What criteria do companies use when they select a business process to offshore?
In general, business processes should be selected for offshoring based on potential savings, labor attributes, interdependencies, and regulatory constraints. Usually the following criteria are used when evaluating business processes: • Size of cost base. • Labor necessary to complete the task, i.e., is it labor intensive? • Presence of interlinkages that would be violated by relocation. • Availability of full-time offshore employees skilled in the particular business process. • Difference in onshore and offshore wage levels. After the evaluation, most companies assign processes to one of three categories: probable, possible, and unlikely for offshoring. The most experienced companies tend to implement a phased approach: • First, they start small with well-documented processes that require little day-to-day interaction such as data entry or legacy application maintenance. • Gradually they move to more value-added processes such as customer support, accounts payable, or software developm
