What are the costs of transitions?
The cost of transition primarily the labor cost to identify and change the processes internal processes to suite the needs of the outsourced operations. In most cases if you are doing something routine like manufacturing subassembly/component or outsourcing back-office operations or IT operations Vantage Agora Consulting practice can provide templates that are pretty close to the changes that you might have to make for your case. When it comes to you trying to move your entire operations then we will have come down and do an analysis of the changes to the processes. Many companies have blown all their savings in their off shore program because of rookie mistakes (with the best intentions).
What is the operating cost of off-shoring operations?
The outsourcing costs for you are:
- Supplier or outsourced operation costs: This is the most obvious cost that you actually cut a check for or budget for it.
- Setup costs: Supplier evaluation, process changes, internal restructuring, etc.,
- Internal infrastructural and management costs: In most cases this is primarily the management costs as US companies usually have the necessary infrastructure to support outsourced operations.
After all this, you can look at saving 30-40% of costs with VA.