Outsourcing Issues

Welcome to On the Edge, a monthly newsletter from ExpatEdge®, that answers your questions regarding international assignments. This month we address the following questions:

• We are considering outsourcing our international assignment program administration. What is required to successfully outsource our program?
• Are there pitfalls to outsourcing?

We are considering outsourcing our international assignment program administration. What is required to successfully outsource our program?

Outsourcing any function requires a thorough review of current processes and procedures. Then, if the decision is made to outsource, goals must be established. Determining what your company's outsourcing objectives are should be made prior to awarding the process to an outside firm. You must be able to measure success in order to determine if outsourcing will assist or hinder your international assignment program.

Some of the questions that should be answered are:

• Are your international assignment policies and procedures documented?
• Do the appropriate internal departments work well together or is internal communication an issue?
• Are there consistent processes for international assignments or is each assignment managed on an ad hoc basis?
• Is program administration a core part of your business?
• Will outsourcing free up your staff to work on strategic business issues?
• Through outsourcing, can your company obtain access to technology tools that could not otherwise be afforded?
• Where will the outsourcing physically take place - within the corporate office?
• Does management work with HR to identify cross border employees on a proactive basis or are assignments discovered after individual and corporate tax issues are already a problem?
• Does your company currently have the expertise to efficiently administer the international assignment program?

This is not an all-inclusive list. Consider it a starting point for determining whether outsourcing is a possibility for your company. Outsourcing will not fix a broken process and may make the process worse!

Are there pitfalls to outsourcing?

A pitfall for one company may be a success story for another. Some issues to consider in determining if outsourcing is right for your organization:

• Can your company develop a close, long-term relationship with the outsourcing firm?
• Does the outsourcing firm provide the services you need?
• Will they work with your other suppliers to cover all the services your international assignment program needs?
• Does the outsourcing firm deliver more than they promise, or promise more than they can deliver?
• Will the outsourcing firm be able to adapt to your corporate culture?
• Can you reach agreement on when work is to be completed and how errors are to corrected?
• Do you have a clear process for approving exceptions to written policies and procedures?

If your international assignment program is outsourced, continue to ask questions to determine if your original goals are being met:

• Are you spending more or less time dealing with international assignment program issues?
• Do you feel a loss of control over the management of the program?
• Are the services you anticipated outsourcing covered by your engagement contract?
• Do you need to redefine the role of the outsourcing firm because the support your program needs is broader than originally anticipated?

Again, this is not an exhaustive list of things that should be reviewed when trying to avoid outsourcing pitfalls. Understanding your company's processes and procedures is the first step, and setting specific goals is the second step towards a successful outsourcing decision.