There's a lot happening behind the scenes at VE across various fronts.  

Consider the transformative shift in how companies operated before and after the widespread adoption of computers. That's the magnitude of change we're undertaking now at VE with artificial intelligence. It's not just hype surrounding AI — we're genuinely re-envisioning every department and vertical. For instance, we are working towards a vision where we:

• Empower clients to hire qualified, screened candidates within minutes instead of days or weeks. 
• Shift from a push to a pull strategy in talent acquisition, significantly reducing our need to proactively recruit talent.   
• Understand our clients' needs more deeply than they might themselves, offering solutions with unprecedented efficiency. 

These steps are just the beginning of the transformations we’re making. The role of the Chief Operating Officer at VE will soon be largely fulfilled by AI — this is the best way to explain our direction and it’s not an exaggeration by any means. Of course, this shift will primarily affect the more mechanical aspects of operations; team building, communication, and the nuances of soft skills and emotional intelligence will remain human-centric tasks managed by other C-level executives. Similarly, we anticipate a reduced need for middle management, leading to cost savings we'll pass on to our customers. 

Our AI chatbot ‘Sheela’ is already making strides, listening to every call made by our sales team and subject matter experts, reviewing performance, offering guidance, and pinpointing areas for improvement.

[An example of our chatbot Sheela reviewing a sales call]

While most companies in the AI space focus on products, tools, or new business models, our primary goal is to redefine what a company run and managed by AI looks like. This is something no one at present can answer because it’s as unprecedented as the transformation brought about by computers in the 70s and 80s, and the internet in the 90s and 2000s. In short, the sky really is the limit because it’s not just about automating current processes; it’s about envisioning entirely new functionalities that AI can bring to enhance our capabilities. 

As we continue to develop advanced technologies for talent acquisition, employee management, performance reviews, data analysis, staff upskilling, and improving knowledge transfer and documentation, we're tackling daily challenges that all employers encounter but lack the bandwidth to address because human resource management is not their primary business function. 

To illustrate this point, let's consider employee attrition, a universal challenge in the workforce. For us at Virtual Employee however, this issue is particularly critical because an employee's resignation can potentially lead to the loss of a client. This potential loss demonstrates why human resource management is not just a function but our core competency. Unlike most organizations, this is why we have a heightened motivation to develop technologies specifically designed to address and mitigate such challenges.  

Our ultimate goal is to embed these technological advancements into our services and pass them on to our clients. In doing so, we aim to transform into an AI-driven company that uses innovation to manage talent more effectively than our clients could achieve in-house. While clients currently engage us for cost savings and talent access, our future aim is for them to choose VE for our advanced technology and talent management capabilities, with cost savings as an added advantage.

On the branding and marketing front, misconceptions still exist in small to medium enterprise outsourcing, partly due to a lack of thought leadership in the industry. This year, I’m excited to release my first book on outsourcing, which I hope will become a foundational guide in the industry, followed by a second book towards the end of 2024 or beginning of 2025. These books aim to not only increase our brand's visibility but also strengthen our position as industry leaders. 

Big companies have really stepped up their game in snapping up talent, no matter where it's from – local or offshore. They just see talent as talent, wherever it is. But when you look at smaller businesses, their views on outsourcing have remained stagnant, mirroring perspectives from two decades ago. This will inevitably cause friction because such a viewpoint is not only outdated but also disconnected from current realities. It's interesting, because about a decade ago, we thought things would be different – that the gap between how big and small companies’ approach and thought about outsourcing would've narrowed. But it's actually gone the other way; the divide's just gotten bigger. 

When our staff at VE move on, they're frequently joining top-tier companies like Silicon Valley firms, large banks and insurance companies, and multinational corporations—the competition is intense. Given the salary hikes seen in the US and Europe in tech, large corporations won't hesitate to offer substantial raises overseas.  

In short, professionals casually overlooked by small business owners are actively sought after and pursued by large corporations. This is a challenging dynamic to reconcile—it’s a back to front market—one that has been exacerbated post-covid. 

COVID-19 did two major things: First, it prompted companies to re-evaluate their digital capabilities virtually overnight. Second, it placed technology at the forefront of decision-makers' minds. Initially, technology was a solution to the challenges posed by the pandemic, but it quickly led to broader questions about its potential, further building on its already prominent role pre-pandemic. Now, with the growing focus on and integration of A.I., technology’s importance in the business landscape is more pronounced than ever.  

Keep in mind—we ourselves are developing a lot of artificial intelligence and hire for our own internal needs. Access to talent has become the new battleground—something that isn’t always appreciated. Working with skilled professionals is a major accomplishment, a privilege that many companies are finding increasingly difficult to secure.

By the way, this doesn't mean that outsourcing has become any less cost-effective than it used to be. In fact, it continues to offer significant financial advantages. For instance, Glassdoor reports the average U.S. software developer's salary as $112,351 per year, while Indeed places it at around $118,000. The average graduate salary is $75,000 per year. According to Hourly.io, (which specializes in workers' compensation data), this makes the total annual hiring cost to be approximately $150,000. Therefore, substantial cost savings are of course achievable, but they require an objective perspective. For instance, clients who compare senior overseas professionals with local graduates are shotting themselves in the foot.  

A developer earning $100,000 in the US perhaps we can fill this vacancy at $30,000 a year. However, when clients want to secure such vacancies at $20,000 or $15,000 that’s when things go wrong. While a parsimonious approach may have been somewhat manageable a decade ago, adhering to such a mindset today is essentially self-deceiving and defeating. 

Interestingly, the biggest cost savings are found higher up the corporate ladder, a fact that is unfortunately too often missed, because too many decision-makers are engaged in a race to the bottom and not basing cost saving calculations on impartial data. In short, the competition for skilled talent is so fierce that successfully attracting top-tier professionals can be a more remarkable success than even significant financial savings itself. 

COVID-19 has brought numerous changes, too many to detail comprehensively here. The growing divide in attitudes towards offshore talent between large corporations and SMEs is just one such example.

Looking ahead, we envision VE becoming a global provider for talent. While we recognize and value the immense talent in India, we are excited about the prospect of empowering our clients by leaving it to their discretion where they hire. 

Outsourcing encompasses a wide array of cohorts. We're considering various strategies to segment these under different umbrellas as we grow. However, it's still early days, and our ideas are evolving as we continue to adapt.  

Over the past eighteen months, we have also had a fair bit of interest from private companies, equity firms and investment banks. In the summer of 2023, we more or less had an offer to partner with a multibillion-dollar group from the US. They even came out to India, incognito to tour our offices and get a better understanding of who we are and what we do, something that I thought was prudent. 

However, we declined their interest because their valuation was based on what we had achieved up to date—and with what we have coming down the pipeline, we are confident we will soon be recognized as high tech A.I. company.

Our goal is to achieve a billion-dollar valuation—something we know the right partner can catalyst—so there is a strong possibility that this is something we will most likely revisit at some point in 2024/2025. An investment banker we spoke with a few months ago was very candid about us easily being able to raise investment or partner with a multinational group whenever we felt the time is right, which admittedly is assuring.

Yes, I do.  

There are a couple of key points to consider: 

First, the SME outsourcing market, despite being a multi-billion-dollar industry, is highly fragmented and surprisingly lacks a widely recognized brand. It's quite peculiar and rare to find an industry of such scale and volume without a single established brand. Ironically, when you mention outsourcing to SME business owners, the most common association is with Tim Ferris and the four-hour work week—not an industry expert or a proven company. In essence, the first company to successfully establish its brand identity will experience exponential growth.

Second, while outsourcing is now commonplace amongst small businesses and start-ups, there's still a significant amount of confusion and misunderstanding in the market. Many clients approach outsourcing in a haphazard and unsystematic manner, which often leads to them getting their fingers burnt. 

So, on the one hand, there is the absence of a dominant brand; on the other, a clear need for thought leadership and authoritative guidance in the industry. I believe there's an opportunity for a company to step in and establish itself as the go-to authority in outsourcing. By offering clear, expert guidance on the intricacies of outsourcing, including the essential laws and principles to adhere to, as well as sharing the common pitfalls to avoid, a company can position itself effectively to attain a status as a leading brand in the industry.

Thirdly, and as I've already mentioned, there's the significant role of technology. The value that technology can add for outsourcing will extend its scope far beyond traditional talent and cost saving value propositions. The future of outsourcing is the future of work. We’re talking about transforming how companies operate, and managing staff more effectively than they could in-house.

Admittedly, most decision-makers at present would think this unrealistic. However, the reality we're observing, especially for SMEs, is an increasing difficulty in managing staff internally.  

Numerous studies show that Gen Z prioritizes work differently compared to previous generations, a cultural shift that's reshaping the workplace; accelerated by the pandemic, a shift that contributed to the ‘great resignation’ of 2021-2022. 

This cultural evolution has its positives, like a greater focus on mental health and a reduced stigma around taking sabbaticals for instance. Yet, it presents new challenges for businesses. For example, I recently visited a client, but when I arrived at the company’s offices, there was no one there – not even a receptionist. At first, I thought I had come to the wrong place or that the company might have moved premises. Just as I was about to call the client to find out what was going on, he came rushing out of the building. 

What he shared next was quite startling. The entire software team, which I had met on previous visits – a group of around ten– had resigned. The change was stark; an entire floor, once bustling with activity, now lay deserted. The shift in the workplace dynamic was further underscored by the fact that even their vice president of software development, with whom I had established a good rapport and who had visited our team in India, had moved on. The receptionist, was working remotely, leaving only a skeletal back-office crew on site for tasks that could only be done in person, such as like document scanning. 

The client revealed that their entire software development operation was now at VE, including their most senior technical personnel, (essentially their new CTO). So, on the ground these are some of the challenges small business are facing where there isn’t an immediate or obvious answer. On the one hand we have increasingly stringent labor laws—but on the other company loyalty is at an all-time low—that’s not easy for small business owners to square. I know from first-hand accounts that some executives are spending a lot more time thinking about staff than they are clients—not an easy situation to juggle.

You might argue for better management or company culture. However, as explained by the client I met recently, the issues are more complex. His former employees moved to larger companies in downtown Boston, indicating factors like compensation and geographical desirability. 

The concentration of tech talent in large corporations, coupled with the shift to home working post-COVID, adds yet even further layers to these challenges. Before the pandemic, the complexities and red tape associated with employment were often justified by the need for in-person collaboration. However, with the shift to remote work, the incentive for employers to hire themselves is greatly diminished. In summary, the realm of human resource management presents more challenges for small and medium sized businesses today than ever before. 

As touched on earlier, our objective at VE therefore is to offer a comprehensive suite of advanced technology, proprietary tools, applications, and reports, all meticulously designed to tackle these everyday challenges faced by employers. If we succeed in leveraging our intellectual property and AI to significantly enhance the efficiency of staff management, it could catalyze a shift akin to the transformative impact of cloud technology, thereby unlocking vast opportunities. 

In other words, it's a reasonable hypothesis that in the not-too-distant future, small business owners will openly and readily acknowledge that partnering with a company like ours makes staff management easier than doing it independently. This shift could mirror the gradual acceptance and integration that took place with cloud computing over time. In short, our aspiration is to become the Amazon Web Services in the realm of talent hiring and management. 

Don’t get me wrong—I firmly believe that at present we already simplify the process of employing staff far more than traditional in-house methods do. 

For instance, from an Indian perspective, the bureaucratic and regulatory hurdles our clients navigate often seem akin to 'death by paperwork.' In contrast, we transform hiring into a service as convenient as a subscription. There's no wiggle room for underperformance in our system, offering a level of ease that’s truly invaluable. In almost every metric, we make the experience faster, more convenient, and seamless.

However, these benefits are often intangible and, as a result, are heavily discounted or overlooked. 

Additionally, the human brain is wired to respond to tangible and visceral cues. The daily presence of someone in the office inherently creates a strong sense of accountability and control, leading some decision-makers to perceive in-house hiring as more straightforward and seamless. 

Yet, the ground reality I believe is more complex than this. 

I recognize that the word ‘data’ is frequently used, sometimes overemphasized, and susceptible to misrepresentation. However, a data-centric approach generally proves to be more consistent and reliable than human judgment and impression—at least that's what we have found in our own business. 

This is where I believe technology will significantly impact. The future data, reports, and analysis you receive will tangibly and concretely and therefore better highlight the advantages of our service. Employers might then more readily acknowledge that with the complementary built-in technology and AI we provide, going it alone isn’t as productive.

This potential shift could mirror the evolution seen with cloud computing. Initially, there was significant unease around data and security, but the convenience of the cloud eventually led decision-makers to recognize that managing alone didn’t make sense. Daily interaction with technology could catalyze a similar tipping point in remote staffing. 

Every day when we wake up, our primary question revolves around what technology we can develop to simplify and enhance the hiring and employment processes. Given the current state of technological advancements, it's feasible to re-envision and alleviate many of the conventional challenges faced by businesses. So, even with small, incremental improvements, we are optimistic that over time the cumulative effect will create a substantial gap. 

Lastly, a strategic partnership can significantly open doors and accelerate growth. For example, the group we were in discussion with, in the summer of 2023 had 10,000 of their own clients and they estimated 2-3% of them would potentially interested in setting up captive units of 50-200 team members.  

Considering the numerous factors at play – including a multi-billion dollar industry devoid of a dominant brand and thought leadership, the increasing challenges and complexities of in-house hiring, increasingly intense competition for talent access, and opportunities to partner with multinational corporations (MNCs) – I firmly believe that reaching a billion-dollar valuation is not only realistic but achievable. Our deep understanding of the outsourcing industry and its intricate dynamics places us in a strong position. This ambition isn't merely a pipedream. We have a credible and well-thought-out strategy to achieve this milestone.

I think one of the reasons we often grapple with defining success in diverse aspects of life — whether in happiness, business, health, family, or friendships — lies in our relentless pursuit of a singular, overriding principle or formula. However, success often requires the simultaneous application of multiple, often contradictory, qualities and traits. This concept is counter-intuitive and challenging to grasp.  

If you look at people who are really successful in life, or excel in a particular aspect, you often find they embody paradoxical traits. They hold two opposing qualities at once, which is difficult to balance. It's like walking a tightrope while managing two conflicting sides of themselves. Success isn't just about mastering one desirable trait; it's about making contradictory qualities work together harmoniously. That's a real skill, and honestly, it's pretty mind-blowing how some people manage it. 

For example, to be successful in business, you need to be obsessively passionate. Yet, this obsession can lead to serious burnout. Therefore, if you're solely driven by obsession, you might crash hard, especially if things don’t pan out. So, you must exert an enormous, almost insane level of effort and perseverance, but within that trait lies the potential for your downfall. You also need the ability to detach and not let the fear of failure consume you — which, after decades of hard work, is easier said than done.

Being obsessed with something while remaining indifferent to the results is an almost impossible balance. Usually, when we care deeply about something, indifference is far from our minds. If things don’t work out, it hits us hard. We're human, after all. But in business, if you can't balance that obsession with an irrational degree of detachment, setbacks will become overwhelming, and starting over, if needed, becomes almost impossible. That’s why I referenced the poem ‘If’ by Rudyard Kipling above; he somehow manages to poetically capture this very idea.

We often approach life in very linear and singular terms, but perhaps it's time to embrace a more paradoxical way of thinking. An excellent example is found in two popular business books. On one hand, there is ‘The Power of Positive Thinking’ by Norman Vincent Peale, and on the other, there's truth in ‘Only The Paranoid Survive’ by Andrew Grove. Interestingly, these authors advocate two contradictory paths to success, but I would argue both are essential to truly excel as an entrepreneur. This dualism is something current guidance and wisdom sometimes fail to address. 

Being a paradox — striving intensely without letting it affect you deeply — is a real superpower. If we are at least aware of this need for balance — the yin and yang, being on both the X and Y axes simultaneously — we might discover a different formula and strategy for what we strive for in life. Another pertinent example is the need to be both very urgent and patient in business. ‘Move fast and break things,’ while knowing ‘how to wait is the great secret of success.’ 

The next time you're working towards a goal, look closely. You might find that two divergent principles are at play, with one perhaps more hidden than the other, revealing a hidden path to success. 

The more you become cognizant of paradoxes, you'll start noticing them everywhere — in business, work, sports, psychology, nature, art, society, and culture (and as a side note why I named an educational start up I launched in 2018 Paradox Marketer because it’s an overarching principle in marketing too). Perhaps, most interestingly, physicists, when trying to decipher and explain the fundamental laws governing our Universe, encounter numerous bizarre paradoxes. Its almost as though the ‘paradox’ is an overriding law, at the heart of the mechanics of how everything works. Although, if an overarching principle for success is to be paradoxical — this is where things get even more interesting because it contradicts everything, I’ve just said about approaching success unilaterally.

My first book represents a unique blend of psychology and outsourcing, bridging these two seemingly disparate fields.  

At its core, the book addresses a compelling question: Why does the prospect of saving millions of dollars often fail to appeal to many decision-makers? To unravel this mystery, I delve into the unconscious forces and cognitive biases that shape our perceptions of outsourcing. These underlying psychological factors play a critical role in how we approach outsourcing decisions, the errors in judgment we frequently make, and ultimately, our success or failure in this domain. 

The book aims to illuminate the cognitive illusions that can mislead us in our decision-making process and sets the stage for a deeper exploration of how to excel in outsourcing. You see—before we can delve into the 'how' of successful outsourcing, it's essential to understand the 'why' — why we presently think and do as we do. I hope this book will empower readers to approach outsourcing with greater objectivity, leading to more successful outcomes in their ventures.

One crucial aspect I wish customers understood better about outsourcing is the diversity and uniqueness of each outsourcing service and company. There’s a common misconception that a company thousands of miles away provides 'the exact same service' as another, but the reality is that even a company in the next block could be vastly different from us.  

Every company has its own unique dynamic, processes, business model, culture, talent pool, technology, and experience. It’s a gross oversimplification to assume that two companies offer identical services, even if they appear similar on paper—and often, even this is not the case. 

Some clients falsely perceive remote staffing companies as merely providers of infrastructure and HR services—offering just office space, hardware, recruitment, and payroll services, and not much else. This perception, viewing these services as uncomplicated and easy to facilitate, partly explains why some decision makers have a commoditized outlook on outsourcing.

However, as any decision maker should know, human resources are the most difficult resources to manage. People are incredibly complex and unpredictable, dynamics that require even more competence in the context of staff augmentation, as it involves integrating one company’s business unit(s) into another’s operations. In short, many clients don’t realize that in addition to HR, service delivery, IT and talent acquisition, we are also in the business of human psychology—a highly sophisticated undertaking. This, coupled with the technological innovation in how services are delivered, streamlined, and facilitated, means there are a lot of moving parts and complexity on both fronts. Every service provider has its own unique approach and capabilities in achieving this, making it impossible and naive to think every service provider is the same. 

Even for straightforward back-office tasks, the nuances of operations and the requirements of the broader ecosystem necessitate a skilled and competent partner. Consequently, treating professional services as mere commodities is a flawed approach that can lead to problems. This perspective is rarely applied to local services and is even less appropriate for outsourcing.

Many dynamics influence outsourcing, but one key aspect can be understood by watching the 'Invisible Gorilla' experiment on YouTube, which vividly illustrates inattentional blindness. 

In this experiment, participants watch two groups passing a basketball and are tasked with counting the passes made by one team. Surprisingly, even when a person in a gorilla suit walks through and thumps their chest, about fifty percent of the participants fail to notice it. This outcome demonstrates the illusion of attention: when we focus intently on one thing, like texting while walking, we can completely miss other significant, even conspicuous, elements, like a potential obstacle. 

Inattentional blindness isn't just visual; it affects all our senses, including our decision-making faculties. The experiment serves as a metaphor for our human tendency to overlook blatantly important things. 

There are three key points to consider in the context of outsourcing:

• Inattentional blindness explains why we often miss red flags in our daily lives, (not just when outsourcing). 
• When outsourcing, decision-makers, fixated on cost or preoccupied with other business priorities, are likely experiencing inattentional blindness.
• The digital nature of outsourcing makes us more susceptible to the effects of inattentional blindness. The remote aspect therefore demands greater diligence, but clients are typically and ironically more complacent and impatient.

My number 1 tip for outsourcing therefore is to visit vendors on-site. This approach has two significant benefits:

• Focused Attention Overcomes Inattentional Blindness: Visiting vendors on-site helps to ringfence your time and focus, effectively countering the pitfall of inattentional blindness. Achieving this level of prioritization from your office is harder, because even well-intentioned decision-makers, often find themselves preoccupied or distracted by core operations and mission-critical tasks. 
• Enhanced Transparency and Understanding: On-site visits allow you to more easily see more of the moving parts of the outsourcing process, helping to make it more transparent. Many clients have shared with me how visiting vendors in India, offered them a completely different perspective. In summary, being on-site makes a more comprehensive evaluation easier, thereby increasing the likelihood of you including more crucial parameters in your decision-making process.

A website can act as a veil, making an unproven entity appear as a well-established business. The key for clients is to look beyond the surface, assessing a vendor's true nature and what lies behind their online presence. Naturally being physically on-site is perfect for this, and hence the most optimal advice that I can give.  

Whilst conducting this assessment remotely is certainly possible too; it demands greater dedication and discipline from clients in their evaluation process. Because pragmatically a rigorous approach can be challenging for time pressed decision-makers, the great benefit of visiting vendors on-site is that you can intuitively eliminate unsuitable options. In short, it makes decision-making simpler. 

Remote evaluation, in contrast, requires a more methodical and systematic approach, demanding robust and strategic decision-making. In theory, remote evaluation shouldn't differ in effectiveness, but my experience with over 50,000 decision-makers in sixteen years suggests otherwise. The reality is that scrutinizing outsourcing options often falls low on the priority list for many executives, leading them to succumb to optimism bias and wishful thinking.  

While it is time-consuming, with potential travel of a week or more to go aboard, this investment is worthwhile for two key reasons. Firstly, if outsourcing goes wrong, it can lead to significant wasted time and energy. Secondly, and perhaps more crucially, a successful outsourcing strategy can be a reliable tool for the long term. At VE, consider the example of one client who has been with us for nearly fifteen years. They have utilized services as wide ranging from niche software programming and mobile app development to research and data entry. In other words, outsourcing is a powerful tool to have in your arsenal of business strategies. The opportunity cost of failing in outsourcing and losing this strategic advantage is considerable. When done correctly, the returns on your investment in terms of time and resources can be substantial.

While it may seem contradictory, it's important to re-emphasis that although the digital nature of outsourcing make us more vulnerable to inattentional blindness, this doesn't automatically result in problems. Generally, warning signs are evident and clear, provided there is a comprehensive evaluation process in place. However, it does mean that negligent decision making increases the likelihood of you missing the proverbial 800-pound gorilla in the room. 

Because inattentional blindness only becomes problematic when we act recklessly, the real issue therefore stems from clients not dedicating the necessary time to the outsourcing process. Many lack a systematic approach, fail to objectively evaluate proposals, and do not effectively communicate with vendors, instead placing excessive emphasis on quotes. 

For well-intentioned decision-makers who can't visit on-site, focusing on the basics of outsourcing is an excellent starting point and can significantly improve outcomes.

• “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” Abraham Lincoln

Investing time into the process is essential – there are no shortcuts. By dedicating time to both exploring and critically evaluating options, many important factors will come to light. Often, crucial considerations remain hidden simply because clients have not fully thought through the implications of red flags.  

Investing time in the outsourcing process ideally includes patience. While decision-makers sometimes require instant solutions, these are rarely optimal.

We observe the highest success rates with clients filling senior or technically demanding positions. Why? Typically, these clients allow more time for shortlisting candidates and take longer to scrutinize and make hiring decisions. This extra time is beneficial; it allows us to identify the best and most aligned candidates. This approach might mean starting the process several months after initial contact, but the results speak for themselves – these clients are by far the most satisfied and successful. Essentially, this is high-quality outsourcing at its best, akin to headhunting top talent. Unfortunately, due to the slower turnaround time, most clients perceive this premium, bespoke service level negatively, closing the door on the best of what outsourcing can offer. 

At times, clients pressure vendors for immediate solutions, threatening to take their business elsewhere. This incentivizes vendors to cut corners to avoid losing business and ironically does not serve the client's best interests.

As a decision-maker myself, I understand the need for quick solutions at times. However, unless you're in a situation demanding urgency, take your time and avoid rushing the process. I've seen many clients inadvertently forego what could have been the most effective solution due to haste.

• “The two words ‘information’ and ‘communication’ are often used interchangeably, but they signify quite different things.” Sydney J Harris

My second tip extends from the first: the lack or reluctance of customers to communicate with vendors is often a by-product of not investing enough time in the outsourcing process. However, its importance is so substantial that it deserves to be highlighted as a key principle in its own right. Sydney Harris’s quote perfectly encapsulates a prevalent issue in the outsourcing industry — clients often provide only snippets of information, but no meaningful communication actually takes place.



The lack of communication from clients is not an exaggeration. Many clients offer minimal specifications and expect reliable quotes in return and decline requests for further discussion. This approach — attempting to outsource projects halfway across the world without even a phone conversation — is inherently flawed. As the adage goes, 'a good relationship starts with good communication,' so a partnership devoid of communication is likely to fail from the onset. 

Engaging in conversations with vendors, even those you don't end up working with, is not a waste of time, contrary to common perception. In fact, if a discussion leads to the elimination of an unsuitable option, then it is a productive use of one’s time precisely for this reason. Unfortunately, some clients apply a reverse logic here. In their quest to 'save time' and 'maximize cost savings,' clients often superficially assess proposals based on price, inadvertently shortlisting rogue vendors who typically satisfy the superficial criterion of being 'the cheapest’.

• “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.” Red Adair

Many clients operate under the belief that a cheaper quote equates to higher cost savings. My final piece of advice is to avoid falling for this overly simplistic and misleading notion.

Simply put, a quote can be arbitrarily set, but true cost savings are only measurable after the completion of a project. As Red Adair's quote astutely implies, opting for the cheapest option is seldom the most cost-effective strategy, something that applies just as much overseas as it does locally. 

I urge customers to adopt a more holistic and nuanced approach when evaluating quotes and their relationship to cost savings. There are various cognitive biases and pitfalls to be aware of in this context. For those interested in delving deeper into this topic, I have written a comprehensive article that offers more detailed insights and practical steps to consider https://www.virtualemployee.com/blog/7-must-know-principles-of-cost-saving-when-outsourcing-part-1.

• “In God we trust. All others must bring data.” W.Edwards Deming

Even when clients avoid the aforementioned pitfalls, there’s still the challenge of trusting the data and evidence, even when it points conclusively in one direction. 

For instance, I recall a client who openly preferred our developers but kept reconsidering another vendor over a minor cost difference. Despite the data clearly indicating the better choice, the temptation of a slight cost saving still clouded his judgment.

As a side note, if this client had visited our on-site facilities, experienced our state-of-the-art offices, superior service delivery, and support departments, and compared them with the other company's mediocre offerings, his decision-making process likely would have been more straightforward. This essentially exemplifies why ideally; I advocate on-site meetings with vendors where feasible. In both scenarios, the signals and data were clear, but on-site office visits make them tangibly clearer and therefore more compelling, facilitating decisiveness. Put simply, being on-site brings a dose of reality, because the red flags and pitfalls become almost impossible to ignore; not necessarily the case during remote evaluation. This direct engagement anchors clients to more realistic expectations and decisions. 

In short, due to the increased susceptibility to wishful thinking in remote assessments, particularly with attractive proposals, it is crucial when outsourcing to firmly follow the direction indicated by empirical evidence. Once this evidence points clearly towards a specific choice, that decision should no longer be in doubt—clients should trust the data! 

In conclusion, these four tips provide an excellent starting point for anyone considering outsourcing. Reflecting on these principles, you'll notice a common underlying theme, which could be considered a fifth tip: adhere to time-tested business principles.

A common mistake when outsourcing is the abandonment of established principles that are typically observed in local business practices. Put simply, don’t deviate from proven business values simply because you are offshoring. 

While there are more advanced and sophisticated laws of outsourcing, which I discuss in my upcoming book slated for release in 2024, delving into them here would be premature. The reality is that many decision-makers are not even adhering to the basics. It’s essential to master these fundamental principles before exploring more complex aspects of outsourcing. 

Daily we come across clients who express that they don't have time for a phone call. As mentioned earlier, they perceive that spending time in meaningful dialogue is contrary to outsourcing's core value proposition, of saving time. However, outsourcing is not a magic pill. If someone is too busy to properly scrutinize outsourcing options, I would advise refraining from outsourcing altogether. It requires careful consideration and cannot be done half-heartedly or haphazardly. 

While my advice might seem stern, its intention is to guide and protect potential clients. Sometimes, a dose of reality is necessary for effective help. The fact is that many clients approach outsourcing negligently, and my aim is to prevent them from adverse outcomes. If avoiding outsourcing means preventing negative experiences, then it's a preferable outcome. After all, poor results in outsourcing don't benefit anyone, and it might be better for some clients to abstain from it altogether.