How to Offshore Processes (and Avoid Common Mistakes)

TL;DR

Offshoring fails to deliver its promised return for one recurring reason: organizations move a process before they understand it well enough to move it correctly. Five factors decide the outcome — picking the right processes, choosing the right partner and location, documenting procedures and SLAs before the move, preparing training material early, and building governance that runs before and after launch.

Why offshoring underdelivers

Outsourcing is a valuable way to access lower-cost, less-rigid operating capacity — but it only works when the process being moved is genuinely ready to move. I’ve learned the following five factors the hard way, through delivery on two of the largest contemporary outsourcing projects in the UAE.

1. Pick the right processes to move

Every move should be validated with a clear business case. Avoid the temptation of a big-bang approach that moves an entire department at once — it will help leadership feel decisive, but it multiplies risk instead of reducing it.

The processes most worth moving are mature, stable, and already efficient. Moving an inefficient process hands the vendor an easy win: they capture the efficiency gain the organization could have captured itself, often at a price the organization is still paying for. Processes should be well-defined, well-documented, and free of unusual edge cases. Regulatory requirements also need to be weighed early — compliance and risk functions may need to stay onshore regardless of the cost case.

2. Identify the right partner and location

Cost should never be the only factor in the decision. The factors that actually determine success include in-house skills and expertise, the balance of fixed versus variable costs, operating hours, infrastructure, access to talent pools, business continuity planning (BCP) capability, and the service provider’s tiering.

Cost should be measurably lower than the current run cost — that’s table stakes. Operating hours can extend market coverage if the time zones are used deliberately. Access to talent is the factor most often overlooked: test the recruitment pipeline up front rather than assuming it exists. BCP capability matters more than it appears to on paper — it’s what proves the partner’s resilience during a genuine disruption event, not a quiet month.

3. Document procedures and SLAs — and make changes before offshoring, not after

The single largest factor preventing an offshoring initiative from realizing its full return is skipping a data-driven assessment of the as-is process. Set the benchmark too low and you’ve built in slack the vendor will simply absorb. Set it too high — or aspirational — and you strain the relationship before it has a chance to mature.

Processes should be improved in-house before they move offshore. Re-engineering a process right after offshoring asks the receiving team to fix something they don’t yet understand, while also reaching business-as-usual performance — two hard problems instead of one.

4. Prepare detailed process material early — and get training involved

Training material should be built well ahead of go-live, and it needs to cover more than a walkthrough of standard operating procedures. It should include company culture, home-region context, function overviews, customer segments, user journeys, and the use cases the receiving team will actually encounter.

Set checkpoints early to identify candidates who aren’t going to make it through training, so they can be replaced before launch rather than during it.

5. Build governance for before and after launch

Governance needs to be robust for both the transition period and steady-state operations. The service provider should be expected to monitor and report against SLAs and to proactively identify further improvement opportunities — not wait to be asked.

Equally important: monitor the business case and benefits realization on your own side. The most common failure mode isn’t on the vendor’s end at all — it’s the business failing to release or reshuffle the onshore resources whose work just moved, which means the organization ends up running double capacity for the same work.

What this comes down to

These are the factors that matter most when offshoring or outsourcing a process — learned through direct delivery experience with multiple clients, not from a textbook. None of them are complicated on their own. What’s hard is doing all five together, in sequence, before the contract is signed rather than after.

From the field: I delivered exactly this kind of process-readiness and governance work on a large-scale outsourcing initiative for a Gulf retail bank — picking the right processes, setting the as-is benchmark, and building governance that ran before and after go-live. Read more in Services: Transformation & Target Operating Model Design.