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<\/strong>Last week, I was featured in a\u00a0Dutch radio show on BNR\u00a0<\/a>about offshore outsourcing. The topic was \u2018does offshoring create cost advantages?\u2019, \u2018how is the quality of offshore work?\u2019 and \u2018the do\u2019s and don\u2019t of offshore outsourcing\u2019.<\/p>\n The experts in the studio were asked to react on my statements.\u00a0<\/strong><\/p>\n The first topic was why offshore outsourcing: what are the reasons companies would outsource work offshore.<\/strong> My statement was that \u2018best\u2019 reason to offshore is \u2018value creation by attracting talented people\u2019. If the focus is on creating extra value for customers (through faster time to market, higher quality, more innovation, etc), the success of offshoring is seen from another perspective than with a focus on cost savings. As with almost any project in the world, it always takes longer and costs more than you expected. This causes people to conclude that the project was unsuccessful, while the result (the value) might actually be very positive.\u00a0The second reason is cost savings.<\/p>\n Vikram Kapoor<\/a>, owner of isense, said that the focus should be on \u2018added value by involving talent\u2019. A few years back the main reason for offshoring was \u2018capacity\u2019, during the recession it move more to \u2018cost savings\u2019. But if you go offshore with costs as primary motive, you will get disappointed. You spend extra time on management and travelling.<\/p>\n Paul Tjia<\/a>, owner of gpi consultancy, says that the current focus he sees in the market is cost savings. Freelancers in the Dutch market cost 50-100 Euros an hour. Offshore you can find people from 15 Euros an hour, so this gives substantial cost savings. Second topic was what work we can do offshore.<\/strong> Vikram indicates that customers move more of the \u2018thinking work\u2019 to India nowadays. Previously, the focus was on delivering manpower, coders who would produce software programming. Now the focus is also on the question behind the question, on the \u2018why\u2019 of the software. Paul says that companies move everything offshore, from bookkeeping, to data entry and games, it becomes wider.<\/p>\n Third topic was how to manage people offshore and what can go wrong.<\/strong> My statement was that you need to invest time in building personal relationships with people in order to overcome culture and communication issues. It is said that Indians cannot easily say \u2018no\u2019. I believe that if you spend time with people in India, after some time you will easily recognizes when somebody means \u2018no\u2019 or when somebody doesn\u2019t understand you.<\/p>\n Vikram says that it is a misconception that Indian people never say no. Especially people in Bangalore, who are exposed to Western people for some time, are able to say no and become more critical, adding suggestions and \u2018thinking\u2019 to the process. If you are new to working with offshore people, indeed, it\u2019s good to invest time in getting to know the people and the culture.<\/p>\n Hugo Leijtens says that people in China indeed only say \u2018yes\u2019. To bridge this, Nexocial stimulates saying \u2018no\u2019, \u2018thinking ahead\u2019, asking \u2018why\u2019 and explaining what you mean.<\/p>\n The question to Paul was \u2018what do we do wrong when offshoring?\u2019Paul says that we already do many things wrong in software development locally. On top of that, you add cultural differences, time and distance. Many people underestimate that. People think \u2018they are skilled\/schooled programmers, so everything will be ok\u2019. But you need to invest time in the relations, in bridging the differences, in cultural training. If you acknowledge the differences and risks and give attention to them, you can bridge them.<\/p>\n
\nHugo Leijtens<\/a>, owner of Nexocial, who set up his own office in China, says that his single motive was attracting talent. He considered Silicon Valley too, but there is no talent available, because everybody works for Google and Facebook. In China there is abundant talent. Vikram said the same about India. In both countries, every year, around 200.000 people enter the labor market with a technology degree.<\/p>\n
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