As businesses strive to lower the total cost of operation, off-shoring critical business functions to locations where labour and business costs are cheaper becomes an attractive option. The trend is already common in the high tech and financial services industries and, according to a recent survey conducted by Deloitte Research, telecommunications operators will become the next group to benefit from the cost savings made possible by moving operations oversees, with global operators expected to off-shore 275,000 jobs by 2008.
But what are the risks involved with adopting the off-shoring model?
It is vital that risk is evaluated and the appropriate contingency plans put in place to ensure that the off-shored part of the business does not experience downtime in the event of an interruption. Out of sight does not mean out of mind, and if your call centre operation fails it will affect the overall running and success of your business. As far as your customer is concerned, if it can't get an answer from the call centre, your company has ceased to exist.
Availability and reliability
No matter where your operation is located, customers and staff expect availability and reliability of service. This makes these key factors in the decision to move a critical business function overseas. Customers are increasingly promiscuous, and if they cannot access a service due to a power failure, flood or other interruption, they will move their custom elsewhere.
Not all locations in the world have the same level of infrastructure as the UK, and the availability of power and telecoms is not necessarily as reliable. The stability and resilience of the overseas infrastructure must be evaluated and plans put in place to manage things such as power availability, call routing and peak demand.
Power availability can be resolved by such measures as UPS (uninterruptible power supplies) and generators. But for telecoms, the large distances between concentration points will pose more problems.
Taking the call centre as an example, it is imperative to have a functioning voice network at all times. It is therefore necessary to subscribe to two network suppliers and to have a second feed for routing calls. There is a high cost associated with putting in a second feed and it may be easier and more timely to re-route calls overseas.
But consider the routes carefully. Routing through Turkey has resulted in interruptions due to earthquakes which took out all the channels, causing companies which did not have diverse routing to lose their communications.
It is therefore important for organisations to identify what their minimum business and IT requirements are and to determine whether the overseas infrastructure has the necessary resilience to cope. The time-frames by which these functions must be restored following any periods of interruption must also be identified and evaluated. A call centre, for example, may have a recovery time objective of two hours, although lines would need to be transferred immediately to a recorded message if an interruption occurred.
In this instance, the workplace recovery centre should ideally be less than two hours away from the main facility. In the event of a disaster, calls should be re-routed to the recovery facility and direct dial numbers or data re-assigned on the call centre operators' computers.
Regional risks
Consider the impact of local disruptions such as flooding and droughts and the effect that they would have on the running of the operation. Many off-shore facilities are situated in one part of a country, such as New Delhi in India. A power cut can cause downtime for all the facilities in the area, resulting in multiple invocations and the need to recover to backup sites. If alternative facilities are shared with other organisations there may be issues over access and capacity if a neighbouring company has already invoked.
A dedicated recovery centre would overcome this, and would also mean that IT systems could be configured to the company's specific needs at all times. In the event of an invocation, work can start immediately.
Out of sight, not out of mind
Off-shoring can be a successful option provided that a full risk assessment is carried out to evaluate the reliability and stability of the overseas location, both in terms of the infrastructure and of the culture. Because of the technological changes we have seen in recent years, companies of all sizes are increasingly dependent on their IT and - more importantly - the people behind the systems.
It is therefore essential that businesses move their focus from pure business continuity to information availability - the process of keeping their people and information (data or intellectual) connected and available at all times. This must be reflected in their contingency plans for both the in-house and the off-shored parts of the business. Remember that out of sight should not mean out of mind, especially where the continuity and availability of key operations are concerned.
Keith Tilley is UK managing director of SunGard Availability Services, Tel: 0800 143 413,
