Outsourcing has become the trend of the last decade as many technology companies have been able to get their product development done at a significantly lower costs without compromising quality and delivery schedules. But there can be substantial risks involved if the process is not handled correctly costing the company significantly.
One of the largest risk with any offshore project stems from communication and collaboration challenges, especially when outsourcing to a different continent or geography with different time zones and distance separation. Language barriers, cultural differences and the lack of face-to-face communications may significantly delay your timeframe and add unanticipated costs including travel and training, resulting in lost opportunities in the marketplace.
The preparation phase should address these factors prior to working with an offshore outsource partner:
Cultural Differences: Culture in general is difficult to assess because of issues relating to language, traditions, values, beliefs, and distance. Awareness of these differences is key in reducing communication gaps and preventing misunderstanding. Over time, we have seen this barrier decreasing due to increased awareness, exchanges, directional travel and training. A good example is the national holiday schedules. Every country has its own set days of holidays and we have seen many schedules disrupted because of the gap. Make sure your deadlines take into account the holiday schedules of all the teams involved in the project. This will avoid the last minute rush, surprises and project delays.
Organizational Differences: U.S. organizational structures are generally flat with greater access to leadership. Employees can frequently make more independent decisions. Employees in many other countries (including India) usually have a more hierarchical structures which may slow decision making and delay product development. It is important to understand the management structure and decision making process up front. Communicating through the project manager assigned to the team is always a good idea. For example, in India, programmers are generally shielded from communicating directly with the clients. Reasons may include language barrier, lack of visibility to the big picture or inadvertently making unrealistic commitments.
Educational Background Differences: This might be controversial. Our system of education defines our way of thinking and addressing problems. In some countries, following a predefined learning process is actively encouraged whereas in others, especially US, critical thinking and innovation is the norm. We have seen many instances of misunderstanding and project delays because of these differences. In general, we encourage communication and work directions to be as specific as possible to avoid any confusion. When critical or innovative thinking is required, it is best to communicate as early in the process as possible. Going back to cultural differences, an innovative solution for one geography may not be applicable in another due to different context, background or simply different way of problem interpretation.
Outsourcing is not off-loading and if these challenges are not addressed early on, the projects can fail or not not deliver as expected in terms of quality, functionality or timeliness. Some of these challenges can be addressed by working with partners who have close geographical proximity with existing teams. For examples business in US may want to consider working with partners in Mexico and Canada.