Request
As a growth driver for mid-to-long-term business expansion, we would like support with establishing our first offshore development base abroad. This includes conducting multi-country market research, providing initial consultations at the business concept stage, creating a business plan, establishing a local corporation, recruiting and training engineers, and building an organizational structure.
Our Support
First, we conducted a business concept hearing to determine the target country, followed by a survey for selecting a country for expansion. Simultaneously, we drafted a business plan, gathering information on industry trends both domestically and internationally and initiating local research. To prepare for launching the offshore development business, we proceeded to the Philippines, where we began M&A negotiations with local Japanese offshore development companies, established a local corporation, and comprehensively managed the setup of the overseas business project, including building the organization from scratch as the on-site representative.
- Detailed hearing of business concept
- Assistance in preparing a 5-year business plan (primarily quantitative income statement)
- Selection of target countries for offshore development sites
- Confirmation of client company’s system development project flow
- Creation of local subsidiary recruitment plan
- Local subsidiary capitalization formulation
- Negotiated with local offshore development company (initial M&A negotiations -> transfer of key employees as a result)
- Visiting business and meeting with local accounting and law firms, service offices, etc.
- Creation of an implementation schedule for each item based on the business plan
- Selecting members to assign to pilot projects
- Local company registration (in cooperation with local law firm)
- Accounting Firm Contracts
- Update business plans as needed
- Local employee recruitment and management
- Cross-border communication check
- Bridge engineer recruitment and management
- Devise and implement measures to improve development quality
- Training to eliminate communication errors
- Establishment of employee regulations
- Personnel evaluation system development
- Monthly cost management for local subsidiaries
- Local subsidiary operation and management
- Developing benefit plans to improve employee satisfaction and retention
- Local management personnel development
- Establishment of organizational structure to strengthen the organization
- Revision of personnel evaluation system
- Development of training plan
- Consolidated closing of accounts (in collaboration with the client’s head office’s outsourced tax accountant’s office)
- Audit support (in cooperation with a tax accountant’s office at the client’s headquarters)
- Budget planning for the next fiscal year
- Handover coordination to head office personnel
Results
- Expanding business while maintaining one-third of the turnover rate of the same industry in the Philippines
- Achieved the company’s highest growth rate & built the largest profitable business (700% sales growth rate compared to the first year)
- Achievement of hiring based on workforce plan (30 local subsidiary hires / 8 Japan hires)
- Improvement of employee satisfaction, significant improvement of development quality, and reinforcement of the system by eliminating frequent communication errors that occurred in the early stages of the project
- Formulate an efficient cross-border system development flow
- Establish a system for smooth ongoing business expansion and business takeover
Comment from the person in charge
In the case of this client’s overseas expansion, a cross-border project structure in which large-scale system development for a Japanese client is carried out at an offshore base was essential. In general, there are two types of offshore development: lab-based development, in which only engineering resources are provided, and contracted development, in which project management and deliverables are involved.
First, if a company has no or limited experience in offshore development, it is basically assumed that the pilot project will fail, and it is required to look back on the project in detail and review the development flow, resolve communication errors, eliminate bottlenecks in various areas, and other negative factors in the midst of failure. In order to strengthen the system, it is necessary to repeatedly improve the system and the quality of the system by reviewing the development flow, eliminating communication errors, eliminating bottlenecks in various areas, and ensuring that the negative factors are eliminated.
In particular, if we Japanese unintentionally communicate with foreign nationals or offshore development members in a high-context manner that is peculiar to us Japanese, we will soon find ourselves at odds with our own perceptions due to critical communication errors, which will affect quality, cause many bugs, and reduce the on-site engineers. This frequently leads to quality problems, many bugs, and a loss of motivation among the engineers on site.
Early resolution of these issues is the most important matter for mid- to long-term business growth, and two-way understanding and compromise between Japan and the offshore development center is essential. As a solution to this problem, an interactive training was very effective.
This training program provides detailed training to members of the offshore development base on the communication characteristics and decision-making flow of Japanese people, and thoroughly trains them on how they should be perceived and understood, and how they should communicate with each other. At the same time, bridge engineers and project managers on the Japanese side received training on how to communicate with foreign personnel, how to make appropriate requests, and cross-cultural understanding in both directions, leading to a better understanding of each other, eliminating communication errors and improving employee satisfaction and quality.
As a result, we were able to contribute to the largest growth drive business, growing 700% year-on-year in our second fiscal year. The shortcut to success is to be accepted by the local market, invest in the right employees, and develop the business not from a short-term perspective, but from a long-term profit perspective.
