Why offshoring in India worked for research company Freshminds
FreshMinds founder Charlie Osmond explains the business case for offshoring
When Norwich Union announced plans to switch its call centre operations to India, it provoked outcry over the resulting job losses.
But like it or not outsourcing overseas gives you access to a cheaper, well-educated workforce, which can provide cost savings for any business.
Charlie Osmond and Caroline Plumb of our adopted business FreshMinds had been planning to take advantage of overseas talent ever since they started their bespoke research company back in 2000.
“As our business is based on establishing a flexible, cost-effective research team we’d been thinking about doing this for nearly three years,” says Osmond. “But up until now the elements haven’t been right. We looked at a number of Indian companies and trialled them, but felt they weren’t really up to scratch for the sort of service we wanted to provide.”
Now, however, the time is right. The company has established itself as one of the fastest growing in the UK, turning over £1.5m this year, and the addition of an offshore team makes perfect sense.
The opportunity eventually arose when FreshMinds agreed a deal with one of their clients, technology group netdecisions, to take on three of their full-time staff and 20 consultants as a new research team. “Doing this overcame many of the logistical problems and bureaucratic barriers, which can be extremely prohibitive, and made the whole process more viable,” says Osmond.
The new set-up is run by a native-language speaking office manager who is based in the UK, so there’s no loss of quality control and FreshMinds’ clients notice no difference in the service. However, the distinction the new research team brings to the company is more noticeable. Osmond claims the new arrangement means they can offer the kind of local understanding and project management in the UK their customers expect, but the addition of an Indian workforce has provided them with a cost-efficient way of undertaking, what he calls, the mundane aspects of research.
“We hand-pick talented researchers for our projects, but the jobs they wouldn’t get excited about can now be sent overseas. Indian staff are perfect for the more process driven work and more eager to undertake it than their UK counterparts. For example, if you gave a researcher in this country a thousand forms to fill out they would be unlikely to complete the task without error, but Indian staff are more thorough. However, a researcher from our working culture would be better suited to thinking around a problem or conducting telephone interviews,” he says.
Osmond estimates the cost savings for FreshMinds are around 40%, music to any business owner’s ears. With over two million graduates a year, the market for outsourcing work to India is growing, and though wages will undoubtedly rise, it will be decades before they come anything close to what you would pay an equivalent employee in this country.
But for those of you about to dash out and set up a new Indian office, it’s worth thinking back a few years to the rush of business blood that lead to the dotcom boom and bust. Osmond believes, as was the case with the online explosion, the smart companies will be the ones who think hard about whether outsourcing can benefit them.
“A lot of people are getting very excited about outsourcing and it’s easy to see why. Sending some of your services overseas will work, but in other circumstances it will flop, so before going ahead you need to examine whether it’s a viable option. The opportunities in India are fantastic, but in five years’ time the companies still out there, and the ones who have made the most of the market, will be those who have picked the right job to outsource,” he says.