It’s not uncommon for some of the most forward thinking and agile businesses to make an offshore play and move parts of their business overseas in a bid to reap the rewards associated with this, including scale, efficiency and savings, not to mention accessing a fresh pool of technology talent at a fraction of the price you would pay closer to home.
Outsourcing and offshoring can quickly increase your output, improve your technical skills and expertise as well as expanding your business capability with limited associated costs. In the past, a key barrier or objection was geography; with companies wanting their IT teams all in the one place, but thanks to Covid-19, the world got a whole lot smaller; location and where you hang your hat became irrelevant.
Whilst these benefits on their own can be the catalyst in your decision making process, it’s useful to understand the fuller picture in order to maximise the opportunity.
Regardless of how much money can be saved from offshoring, one of the biggest considerations should be culture and the cultural fit between the two partnerships organisations.
In the past, culture has often been cited as one of the biggest challenges to successful offshoring. While many people might nod along when reading this, it’s important to be fully aware of just how important is a good cultural fit and don’t just pay lip service to it.
Geert Hofstede did a great deal of research in identifying cross-country cultural differences based on six measures and highlighted that commonly Western countries like the U.S. and U.K. are more individualistic compared to the collective culture in Asia. Asian countries score high on long-term orientation whilst commonly countries are more short-term oriented. His work can be viewed here: https://hi.hofstede-insights.com/national-culture. It’s a useful read.
There was another study, which interestingly considered the “MUM effect” (the reluctance to share bad news). This is considerably important when working on a project with split teams. The study indicated that the risk of MUM effect is higher in Asia than in the West. Of course, there are caveats and assumptions in these studies so please consider any outsourcing opportunity with an open mind.
As much as you can look at culture from a “macro and holistic” point of view, it’s useful to take these studies with a pinch of salt and instead look at the individual team / company you might want to partner with.
If you have identified some sensitivities or if you are faced with them, there are proactive measures you can implement. The first; training for everyone – all teams; onshore and offshore. This will help everyone to understand and appreciate the cultural differences and learn how to better work together.
A key reason why we have been successful in delivering large scale transformational change using a high proportion of the project resource offshore, is because we always take key business Subject Mater Experts from the onshore team and use their domain expertise to configure business domain training and assessments in to our own Learning Management System (LMS) as part of our Delivery Academy. The offshore technical teams, all undertake these learning programmes before they are deployed on client sites. This not only makes the offshore teams ‘client ready’ but essentially reduces any of the classic tensions encountered between ‘Business and Technology’ and ‘Onshore and Offshore’. Essentially, this approach drives congruence and helps us to be ‘one team’ with ‘one culture’.
Another tactic is to have a member of the onshore team deployed to the offshore team to ensure cultural communication is always aligned.
Alternatively, we often land our offshore resources ‘onshore’, to maximise knowledge transfer between client and the offshore team as required. This means our clients build strong relationships with our offshore resources and tend to engage them directly when knowledge transfer is complete and they are back overseas. This has frequently helped to reduce technology costs even further – another benefit of getting culture ‘right’.
As the lead partner you should look to make a conscious effort to be aware of any cultural differences. Addressing the cultural barrier requires a shift in individual thinking – we must rely on individuals to re-shape, re-align and re-adjust their thinking and at times behaviours; not such an easy task. When it comes to culture and cultural risks and considerations there’s no “right or wrong”. Crack culture and it’s likely you’ll crack the rest of your outsourcing initiative.