Offshore outsourcing can create tremendous value for insurers, and many have already moved parts of their IT and operations to offshore captives or partners. But outsourcing is not a once-and-done process. Ensuring that continuous value is generated from these investments takes continuous focus. Without this, productivity is usually lost, costs go up, and turnover creeps higher. The reaction is often to pull back, and some insurers are reducing their use of offshoring due to poor performance.
But, with strong teams on both sides of the equation, offshoring can be very effective. Below is a very high-level checkup for offshore operations. While not entirely the same, many items ring true whether insurers are leading a captive or working with an outsourcing partner. No matter what, insurers are accountable for the organization, the people, the success, and the setbacks—period. No finger pointing allowed.
- Checkup # 1: Lead. Are onshore leaders leading, or are they expecting miracles to happen on their own? Time lapse is no sign of maturity and doesn’t warrant a hands-off approach to leadership. Chances are the staff has changed and the product and business knowledge are now much less than originally thought. It’s time to double down with leaders and understand how they are leading. There are many topics to cover in an onshore leadership deep-dive checkup. Start there first, and start with a simple question to leaders: when was the last time they spent an extended period of time on the ground with their offshore team(s)? And I’m not talking about a week-long trip. Nothing is more enlightening than walking a mile in someone else’s shoes full time for a while.
- Checkup # 2: Train. Training is key–not just technology training, but deep business training. Technology training to technology people is relatively easy. Architects and developers are smart people and can learn a new technology through a variety of open sources. It’s the business acumen training, and training of why people are in business to begin with that’s important– teaching the why rather than the how. The deeper the business training, the more knowledge and understanding organizations develop in offshore operations that are naturally far removed from the day-to-day business pressures. Once the team connects the dots, they’re off to the races again. This is a highly worthwhile investment to double down on. Think through this and start early because it takes time to do this right.
- Checkup # 3: Strategize. Reinforce strategy. Write it down if this hasn’t been done already, and then explain it in a way that everyone can understand. This is an especially important step, and a great time for senior leaders to step up and take a visible position of leadership. IT leaders should show commitment going forward, develop a road map with a trajectory of at least several years, show that meaningful work is being done, and, in the case of captives, reinforce that decisions are actually owned by the captive. This will increase motivation and work product quality just by giving the extended organization a view into the future.
Getting value from offshore capabilities is all about leadership, motivation, and focus. There are many other items to consider in a checkup, and in many cases, a lot of processes that have gone off the rails need to be corrected. There’s no time like the present to get started!
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