It can be tough to find the right country to outsource business processes. You want to avoid any deterioration in service quality while reducing costs. The talent pool in other countries can be either a boon or a detriment, and you need to consider things like long-term viability and how it could be affected by political instability, regulations, or any of a number of factors.
Viet Ho, CPO of Russell Investments based in Seattle, shared his personal experience of solving an offshoring challenge for Russell in his ISM2015 session, "Delivering 50% Cost Savings to Business Leaders" on Monday morning.
After years of sourcing BPO and IT services in India, it was time to make a change. Their suppliers there were less focused on their business as they chased bigger accounts. There were visa issues and high turnover with the employee base. Overall, there was just a general drop in the quality of service. To help Russell's CEO think through what to do next, Ho followed three steps to search for an alternative country.
●Step 1: Conducting market research and supplier search
●Step 2: Evaluating different geographic locations
●Step 3: Reviewing three short-listed locations (Philipines, Malaysia and Vietnam).
Ho explained this process in detail during his presentation, but in the end Vietnam was chosen because it offered a 30-50 percent lower cost than India; and political, social and economic stability. A highly-skilled workforce with low turnover was another appeal. And finally, Vietnamese companies have a "strategic partnership focus" — there was a lot of interest, said Ho, in working with U.S. companies.
Ho is working to develop a collection of CPO-level feedback and insights about outsourcing in Vietnam, and encourages supply management professionals considering the country to visit his blog at www.offshoreviet.com.