This blog comes to you in two parts:
Part 1: Shared Services Offshore: Current State of Play and
Part 2: Shared Services Onshore: A Focus on Women (to be released 24/06).
Both blogs draw on insights from two recent conferences, Women in Procurement (May, 2015) and Shared Services Outsource Week (June) along with experiences over the last 2.5 years of consulting in this space. Key learning and areas of opportunity, particularly when working with Asia and Women in shared services are highlighted. Thank you to the organisers both SSON (SSOW) and Quest Events (Women in Procurement) for having me involved as a speaker and facilitator.
Part 1: Shared Services Offshore (Asia) : Current State of Play
Iconic and leading brands gathered to share their knowledge at both these conferences. My eyes and ears were drawn to anything BPO and captive (which there was a mix of), so this is a round up from mining, education, telecommunications and five leading banking and financial institutions.
Rationale for Offshoring
Their reasons for taking their back office work and contact centres offshore were cost, access to resources, efficiency, reduced operational risks and innovation.
The latter were two interesting reasons that 10-15 years ago, you would not have seen, given the glare of the COST rationale. The market has matured and these players reflected their maturity with their partnerships ranging from 3 to 10 years.
Popular destinations are still India and Manila with India highlighted by a bank economist as a destination with renewed confidence. This economist shared that India’s drop in inflation, increased inward FDI and stability with PM Modi positions it well. Biggest deciders on location mentioned in polls and panels are still cost, infrastructure, access to talent and language. However, the distance between cost being the biggest driver, and access to talent was quite marked.
This distance would be suitable in a ‘cost per transaction’ type offshoring scenario where the focus is on efficiently executing items, e.g. claims processed. However if the work to be done was heavily reliant on behavioural skills, using judgement and providing customer experiences then the recommendation would be to have ‘cost’ and ‘access to talent’ as equally high priorities.
Relationship, Relationship, Relationship
Successful companies all resounded with the same key messages of creating a trust relationship, with one bank holding a session on creating a single culture across multiple locations. Different operational leaders shared in a heart-warming fashion real-life practical ways to connect with offshore partners, other than observing Asian holidays or having group reward nights:
Interesting examples were:
- Not referring to vendors or outsourced operations but Partners and making this stick with all team members.
- On weekly voice-points, checking who was on line with no difference in naming teams, e.g. “Are you there, Team Melbourne, Team Sydney, Team Mumbai?”
- Scheduling regular timeslots where partners could ‘drop in’ virtually on a call to ask a question or share an insight or idea.
- To create value one bank encouraged all teams to reach for a goal: for every dollar of spend, there needed to be suggestions for $X of innovation.
- There was also a focus on “Metrics that Matter” across leader’s accounts, to be fair in the partnership. An HR leader from a leading bank summed it up well with “Watermelon metrics” which is a refreshing way of describing how we sometimes measure the wrong items, which show green on the dashboards, but contextually we know that things are red on the inside – the dashboard does not reflect this. We are measuring the wrong things and potentially setting up the operations to fail.
Cross Cultural Competence
Cross cultural awareness and training was mentioned as a key ingredient, however there were various differences in how this was executed with one leading bank cautioning that cultural differences can’t be used as a reason for poor performance. This is absolutely correct if the right effort has been applied in recruiting the right talent, knowledge transferring with diligence and coaching performance, in the way that Asian partners respond best.
Here are some observations of gaps. I tested these gaps by attending every session on offshoring and meeting with over 20 leaders operational in offshoring – asking the same questions. What kind of cross-cultural training do you do and when do you do this? Do you apply any of this knowledge to your people processes when selecting staff offshore, training and coaching them?
- Overall, cross-cultural training was at the front end of an offshoring engagement for both partners and clients, each delivering their own knowledge on each other’s culture. Mainly it was generic do’s and don’ts of each culture.
- Cross-cultural knowledge had grown organically through the relationship over 6-12 months between the parties. A very hit and miss strategy, so it was enlightening to hear how a mining giant mentioned from their hindsight experience, that cultural awareness was a key to stabilising onshore and offshore quicker.
- There also was no deliberate overlay of this cross-cultural knowledge into people processes of recruitment and selection, knowledge transfer and coaching (performance or leadership). There were some small inferences of using cultural knowledge – A bank using captive centres in Manila and India, strategically used Filipino staff to do more customer facing work and Indian staff to do more back office work. Playing cross culturally to strengths.
Why isn’t cross-cultural training done at least throughout the integration during that stabilisation phase? Why not reduce the miscommunications on emails, meeting times that yield little movement forward or battle to traverse the varying levels of hierarchy?
Networks at both conferences openly shared not scoping this type of niche training or not having thought about it across the transition. They admitted learning about Asian cultures through making mistakes that sometimes cost them impacts to deadlines and customers.
Key Learning & Areas of Opportunity
The lean into Asia will continue for shared services with a pull of cost and value levers. Underpinning this partnership is a gap and area of opportunity to build cross-cultural competence early on in the onshore/offshore stabilisation. In the spirit of partnership it is incumbent on both foreign cultures to learn and apply cultural knowledge relevant to their business dealings. The do’s and don’ts of older cultural training courses that referenced the Commonwealth, Cricket, Curry, Kangaroos and Karaoke need a refresher.
About the author: Div is the Managing Director and Principal Consultant at MindTribes. Clients appreciate Div’s differentiator in the market. Unlike other consultants who deliver only cross cultural training on Asia at the start of an engagement, Div works operationally with both Australian leaders and Asian partners to lift performance within 90 days. Levers she pulls are changes to recruitment practices, knowledge transfer, KPI alignment and leadership; all within the context of working cross culturally and virtually. The result is increased business confidence and tangible performance improvements from both offshore and onshore partners. Div holds a BA (Hons) Organisational Psychology, Masters in HRM and is a Certified Executive and Leadership Coach (ICF).