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Our offshoring experience – part 1

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Peter Thompson

I was talking to a colleague of mine recently who was telling me how their company had decided to move their production from Germany to Romania because if they didn’t relocate it, they would no longer be able to compete in the marketplace. Besides, their competition had already either offshored or outsourced their production to lower cost centres.

For the last 15 months, GCOMM and LiveBackup have been offshoring our marketing, some research and sales support functions to Serbia.

It wasn’t a strategy we initially had in place, but given that I have been living in Europe for the past 13 years and in Serbia for the last 5, it kind of tied into the “how” we started offshoring.

This offshoring exercise began because I found a really good marketeer in Vladimir Milanovic.  He was the designer behind the LiveBackup brand. He developed the primary concept.

Working with Vlada inspired me to build a team that could initially service the immediate and longer term marketing requirements of the high-tech companies that are GCOMM and LiveBackup.

After establishing an office in Belgrade and recruiting a team of people, my entrepreneurial instincts began to kick in and I started wondering whether other value added functions could be supplemented to the business. And for sure we are working on some.

The team that is implementing the new management information systems platform are mostly based here with me. We have some research and sales support functions here that are providing much needed assistance to the sales team in Australia.

Our CRM and marketing automation platform is administered from Serbia and research and testing of new service offerings is beginning to occur.

What we are seeing is that we are building a powerful back end to support the customer facing activities performed daily.

We have been able to operate an exchange program where team members spend time in each other’s office, get to know each other, share experiences and the know-how.

As we operate a 24 hour business, there are some very good reasons to offshore. Customers increasingly expect to be able to speak to someone when they call or get a fast response to the submission of a ticket any time of the day. However, the cost of providing 24 hour service is extremely high.

If we make a decision to employ the five new support people, I begin to wonder how many people you can employ in Australia that will happily work every weekend or third shift from 10pm – 6am.

I also think not too many people enjoy working on Friday and Saturday nights. IT services are different from retail and require specific expertise. Real financial or other incentive is going to be needed to encourage someone to work in a rotating work shift on an ongoing basis.

Like many other companies, we tend to proceed with having the employees rostered on pagers throughout the night which certainly becomes demanding on our team. We are pretty clear how we are going to address that in the near future.

For starters, there are three shifts on an average working day of 8 hours and then there is, of course, 48 hours on the weekend in addition. To increase from providing 10-hour a day to 24 hours a day support requires employment of around 5 engineers or support people.

IT equipment tends to send alerts on a regular basis and constant pressure to be available must take a toll on the company motivation affecting the motivation of the team.

Another positive for offshoring based on around the clock is that system upgrades or network restarts can be performed after hours.

Fortunately, In Serbia there are even different dates for Christmas and Easter compared to Australia.

Some functions that we could perform in the future through our European presence might include research, developing proposals, entering data, installations or upgrades. All of this in the middle of the night.

It is effectively getting work done through a global pool of talent.

It’s possible to achieve a full 24 hour shift of work that might otherwise take 3 days. That is a huge productivity increase for any business.

We see the upside as follows.

A project plan can be developed by our engineers in Australia and they can set up the equipment for remote access. An installation, upgrade or other can be worked on during the night and when the engineers return the next day they can continue on with their task.

In essence, offshoring can deliver the ability to hire people with families seeking a traditional Monday to Friday lifestyle whilst providing the service to your customers they are expecting.

Overall, it’s a win/win situation for all involved.

In part 2 of “Our offshoring experience”, we will take a look at some of the factors that we faced in order to make our offshoring implementation work.

♦ End

About Peter Thompson

Peter Thompson
Peter Thompson founded GCOMM in 1996. He received his Bachelor’s degree in Software Engineering/Information Systems from Griffith University and his MBA from Nyenrode Business Universiteit in Holland. He believes in building great teams of people, both in business and socially.
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