Offshore Outsourcing Issues – By Lisa Noronha

Offshore Outsourcing is a tactical move and the goal is to build a long-term association in which you expect the unpredicted and deal with real issues. Many companies today are outsourcing offshore. However there are consequences and bigger impacts that come with this decision.

Following are some of the issues faced during Offshore Outsourcing:

Cross-Cultural Differences

Cultures are different. People from different cultures are different and have various ways of screening the same problem and often this is a cause for misinterpretation in offshore project. In fact, majority of businesses, offshore IT and BPO projects quote cultural differences to be the one of the major issue they faced in their projects. Often the company is unable to understand the work idea of the offshore service provider and this leads to incapability to work mutually in harmony.

 

To tackle the cultural issues one must:

• Learn and be aware of it during the offshore vendor evaluation process and make definite that it matches with their own corporate culture.
• Execute a model project with the offshore team to understand how they work together with your team in solving and escalating the issues.

Communication Problems
The Offshore service providers operate in a location which follows a time zone which is not same as the client which eventually may cause problems in communicating in real time. In addition to that usually there are chances of misinterpretation e-mails which will result in time-consuming responses from offshore providers. Thus it would delay the project and at last may reduce the efficiency of the team members. Issues with communication are the main reasons for the failure of many offshore projects.

Noncompliance with Government Regulations
In any outsourcing initiative, one need to keep in account the government rules & regulations of both countries. Particularly it is significant to understand the standards of Auditing. Few types of works are difficult to be outsourced to offshore locations due to officially permitted restrictions. You need to do proper due diligence before you consider offshore locations

Unclear Scope of Project
Companies should state the scope and goals of the project unmistakably to the offshore vendor. Though it is not a very difficult simple step, organizations tend to fail to communicate it to the offshore vendor, thus resulting in the failure of the project.

 

By Lisa Noronha

(A Sourcing Guru since May 2011)