations were moved offshore whilst competition from attractive global & fast growing Indian firms were driving up wage rates and employee churn rates.
Poor management disciplines meant that tracking of utilisation & productivity was poor (originally put in place by a local outsourcer who had set up the operation).
We worked with onshore & offshore management teams to put in place robust utilisation & productivity measurement systems and management control. We helped these teams determine the root causes of poor productivity and deliver 30/ 90 day rapid action plan programmes to eliminate these causes.
The end result was to increase the relative productivity of Indian staff from below 30% of onshore staff to over 90% within 90 days.