August 9, 2013

10 Questions to Ask Before Overseas Expansion (Part 2)

Concept of businessman with many questions and no answerThe 16th Annual Global CEO survey by PwC shows us that 25 percent of CEOs are planning to expand within overseas market this year. This means that HR and Talent attraction professionals can expect to be called on this year to support their firm’s international expansion plans.

In the first part of this article, I outlined five questions that international talent managers should be asking in support of and prior to international expansion. These were:

1. What are the incremental gains to be made from going international?

2. What cost savings are we hoping to achieve from international expansion? What are the typical savings from off shoring to that location?

3. Why have we chosen this country, (say China) over that country, (say India, or another plausible destination)?

4. Which country is the best option from a talent availability point of view?

5. Should we go captive or outsource?

In the second part of this article, I have outlined another five questions that should be asked prior to international expansion, and you can find these below:

6. Should we go freelance or employed?

Of course, in relation to the previous consideration, there may not be a BPO, ‘in country’, which has employees with the required skills, which means you may have no other option than to do a DIY start-up. This means that you will have to negotiate significant red tape that could slow down your initiative, meaning that you miss opportunities. If this is the case, you might want to consider a freelancer over an employee. These can be readily found on sites like elance and guru, and they are, in many respects, a ready-made one person BPO, who are ready to go and can reduce your time to market dramatically.

7. Which countries have the shortest expected company set-up time? How long will it take to legally place your first bum on seat?

Red tape may be an issue and it can be harder to set up in some countries than it is in others. Research your target destinations and perhaps contact embassies within each country to establish how extensive the red tape is. Knowing the expected set up time for your desired expansion location compared to others could be an important factor in your final choice of offshore location.

8. Do you need to expand at all in the traditional sense? Why not expand virtually?

In the traditional form of overseas expansion, you would set up an office and hire staff and run it. It is now possible to build a virtual company of reliable freelancers using sites like elance and Guru, which, at least for small initiatives, could render the traditional idea of physical expansion redundant.

9. Does your organization have enough intercultural adaptability?

In order to succeed, your domestic organization will need to have the people and processes that enable them to engage with different cultures and languages. Assess your organization and see how much combined international experience there is and specifically how much experience there is of the chosen destination. Are any of your staff from these locations? Have they traveled there? Do any of them speak the local language? Can they understand different cultural contexts and viewpoints? Are they open to new ideas and ways of thinking? If your intercultural adaptability is low, you would ideally look to train and hire appropriate staff to help build a more culturally adaptable organization to support your initiative.

10. Are your management processes virtualized and able to support international expansion?

If your overseas expansion is to get off the ground, let alone succeed, your business is going to have to be able to effectively collaborate virtually. This is more than just allowing people to work from home. This is about building an entire management model and ethos, which says that those outside the office are in no way disadvantaged and can work, collaborate and be managed as effectively and as those who are co-located in the domestic HQ.

Good luck with your overseas sourcing ventures!

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Kazim Ladimeji is a Chartered Member of the Chartered Institute of Personnel and Development, and has been a practicing HR professional for 14 years. Kazim is the Director of The Career Cafe: a resource for start-ups, small business and job seekers.