Research Survey : CHALLENGES WHEN OUTSOURCING TO INDIA

Outsourcing is a practice of transferring work to outside suppliers rather than completing it on-site. Outsourcing is an effective cost-saving strategy because at times it is more beneficial to get work done from outside than to do it in-house. The services of outsourcing partners around the world will expand rapidly in the near future. Service providers plan to expand the scale of their existing offerings focussing on meeting client expectations through improved strategies.

Large organizations continue to outsource their IT operations. Hiring technical expertise to manage your IT risk at low budgets, thus freeing up internal resources for more important and strategic work is a huge benefit of outsourcing. Whether outsourcing for short term or long term strategic objectives, businesses need to realise that this is a continuous process that requires constant evaluation in an ever evolving market. Despite the advantages mentioned, outsourcing IT functions is not everyone’s cup of tea. Outsourcing does have a number of drawbacks. This includes access by the service provider to the company’s confidential information posing security risks.

In a survey conducted by GoodFirms, the focus was to identify the challenges whilst outsourcing work to India. With a huge participation from companies across the globe, we present the key arguments that compel organizations to re-think their decisions and how these concerns are not a blocking stone for many and can be easily overcome.

DRIVERS OF OUTSOURCING

Regardless of the system, cost continues to be a key driver for outsourcing solutions. Other points to ponder are:

  1. 74% of the respondents indicated “Low Price” as one of their top reasons. Long term savings in hiring staff and infrastructure top their lists when they think of outsourcing.
  2. Over 60% cited “Achieving Staffing Flexibility” as their priority.
  3. 45% highlighted better access to a wide variety of portfolio and people’s skills from the vendor as their reason for outsourcing while getting quality work from the vendor was a reason for outsourcing for a handful of responders.
  4. As high as 16% mentioned all the above as their need for outsourcing.
What do companies outsource?

CHALLENGES WITH OUTSOURING TO INDIA

To cater to the growing demand of consumerism and the rising market, more and more companies are outsourcing to India. This research study looks to explore the on-going and substantial issues associated with outsource development services in India today. But with changing times, it is not difficult to control these pain points.

Challenges faced while outsourcing

1. Finding the Right Outsourcing Partner

Though listed as one of the least area of concern by the respondents, any lapse in selecting the right offshore partner can increase concerns rather than easing the burden. It is extremely critical to clearly define what you want to achieve out of the outsourced relationship. Keeping a check on the vendor’s experience of delivering services similar to the one you plan to outsource should not be neglected. Beyond solid references, the provider should be able give a clear understanding of the products and implementation processes that are followed within their organization to ensure success.

Visiting outsourcing partner's workplace to find out if it uses best infrastructure and high-end technology is also imperative. Understanding their processes, methodologies and team amongst others are few of the key analytical factors that define the success of the outsource relation. With nearly all the major cities having large number of outsourcing partners, India offers whole lot of opportunities and options to choose the one that best fits your needs.

2. Attitude Towards Work

Surveyors mentioned that dealing with the low morale and unprofessional attitude with the peers at the outsourcing location is sometimes a concern. Negative attitudes and behaviours are barriers because they harm working relationships and hamper work productivity.

On a brighter note, work done in India is fast, good, and often very creative. The project managers at companies in India generally are clear in their communication and have superb problem solving skills. But, management concepts are something Indians need to grasp quickly to abandon negative energies at the work place.

3. Understanding the Scope of Work

Outsourcing creates uncertainty for the client organization to which the services are being offered by the third party in terms of proper understanding of the process. Devising a proper outsourcing plan before hiring an offshore provider is critical to the success of the outsourcing project. The parent organization has to allocate and temporarily engage in-house staff for knowledge transfer to the service provider during the implementation.

Defining your objectives and targets, detailed documentation and explanation of the scope of each task, and techniques to deal with complicated requirements are al imperative for the overall success of the outsourced requirement. Indians being hard working offer great end product, provided there is clarity of the job. Also, proper mitigation needs to be made at both ends and process related quality benchmarks be created to ensure that the right people have been trained to get the job done by the experienced in-house team in a rightly manner along with proper understanding of the assignment.

4. Quality of Work

Very few participants said that they had quality concerns with the work they outsource to India. Presence of dedicated onshore quality teams identifies key parameters where high quality is expected and monitor them at all levels of work. Apart from customer specified quality parameters, other quality norms such as accuracy, turnaround time and output are also taken into account.

The process efficiency has improved over the years. The more complex the task, the more chances of error but with proper communication this gap has reduced considerably. Indian outsourcing vendors have implemented varied levels of ISO and follow Six Sigma standards and CMM certifications. Though some companies who participated in the study were somewhat displeased with their outsourcing provider, a huge chunk brings works back again and again.

5. Product Design

For a handful of respondents unfortunately, design outsourcing often fails to generate desired results. Indians are passionate and enthusiastic when it comes to doing things differently especially in terms of product designing and engineering. This has been highlighted as one of the advantage by many responders to developing more efficient methods and processes.

Satisfaction level is high amongst companies who were clearer about their work objectives. On the contrary, lack of proper collaboration and then expecting a good quality solution leads to pain. While the understanding may be better when it comes to designing solutions at home, at times, there is little exposure to end user’s requirements for products meant for use in the outside world.

6. Meeting Deadlines

Time management is useful for any organization to complete a task or work project in a thorough way. Preparing to-do lists, prioritizing and planning – all are a part of using the time diligently. One of the advantages of successful time management is avoiding the circumstance of rushing to get a task finished or a work project completed.

Strict adherence to time commitments is seen as a basic principle of professionalism and courteous behaviour. Very few consider getting the work done on strict timelines as a hurdle when dealing with outsourcing firms in India. Heavy workloads are managed on time by project managers meeting the deadline for submission of completed work.

7. Language

The most common problem faced by companies while decide to outsource work to offshore locations is the language. It is often a matter of concern for western countries to deal with the English speaking staff based in non-English speaking locations. But India having one of the largest English speaking populations in the world, ensures good communication between the parties when the work is outsourced to India.

Proficiency over English is an important factor that works in favour of India. Only a small percentage of the survey responders focussed on “language etiquettes” as an area of concern when outsourcing. Though English is not the first language for people in the Indian subcontinent, hiring employees who speak fluently and understand the nuances of the language is not a challenge.

8. Communication

Good Communication signifies outsourcing success of any organization. Issues are part and parcel of any outsourcing association, which is why communication between the two companies is crucial to achieve success. Communication is a key factor in delivering results in an outsourcing engagement. Clarity of objectives and correct placement of interests is clearly done by sharing information in a proper and effective manner. It has also been observed; in cases where the sole purpose of outsourcing is cost cutting, communication takes a backseat.

Failure to develop an effective communication program can put the complete assignment in jeopardy. Establishing clear communication channels, standardizing formats of content and regular interactions pre-defined timings are some of the key elements for overcoming barriers for communication. Being proactive and encouraging interactive conversations will further encourage the recipient to absorb the communications. India, being home to some of the best talented manpower with great communication skills makes your outsourcing assignment a hit.

9. Cultural Difference

Cited as one of the top issues, difference in the working style of the companies in India as compared to their counterparts in the west plays a major role in reducing cross-border efficiencies. This is something that shouldn’t be avoided. Difficulties can ascend in terms of differing corporate culture and regional culture. India is a hierarchical society, so is the mind-set of the businesses. In terms of corporate culture, the companies in west have a flatter structure; they want to introduce this seamless approach into their Indian operations as well. Both the parties have different standards in terms of working style, decision making and organizational structure. Before starting your outsourced operation you really need to think long and hard about corporate structure.

For clients using global delivery models, educating their team on multicultural awareness clears the picture of the service provider staff’s norms and customs. Service providers are often willing to help for this type of awareness education, share with their clients how they train their employees about cultural awareness.

10. Time Zone Difference

Outsourcing to India is no walk in the park. Nearly 31% of the participants consider time zone difference as a big challenge while outsourcing work to India. With about a half day’s difference with the North American geographies, it is very difficult to find moments to speak. Not only it reduces the chances for regular communication, the client ends up paying more to the outsourcing company personnel working different shift patterns to mirror the client’s working hours. Project delays occur when the client has to complete certain tasks on a particular day or time before the vendor can deliver them due to difference in work schedules.

A number of outsourcing strategies need to be devised to limit the impact of time zone difference. Though these strategies do not come at a low cost but collocating some employees onto the client’s site, and ensure they are responsible for resolving problems with the offshore development team could help resolve the problem to some extent. Communicating beforehand that the vendor should synchronise some working hours with the client’s to deal with the time difference may also resolve this problem to some extent.

Conclusion

Now that we have walked you through the basic glitches of IT outsourcing, it becomes crucial for a business to weigh all parameters thoroughly before deciding to outsource. Firms dealing with outsourcing works in India have their own unique strength. The situation has improved considerably over the past years but Indian outsourcing firms look at their businesses differently, behave differently, and do different things. The pressures of gigantic volumes of work, tight deadlines, cultural and language barriers, along with the need to keep costs down, outsourcing can get messy. Recognising issues in advance and with right planning, all concerns and risks can be effectively managed and diminished, thus giving a flexible and strategic outsourcing model. Through cognizance, thoughtfulness, and single-mindedness, effective prepare strategies and training programs should be carved out to make the transition smooth sailing. To sustain positive transition, both parties should be unswerving and consistent to make a big impact.

GoodFirms
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