黑洞社区

If you haven鈥檛 got too many sins to atone for already, there is one new year鈥檚 resolution you should definitely make. That is to start off-shoring your mundane tasks to specialists in cheaper parts of the world so you can concentrate on the real value-adding stuff. Off-shoring, or outsourcing as it is also called, is rapidly becoming a standard strategy, and companies that ignore it risk being left behind in an increasing globalised world.

The main appeal of off-shoring is that it is cheap 鈥� up to one-tenth of the cost of having the work done in the UK. But money isn鈥檛 the whole story, as Nick Campbell, a partner at architect CZWG, testifies: 鈥淚t means we can do the job properly because we can resource it properly. It doesn鈥檛 save money for the client but they get a much better service.鈥�

Flexibility is another reason to off-shore. 鈥淲hen you are working on PFI projects of 拢100m-plus, there is a huge amount of information that has to be turned around under pressure,鈥� says Matt Audinwood, an executive director at architect Nightingale Associates. 鈥淥nce the work ends, this stops. Managing these peaks and troughs in the workload is difficult in a static office in the UK.鈥�

This way of smoothing workload is especially relevant to small practices, as it means they can tackle bigger, more complex jobs by farming work out. 鈥淥ff-shoring enables a small practice to do projects for which it doesn鈥檛 have all the in-house skills,鈥� says Robin Snell, principal of Snell Associates. 鈥淲hen we have the need for 20 draftspeople it鈥檚 a tremendous advantage to off-shore it out, as we wouldn鈥檛 want to be an office of 100 people.鈥�

If you are thinking of taking the plunge for the first time in 2006 check out our guide overleaf on how to get started

Credit: Simone Lia

鈥�Where do off-shoring companies operate?

鈥淲ork can be off-shored anywhere there鈥檚 a well educated population and a poor economy,鈥� says Mikele Brack, the business development manager of off-shoring specialist Atlas Industries. Atlas off-shores its work to Vietnam but there are plenty of other countries eager to offer services. India is known for its IT and engineering workforce and South Africa is popular with architects and . Other off-shoring destinations include the Philippines, Indonesia, Eastern Europe, South America and China.

What sort of work can be off-shored?

A multitude of tasks. Off-shoring specialists tend to concentrate on skilled work that doesn鈥檛 require creative input. This includes turning concepts into CAD drawings, producing visualisations and videos for presentations and turning scheme design information into production drawings. Healthcare projects require the details of every single piece of equipment that goes into a hospital to be checked against the brief and signed off; this job is perfect for off-shoring. Service companies can off-shore helplines and QSs can do the same for software development and bills of quantities .

Which companies are off-shoring?

Small and large companies do it. Off-shoring is popular with consultants including architects, engineers and cost consultants. Contractors off-shore too, for example Laing O鈥橰ourke has a facility in India for churning out production information.

What are the options and how much does each save?

• The direct approach

The cheapest option is go directly to an overseas specialist. Snell Associates used a Chinese video production company to produce a promotional package for a job. Snell says: 鈥淚 was in China anyway so I could keep an eye on things. We met and talked everything through, then they produced the images and video in 14 days at a fraction of the cost of the UK.鈥� He adds that going to a specialist abroad could be risky without making personal contact first.

Use an intermediary

There are specialist companies that off-shore work on behalf of clients. Two examples are CADnet, a CAD drafting specialist, and Atlas Industries, which specialises in turning architects鈥� concepts into worked up production documentation. Both companies have offices in the UK and can liaise with clients face to face. The advantage is these specialists have UK-trained staff overseas so they can ensure that local workers are up to speed with the UK鈥檚 黑洞社区 Regulations. Work is double-checked in the UK before it goes out to the client. This service is inevitably more expensive than going direct; Atlas and CADnet say they charge between half and two-thirds of what it would cost to do it all in Britain.

• Partner with a firm abroad

This approach has worked well for architect CZWG. They partner with a practice in South Africa that helps with production information. 鈥淚t鈥檚 a very involved marriage and a genuine collaboration,鈥� says Nick Campbell a partner at CZWG. 鈥淲e work with them on a daily basis to ensure everything is co-ordinated.

It wouldn鈥檛 work otherwise.鈥� He says the fact there is little time difference between the countries, and that English is a common language, is key to this approach. Architects from both practices work in each other鈥檚 offices. According to Campbell, doing work in South Africa is 25% cheaper than doing it in-house.

• Set up your own office

Some larger firms set up offices abroad to cut costs 鈥� for example, architect Nightingale Associates opened an office in South Africa 18 months ago. 鈥淲e鈥檇 done some off-shoring through contacts in South Africa. It worked reasonably well but we found work didn鈥檛 always come back 100% so we felt having direct control was preferable,鈥� says executive director Matt Audinwood, who set up the South African office. He reckons it saves the firm about 60%.

IT solutions provider Asite has an office in Ahmedabad, in Gujarat, north-west India, with 70 employees. It provides a helpdesk for Asite鈥檚 clients and software support and development. 鈥淲ith this approach there are all the management issues such as retaining staff and overheads,鈥� says Gordon Ashworth, interim chief executive. He says Asite carefully researched locations as India鈥檚 expanding economy meant there was a huge demand for skilled people in places such as Mumbai and Bangalore. Asite settled on Ahmedabad because it wasn鈥檛 an IT hotspot so staff were much cheaper. Ashworth says work done in India costs one-fifth of the same work done in the UK.

Credit: Simone Lia

What sort of technology is needed?

The average office has all the technology it needs for off-shoring. Cheap telephone calls mean communication is instant and documents are easily emailed. Firms with more permanent relationships with overseas specialists tend to have more sophisticated technology. CZWG swaps information with its South African partner via an internet-based project collaboration tool, and Nightingale Associates鈥� South African office uses video conferencing and is connected to the UK computer network.

Are time differences a problem?

This really depends on personal preference. Robin Snell of Snell Associates found a big gap was an advantage when producing his presentation video in China. 鈥淭hey would be at work while we were asleep. When we went in the office it would all be there ready which is amazing, it鈥檚 real 24-hour working.鈥� On the other hand, the architects with links to South Africa like the fact there is very little time difference because they can work together in real time.

Do workers abroad know about UK regulations?

This is unlikely if you go directly to India or China. However, UK-based off-shoring specialists will train their overseas staff to understand our regulations and check their work. Other countries have a fair understanding of UK regulations and construction methods. For example, South Africa is a popular off-shoring destination because their education and regulatory system is similar to our own.

How do I ensure my in-house team don鈥檛 feel threatened by off-shoring?

The skills shortage means this is unlikely. CADnet says its success is largely the result of the shortage of UK-based CAD operators. CZWG鈥檚 Campbell thinks off-shoring is a safer option than expanding the home office if firms want to take on bigger projects. 鈥淲orkers鈥� jobs would be more threatened if we expanded the firm to 100 people then hit a recession,鈥� he says.

Could more creative work be off-shored?

This could be the next quantum leap for off-shoring because places such as India and China are producing large numbers of skilled people in disciplines shunned by the British. 鈥淭en years ago it was off-shored software-writing, then it was call centres,鈥� says Asite鈥檚 Ashworth. 鈥淭he next stage must be research and development; it鈥檚 a third of the cost compared with the UK and the education in India is really top-notch.鈥� He adds large Indian IT off-shoring specialists such as Tata Consultancy Services are set to move into Europe to get closer to their clients and to offer a more sophisticated service. Nightingale Associates鈥� South African office has been involved in every stage associated with projects, including concept design 鈥� although it hasn鈥檛 seen a project through from concept to completion.

Given the speed of globalisation it is only a matter of time before UK practices are competing head on with Chinese and Indian consultants. Then off-shoring won鈥檛 sound so appealing 鈥�