Country-Specific Outsourcing Concerns
When you choose to outsource one or more business functions, you should try to minimize the socio-political differences between the country where your business is located and the country where the work will take place. The best way to do this is to carefully consider the following three factors for the country where the offshore company is based.
- Economic and Political Considerations
- Security and Available Infrastructure
- Other Factors
Conduct research about the current socio-economic and political environment. Consider whether other companies that you are familiar with are already operating there. Be familiar with the trade environment, incentives for foreign businesses, laws regarding exports and imports, economic growth over time, child labor laws, occupational safety laws, and the available protection for confidential information and trademarked products. Also, be confident that the country has a judicial system that will adequately protect your company’s rights should problems arise in the outsourcing relationship.
Even though your company won’t have a physical presence in the country, it is important to understand the level of security and the type of infrastructure that is available to the offshore development company. Some things to examine include Internet access, telephone coverage, the real estate market, the supply of electricity, the cost of living, and transportation options.
Depending on the specific needs of your company, other factors will be important. For example, you may be concerned about the difference in time zones or the physical distance and/or convenience of traveling between the two countries. The frequency and likelihood of natural disasters also merits country-specific consideration.
How to Conduct the Research Effectively
If you own a relatively small business, this level of research may seem overwhelming, but many independent services can provide objective ratings of these and other country-specific factors. These indicators can give you a wide perspective about the country’s current status and likely future direction, and then you can delve into more detail on topics of special interest to you.