Does offshoring success depend on the ‘shore’ or the people?Hangt het success van offshoring af van de ‘shore’ of van de mensen?Does offshoring success depend on the ‘shore’ or the people?Hängt der Erfolg von Offshoring von dem “Shore” oder von den Leuten ab??
A friend sent me this Dilbert illustration; I had to study it several times to conclude what’s the main message to me. You could interpret it in many ways; for me it drives home one thing: the success of offshoring depends on people, not on ‘bestshore, nearshore, rightshore, offshore or farshore’. The offshoring industry has come up with many confusing definitions to describe a simple thing: hiring people from another country to do a project or (parts of) a process. (For an interesting thought article on terminology, read this article of Gavin Bowden-Hall).
The central question is what people do you need?; based on that you could select a country, a company or individual(s). You can find the right people in any country. Some countries market themselves with a certain specialization: India is ‘the IT destination’ and China the ‘factory of the world’,but I believe you can find good factory workers in India and good programmers in China. Some countries have a larger labor pool than others and this is an important aspect to decide on the ‘shore’. I experience firsthand that it is much easier/faster to find skilled people in India than it is in Eastern Europe. A third consideration regarding people could be the ‘fit’ with the culture; do you feel more comfortable dealing with people from India, China or Eastern Europe. Maybe you have first hand experience or you have visited the country as a tourist. Although I touch Dilberts racism point here easily, I believe ‘liking’ the country/culture/people adds to the probability of success. Another approach is to look on company level: what company can provide me with the right people. You skip looking at the country level (or limit the search to companies in certain countries or a timezone), but look for the best fitting company. Bottom line is: it is not the country
The remark of Dilbert ‘but we never succeeded because we’re incompetent?’ touches an important success factor in offshoring too: the readiness of (people in) your organization. No matter to which ‘shore’ you move, to make offshoring work, your organization needs strong processes and the people (especially the management team) need to support the change. It is not only about the right shore or the right supplier, it is also about you looking ‘inwards’ into your organization and creating the structure required to succeed in offshoring.
It’s all about people. The ‘right people’
About Hugo Messer
Hugo Messer is a Dutch entrepreneur, distributed agile team specialist, and author. He is the founder and owner of Bridge Global, a software services provider, and ekipa.co., an agile coaching agency. He has been building and managing teams around the world for the past several years. His passion is to enable people that are spread across cultures, geography and time zones to cooperate. Whether it’s offshoring or nearshoring, he knows what it takes to make global cooperation work.
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Destination depends on specific needs, competencies etc. Indian companies offshore to China or Vietnam too.
Most crucial factor quality of the people involved. Culture and communication being the decisive factor most of the time. A lot of work is still to be done in that field for both the Dutch and the foreign (usually Indian) companies. For more details see Outsource Magazine December 2010 page 26.
Slowly both parties start to understand the importance of a proper training in culture and communication to work more efficiently and increase substantially their success rate. Too easily all this is taken for granted while their knowledge is quite insufficient. In an ever more competitive environment this might be a fatal mistake.