16 November 2012

Why are there so many negative stories around offshoring?

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.

7 thoughts on “Why are there so many negative stories around offshoring?
  1. I guess that we outsource to easily and without being aware of the implications which in my opinion are due to soft inter-human and cultural factors. So we make a superficial decision based on the fact that ‘they’ over there speak good English and have a university degree and 4 years of experience and are therefore able to do the job.
    Than after passing over the briefing of our project we relaxed and assume that the team will make a good effort all will turn out OK. When problems arise we become suddenly aware of the ‘distance’ between us and the team which is ‘far away’. Far away or distance has little to do with geographical distance but more with cultural distance different cultures live in a different reality. It’s much harder to explain the functionalities of a dating website to an IT person in Asia who thinks it’s logical that the oldest brother has the task to find a husband for each of his sisters. Maybe he can understand the concept but its unlike he will add value to this strange approach to find a partner. In contrary: the local IT person in Europe is already searching and comparing possible partners via similar tools and will have an opinion and some value to add. Read Hofstede about Cultural Differences and you will understand a lot more about outsourcing.
    So I guess a lot of the negative stories about outsourcing are not about the outsourcing itself but about a lack of communication, understanding and awareness between different cultures.

  2. Because it is systematically over-sold, and very often ends up in problems instead of solutions…Many buyers mainly listen to the pros, not the cons, and many offshoring/outsourcing-sellers only present limited info about the cons. The result: Negative results and negative stories.

  3. Hi Hugo!

    Managing the offshore team of specialists is quite different type of HR management if comparing with traditional process. I think one of the major reasons why peoplr get negative experience is because they are not ready for this difference.
    Before hiring offshore team one should do some research in order to find out how it works better.

  4. My main problem with “outsourcing” is that it makes 1% of the population astronomically wealthy while reducing job prospects and opportunities for 99% of the population of the country whose jobs are “outsourced”. If you live in India, Malaysia etc and are rejoicing about your new “outsourced” job, don’t spend too much money celebrating. It’s only a matter of time before the “suits” find someone, somewhere willing to do your job cheaper. Then you, too, will experience the negative aspects of “outsourcing”.

  5. There are a lot of negative offshoring stories and a lot of reasons, too. Outsourcing projects fail to progress and/or continue because both service provider and buyer have failed to set their foundations firmly. When I say, that includes the statement of work and clear objectives/goals. It is also possible that they have a mismatched partnership. You see, not all outsourcing companies are equal in terms of expertise and capacities. It is important to learn the areas that should be considered before outsourcing such as People, Processes and Technology. Looking into these areas will help you decide whether the outsourcing provider is the right partner for your company.

    This is why we try to make our website as informative as possible, to give businesses the chance to make their outsourcing partnership work because, truly, outsourcing can be beneficial if done the right way.

  6. The number one reason is of course job attrition followed closely by quality control. Too often those in charge of an outsourcing project leave much to chance. Just as you would want to “manage” any outsourced manufacturing project in the states, it is even more imperative to have a trusted associate or team on the ground managing day to day activities wherever something is being outsourced.

    Not everything should be outsourced and many are mired down with indecision when determining whether something should be considered for offshoring. Freight, startup costs, quality and IP protection should be at the heart of every analysis and decision.

  7. not enough qualified project managers who understand difference in language and culture. People start ofshoring because they dont have the funds, and they get crappy results because they don’t manage their projects well enough. They would have the same results with local developers, but dont have the money to work with them and screw up their unmanaged projects.

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