Offshoring helps get your cost base right

As an offshoring provider, CLEAR has the same critical challenge as every business – how to best add value for our clients. We’ve adapted our business to best address our clients’ needs in the new reality.  

In this edition of our weekly series on what we’ve learned and how offshoring can help your agency meet the critical challenge, our focus is on cost. Getting your cost base set correctly is pivotal in advising your clients profitably. 

A business decision can achieve one of three things: increase revenue; increase efficiency; or decrease risk. A decision to use offshoring is normally based on efficiency and profitability. 

Offshoring is typically provided from locations where salary and other costs are lower than in Australia. Cost arbitrage has and will continue to be a driving factor in an agency’s decision to incorporate offshoring. However, cost isn’t the only element of efficiency. It is simpler to turn to a colleague at the next desk and ask a question than it is to work effectively with someone remote from you. There has to be a compelling rationale about the efficiency of the remote option. 

We apply this approach in our business. We formerly had in-house digital and design teams. We now utilise third parties: the offshoring business outsources its requirements. Why? In this case, the ability to turn to the person at the next desk didn’t produce better outcomes. It is more expensive per hour to utilise third parties but it is more effective. We access people who are the very best at what they do. We access them when we need them. Their expertise means they understand and execute the brief faster and better than we could achieve internally. 

When assessing offshoring for your agency, cost is obviously important. But your provider needs to make sure that you achieve efficiency, not just cost savings. 

Next week, we will look at how to achieve great outcomes from offshoring. 

 

All the best 

Rob Connell 

Managing Director 

CLEAR 

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