Biznalise your thoughts 2010-06-21T06:21:18-05:00 Binu http://www.extraslice.com/index.php binur@hotmail.com tag:extraslice,2010:Extraslice Pivot Copyright (c) 2010, Authors of Extraslice 2010-06-21T06:21:00-05:00 2009-08-14T00:00:00-05:00 tag:extraslice,2010:Extraslice.4

Why do 'outsourcing' get negative results, why companies still continue to do outsourcing? strangely in some cases the failed project was executed in the overseas office of the same company! In theory every relationship is based on expectation and it is not very different for the business relationship established between a service provider and the customer. The success of your project is based on how accurate these expectations are established,...

Why do 'outsourcing' get negative results, why companies still continue to do outsourcing? strangely in some cases the failed project was executed in the overseas office of the same company! In theory every relationship is based on expectation and it is not very different for the business relationship established between a service provider and the customer. The success of your project is based on how accurate these expectations are established,...IT consulting and outsourcing is one of my favorite subjects. I talk to most of my friends in Software and other businesses about their experiences in outsourcing and moving projects completely or in part to different geographical locations. About 98% of time people get emotional and talk about their negative experiences. Why do they get negative results, why they still continue to do outsourcing? I have seen failed projects, strangely in some cases the failed project was executed in the overseas office of the same company!

In theory every relationship is based on expectation and it is not very different for the business relationship established between a service provider and the customer. In this context between a project owner (company or department that outsources its project) and project executioner (a IT consulting firm). The success of your project is based on how accurate these expectations are established, how they are monitored, and how well the monitoring mechanism ties back to your original goals. There are certain forces of nature that operate against establishing and continuing such a relationship.
1. Sales team: As a project owner the first interaction you do with a potential project executioner is with their sales team. As part of differentiating them from rest of the competition these sales people have incentives to keep your expectation very high about their project execution team. With high expectation you go into project, after a while the reality check happens and you get a free fall from 20Th story of your office building. On the other side the execution team gets fed up with you and think you are very unrealistic on your demands. Whatever they do to help you is backfiring and you are classified internally as a 'problem customer'. Team members are unlikely to do any extra effort to make things better for you and you would see consultants leaving your project at very high rate. So in the initial phase of identifying suitable partner, gather all the data available and match it with your constraints and project goal to set your expectation. Make sure the team that is going to execute your project (not the sales people) understands it the same way you understands it.
2. Internal employees: There are certain employees who view outsourcing as a threat to their employment and object based on fear and prejudices. Only a very few employees change their attitude even after the project sees some progress. You can try to buy-in your employees by sharing data and constantly communicating with them, however avoid giving key responsibilities to these employees in overseeing the remote project. If you do have to involve them get your communication channels clear so that you get un-amplified and non-filtered data from the project execution team. There are another type of employees who try to make use of the situation for their personal growth at the expense of your team goals. This is when they report issues in the project and people many folds magnified than they actually are. Their goal is to make sure management understands how bad the execution team is doing, but how skilled, effective and committed they are in managing all issues and making the progress. Align structure, process and people in line with the changed environment. Assign the new roles to committed people who enjoy doing them and have stake in the team goal.
3. Time differences: This is one of the major factors. When you have a project outsourced to a place where the time zone is different, some stake holders in your company are going to spend time off hours on the project. The management has to understand the sacrifice they are making in doing so, and the participant has to schedule his/her time wisely. You spend long hours of work at office and participate in brain draining discussion with project execution team in the odd . This is dump and not sustainable. You are killing yourself and putting project into greater risks. When a project is outsourced, that doesn't mean project management and your team's involvement is no more there. It means you have different role and there may be slight shift in the daily schedule to perform those tasks. Count that in to your work life, not family life. It is difficult to practice, but not impossible.
4. Cultural differences: Even though people talk lengthy about cultural differences in a dynamic environment, I think people seldom understand the true impact of multi-culture working environment especially when part of the team is not physically in the same office. The impact is multi-dimensional- schedule & holidays, body languages & gestures, language and above all prejudices. You have to give respect to gain respect. When you mock at the other culture remember somebody at the other end is doing the same. Above all when you talk remember that the listener is as smart as you or better than you. Communicate honestly in plane and simple terms. Align your office culture and that of remote team.
Success or failure of a project does not entirely depend on these four forces, but they are extremely important in any projects. I can talk non-stop about other reasons that affects the end result of a remote executed project, however I think they are less important. I would be more than happy to hear from you on your experiences with a remote team. Remember, memory of bad experiences lasts longer than that of good experiences. As long as the executives see business reasons in conducting projects in other regions, remote execution is going to happen in whatever name you may call that process. In the long run, non-availability of domain experts could be another reason to move projects out of your office. ]]> binur 2010-06-21T06:11:00-05:00 2009-02-06T06:07:00-05:00 tag:extraslice,2010:Extraslice.3

“Outsourcing” to India or China is a very lucrative term for finance departments, executives, venture capitalists and Wallstreet especially in the context of tech companies. But there are myriad of problems to deal with in making an outsourced project a success, and many of you who have worked at least with one such project can give a long list of such problems. Companies are now trying to find a successful formula to make such projects a success and those companies which succeeded in such projects are trying hard to repeat their success.

“Outsourcing” to India or China is a very lucrative term for finance departments, executives, venture capitalists and Wallstreet especially in the context of tech companies. But there are myriad of problems to deal with in making an outsourced project a success, and many of you who have worked at least with one such project can give a long list of such problems. Companies are now trying to find a successful formula to make such projects a success and those companies which succeeded in such projects are trying hard to repeat their success.How good is your consultant?
“Outsourcing” to India or China is a very lucrative term for finance departments, executives, venture capitalists and Wallstreet especially in the context of tech companies. But there are myriad of problems to deal with in making an outsourced project a success, and many of you who have worked at least with one such project can give a long list of such problems. Companies are now trying to find a successful formula to make such projects a success and those companies which succeeded in such projects are trying hard to repeat their success. I have seen and worked with many outsourced projects -some of them succeeded while most of them were abandoned in the middle or failed miserably. I can also present a huge list of issues and recommended solutions while considering outsourcing. But recently I started thinking about the core reasons behind many of these issues. Here I am trying to analyze one of such issues.
Number of years of experience in the industry is one of the widely accepted measures of maturity, skills and competivenes of a professional. It is like number of hours pilots put on cockpits of aircrafts. One of issues with outsourced consultants is the mismatch in the stated experience of consultants you get to work and the actual level of experience -compared to your in-house experts- you realize while working with them. Based on experience some project managers apply discounts on those experience level even up to 50% before the start of the project. This prompted me to think why such differences in experience levels exist in the experts provided by my outsourced company. When I am offered with 4 consultants with 5 years of experience; in the US standards it is reasonable to assume that I got 4 consultants with 2 to 3 years of experience. If you don’t do such assumptions you will be out of the game even before the project has started. The question is why such differences exist?
One of the easy reasons I can come with is the greedy management of the service company who tries to oversell their consultants or even the consultants themselves trying to oversell them for short term gains and they are unaware of the long term impacts of such acts. This may be common among lower tier service providers. You can see this tendency in some of smaller US based outsourcing companies too. But is this the only reason for such differences?
Another theory I have come up with is the separation between university and industry in those countries. I took my bachelors degree from a University in India. The gap between school and industry was very wide – or some time they are even on the polar opposites- in India at that time. There are too many reasons for that, first the surplus of manpower and higher unemployment rate allowed companies to be very choosy in their talent hunt and they did not have to approach schools to recruit most talented graduate, but talented graduates approached them. They did not have much stake in the education system. At most some cash rich companies would provide some financial assistants to top tier schools. On the other side, most of the teaching staffs were incompetent because once they are employed by the school, job is secure for rest of their life and there weren’t any competition for the teaching post from outside the country. For the convenience of teaching and program management staffs even the curriculum was structured around theory, but not applications. The curriculum is hardly changed, to avoid the administrative cost. As a result once you are out of the school, all you have is skill to learn but not to apply. So as a fresher your first years are spent on getting used to the industry, process and applications. A computer science graduate from an average US school is at least one year ahead of a graduate from an average Indian school. The good news is this is changing now. With all the companies compete for top talents in India; they are into campuses of even less reputed schools and pumping money into schools to prepare the talent pools they need. Not long ago one of the high ranking executives of a top rated service company in India called for total makeover to the Indian educational system. On the other side heavy lucrative deals attract professionals in the industry and teaching professionals from North America and UK into campuses of India for teaching and coaching. I know couple of professors recently worked in India for some of the graduate programs there. I am very excited to see these changes and these changes are not only good for India but also for the whole global economy. It may take a few more years to see the results of such changes. Until then I guess I will have to more closely scrutinize the skills and experience of consultants I am getting. ]]> binur