Why your offshore outsourcing endeavour will be most likely a disappointment
Offshoring is an appealing strategy to realise your business goals, and many companies jump to the move without actually thinking about the challenges that might come in the way. The main aim behind offshore outsourcing is to make things easier for your company, so you can channelise the resources towards other goals.
When you have skilled talents from other sources working on certain projects for your company, your company’s resources can be utilised for other purposes. In offshore outsourcing, you hire one or more companies from another country to do the IT or IT enabled processes. This company could be from a different continent, so your team need not be from the neighbouring countries.
When done correctly, offshore software development gives you access to high-quality services at economical costs, when compared to the other alternatives. There is a fast-growing talent pool and excellent infrastructure available in these countries, namely, India, Latin America, Philippines, China, Russia, etc. Some Eastern European countries are also joining in the foray of providing high quality IT talents.
In spite of the hype created by the benefits and advantages of offshore outsourcing, there are some challenges that might not make it the right choice for everyone. It is true that offshore outsourcing is not for all but with a little caution and making the right turns, you can reach the desired destination. Here’s how you go about it.
How you can convert a big disappointment into an asset
1. The bone of contention will always be the extent of control
Everybody likes to take control, but who takes the responsibilities willingly? Especially when you have to answer to someone. When a service provider contracts with a company on a particular project, it is imperative to reach a decision on how much freedom the service provider has regarding the project, and how much the company can involve with the management of subcontractors.
This is an important point that should be included while drawing up the contract, and to prevent future altercations. If a company contracts a service provider for a particular project, it is the responsibility of the service provider to complete the project with that particular team. Any change in that should be made crystal clear to the company. So clearly write down what kind of decisions the service provider can make, and how much control the company can dictate to the service provider.
2. Being vague about the potential costs and risks
It is important for the business to have reasonable expectations regarding the service provider. Having unrealistic expectations can result in great disappointment. It is indeed a challenge that shouldn’t be taken lightly. It is important for everyone to be on the same page when the project begins. The service provider should be transparent with the costs involved, and the potential costs involved, and should not never lie for fear of losing the project. There is no shame like losing a client and leaving a potential business owner disgruntled, because bad news always travels faster.
3. Holidays and disgruntled employees
The holiday season gives disgruntled employees because they prefer to spend time with their families or go on vacations. They wouldn’t prefer to be tied to their phones for work-related calls. The problem happens when you outsource to a country that follows different religious rules altogether. And the holiday dates for public holidays would be all different too. So if you want the work to go uninterrupted, you might have to discuss the holidays with the service provider and reach an agreement to avoid disappointment.
4. Your English is not my English
While you can get a team of workers who can communicate in English, there is no guarantee that they will be familiar with your style. Many businesses have realised this quite late into the project that while both parties speak English, what they actually mean could be different.
Unsaid assumptions are another problem. Especially when the communication is not face to face, there is no way to decipher what the other party thinks. It is important to put the communication in actual words, rather that making facial expressions in video conference calls and grunting in voice calls.
The discrepancies in English language, and their understanding of both parties is important. Once these challenges are crossed, you can improve the business dynamic.
5. Just failed to deliver
The worst nightmare of every business owner might come true when the vendor fails to deliver. There could be a number of reasons why the vendor couldn’t deliver and if you don’t have a contingency plan, you’ve lost your resources and time. If you are outsourcing for the first, make sure you hire a vendor who has the highest success rate in delivery. If you have enough budget, you can hire multiple vendors to reduce risk.
6. Time and effort for transferring knowledge
There is time and effort in transferring project knowledge to the vendor. They will have to communicate the same to the team behind the project. Improper transfer of knowledge will lead to productivity decline, so if you are not actually travelling to the vendor to explain the project requirements, deploy all necessary modes of digital communication to cover all points. Decide on the number of team members because you cannot increase and decrease the number and change the people later on. Make sure there is no lag or mistake in transferring knowledge.
7. Data breach and loss of intellectual property rights are the biggest threats
Outsourcing becomes the biggest mistake of your life when the security of your data gets breached, and you can do nothing about it. Make sure the vendor does not leave the back door open so the core information about your business and its secrets gets stolen.
To make sure this doesn’t happen, sign legally binding documents like NDA with the vendor. The vendor will then be more careful about keeping that back door open. For example, if the vendor is serving the healthcare industry, they have to follow the rules and regulations mandated by HIPAA (Health Insurance Portability and Accountability Act).
Closing Thoughts
These are some of the challenges that businesses face when they outsource projects to vendors, it is possible to overcome them by following certain rules, and not being overly hasty.
Vendors also make it a point to cross all the ’t’s and dot the ‘i’s before they embark on a new project. After all, they need to be worthy enough if they want to land another big project. Vendors also indulge in extensive training programs to ensure their team members converse well, understand the language and the culture of a foreign country, the social activities, and even the mode of dress. This way you can turn something that could have become a disappointment and a liability into an asset that will turn your business around.
True, outsourcing is no cakewalk, but it is imperative to know where the challenges lie, and work on them.
Interesting Links:
The Benefits & Advantages of Offshore Outsourcing
Pictures: Canva
The author: Sascha Thattil works at Software-Developer-India.com which is a part of the YUHIRO Group. YUHIRO is a German-Indian enterprise which provides programmers to IT companies, agencies and IT departments.
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