An article in LegalIT (a UK publication) provides some good analysis and practical tips for law firms considering outsourcing non-lawyer functions to offshore locations. The article also helped me see a connection between offshoring and adopting new technology.
Outsourcing: Quantifying offshore risks, posted on February 5th, explains that many UK firms are considering offshoring but that achieving its benefits may be harder than first appears. The article explains “danger signs” such as under-estimating the impact on the firm and failure to test adequately. It then describes four steps such as designing the framework and managing the transition that are necessary for offshoring to succeed.
I found two specifics of particular interest. First, the article notes that a hidden cost of offshoring is failing to improve “internal processes, which in many cases need to be improved” and that “using offshoring in the belief that it will provide a quick fix to fundamental process issues is wrong.” In my view, this is true for any “automation” project. Just applying technology – or offshoring here – is not enough. Achieving real benefit from technology or outsourcing typically means “business process re-engineering” or at least confirming that existing processes are efficient.
And second, the article notes that offshoring requires changes in how people work and managing cultural changes are tricky. The same is true for many new technologies. It may be hard to remember now, but many firms struggled to adopt e-mail. And cultural issues are a major topic of discussion among knowledge managers.
So reading this article made me realize one reason I found the offshoring topic interesting. I had not articulated this to myself previously, but offshoring raises many of the same “change management” issues as do new technologies. The benefits are potentially great, but they are not free, and good planning is required.
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