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Jeremy Zick | 7 May 2024
To say we are in a state of transformation in the A&E section would be an understatement. What used to work before, call it the pre-pandemic and pre-inflation way of doing business, are coming under severe stress. With wage and benefit costs through the proverbial roof, intense competition for valuable projects that we simply don’t have the time and resources to win, and what seems like an ongoing battle to retain your employees, no matter how you look at it, a paradigm shift is happening.
To grow and succeed, for smaller A&E firms, it’s clear that relying solely on local resources is no longer viable. The global shifts in markets, technological advancements, and workforce dynamics are compelling us to rethink our approach, especially in terms of optimizing our business operations.
So how do we do it then?
Outsourcing has become a strategic tool that allows us to maintain our valued current team while tapping into a world of expertise on demand. This flexibility is crucial as project requirements evolve swiftly, and the ability to adapt quickly is what defines our success. By engaging with specialists globally, we can bring in cutting-edge skills without the overhead of expanding our permanent teams, allowing us to enhance our productivity and accelerate project delivery without a corresponding increase in costs.
But before you jump in, it’s important to know that offshoring isn’t a one-size-fits-all approach. The true strategic advantage comes from choosing the right model, and the stakes are high, because failing to do so could mean legal and regulatory issues, not to mention a team that is less empowered and less driven to succeed. The stakes are high, but the payoff and rewards are even higher.
So let’s jump in, and I promise you that after reading this blog, you should have a better understanding of the approach that is best for your firm along with deeper insight into how offshoring can power your business forward.
Comparing and Contrasting
There are a number of offshoring approaches, and the terms are often used interchangeably. However they each have distinct concepts and approaches, with unique implications for how a business operates. I’m going to explain the differences below, as well as take a look at the proprietary, more innovative model that we’ve developed at WeCollabify.
Outsourcing: Delegating Specific Functions
Outsourcing, a strategy widely adopted across industries, allows companies to delegate specific business processes, including business process outsourcing, to external agencies. The primary driver for outsourcing is often to streamline operations, reduce costs, or focus more intently on core business competencies.
Business process outsourcing (BPO) encompasses two main categories: back-office and front-office solutions. The back-office realm includes IT outsourcing, which can be further divided into technical support, software development, and application support and management.
On the front-office side, customer service operations are a typical area for outsourcing. For instance, banks may outsource customer-facing inquiries or complaints related to online banking services to a third party. This decision is driven by factors such as meeting consumer demand, leveraging the specialized expertise of the third-party provider, and realizing cost-saving benefits.
While the bottom line savings can be significant, the lack of quality control and timely delivery often offsets any financial gains, especially for smaller firms.
Offshoring: Relocating Operations
Offshoring enables firms to capitalize on economic disparities by contracting out specific business processes or tasks to third-party service providers in countries where costs are significantly lower. Unlike outsourcing, offshoring doesn’t necessarily mean handing over control to another company; it can also involve setting up a remote subsidiary or branch of the existing business in a different country.
In general, by implementing offshore outsourcing, businesses can achieve significant cost savings on labor, without compromising on the quality of output. This approach primarily involves moving business processes that are either labor-intensive or require a specific skill set that’s more economically sourced overseas. For instance, a company might offshore its customer service or IT support departments to regions with lower wage scales, yet with a workforce that possesses the requisite skills.
While you do maintain more quality control with offshoring, going it alone comes with the legal and regulatory risks mentioned earlier, as you need to be an expert in a given country’s labor laws. There are also often issues around communication and delivery times as to maximize financial gain, offshoring usually means locating your remote team in a time zone that does not align with your standard office hours.
Onshoring: More Control But at a Cost
A new method that has gained traction post-pandemic, onshoring brings business processes back home to enhance oversight and integration. By relocating these processes to the company’s home country, onshoring strengthens control over core operations and fosters a closer alignment with the core company culture.
This proximity enhances collaboration among team members, leading to more efficient and cohesive project outcomes. Onshoring simplifies the integration of business processes into the overarching goals of the company, ensuring that every task is imbued with the company’s values and strategic vision.
It’s a strategy that can enhance quality control, streamline communication, and embed a deeper understanding of the business process within the fabric of the company’s culture. That said, if the goal of an offshore strategy is to increase revenue and profit without giving it all back to the bottom from the wage and benefit issues described earlier, onshoring ultimately isn’t going to give your firm any financial gains.
InSourcing: The WeCollabify Innovation
Having seen the pros and cons of all of these approaches, founding WeCollabify presented an opportunity to develop a concept called InSourcing. This approach combines the benefits of offshoring with a unique twist that emphasizes integration and collaboration. InSourcing goes beyond merely hiring talent from overseas; it involves creating cohesive teams that work together, share ideas, and train each other, regardless of their physical location.
Unlike the methods above, InSourcing assigns work to employees or resources within a company, rather than outsourcing it to external third-party vendors or service providers. In other words, following this approach means utilizing the company’s internal workforce and capabilities to perform tasks or functions that could potentially be outsourced. These new remote team members, highly-skilled professionals who are vetted by us, are hired in the same or similar time zone, meaning there is no loss to productivity and turnaround times. In addition, we handle all of the in-country paperwork, including payroll.
Your newly expanded team stays within the company’s organizational structure and under its direct control, letting you leverage existing human resources, infrastructure, and internal expertise to handle various operations or projects. This also means InSourcing allows you to maintain oversight over critical processes to ensure data security, intellectual property protection, and specialized knowledge and skills stay within the organization. At the same time, the new remote staff will inject an immediate dose of additional knowledge, experience, and expertise that will uncover new opportunities, identify new ways of tackling problems, and create new energy and momentum for the business.
The benefits go beyond the work, as InSourcing also enhances the skills and productivity of your existing team members. They can not only take on more strategic tasks that are often left undone, but they also become empowered by leading and managing the new remote team members, an experience that will prepare them for future leadership roles within your company. At the same time, WeCollabify provides ongoing support from onboarding to recurring and frequent check-ins to ensure their performance, skills, and organization fit continue to exceed your expectations.You and your employees are never alone on this journey.
Choosing the Right Approach
The decision to adopt an offshore model should be guided by your firm’s specific needs, project demands, and long-term strategic goals. Consider factors such as:
- Project complexity and specialization requirements
- Desired level of control over processes
- Budget constraints and potential ROI
- Cultural fit and ease of management
- Long-term scalability needs
Assuming you want to maintain control and save on costs (which eliminates outsourcing and onshoring), offshoring does present a compelling cost-saving strategy, especially for tasks that are well-defined and can be easily transferred across borders without significant loss of context or quality. It’s an option I’ve seen work well for bulk engineering designs or drafting services that don’t require frequent real-time collaboration.
But InSourcing tends to offer the best of all worlds in the A&E industry, where projects often come with a high degree of complexity, the need for innovation, and real-time collaboration. Think about the impact of leveraging highly-experienced, vetted architecture professionals like design experts, production leads, and even BIM modelers and managers who can quickly add value to your company. All of a sudden you are able to keep your smaller firm ethos and culture while being able to compete with larger firms. This is an offshoring model that empowers your team while powering results.
Whichever route you go, just remember the challenges that got you to read this blog in the first place. The world of A&E is rapidly changing, and looking beyond the four walls of your headquarters is essential for not just growing your business, but the very essence of its survival. The tools and resources are there, it’s time to cast a broader look at how they can power your business forward.
Next Steps: How Can We Help?
Understanding the complexities of ‘shoring’ strategies, we’re here to guide you through selecting and implementing the most efficient approach for your A&E projects. With a landscape as ever-changing as the A&E industry, it’s crucial to align your project needs with the appropriate shoring strategy, whether it’s insourcing, outsourcing, or any variation in between.
But how can we assist?
By providing a tailored consultation, we’ll delve deep into your project’s specifics, evaluating the unique challenges and opportunities it presents. We’ll explore how insourcing or other shoring strategies can optimize your operations, enhance team synergy, and drive innovation.
Our objective is to empower you with the knowledge and tools necessary to make informed decisions that align with your strategic objectives in the A&E industry.
With our guidance, you’ll not only comprehend the full range of ‘shoring’ options but also how to leverage them effectively for your business’s success.