Outsourcing To India? Checkout 9 Ways You Can Ensure Consistent Success!
While outsourcing to Indian companies, there are some factors which needs to be checked.
According to a report from NASSCOM, almost half of the world’s top Fortune 500 companies choose to outsource software development to Indian shores.
In fact, 80% of European and US-based outsourcing firms consider India as their preferred destination. Favorable policies and a skilled English-speaking workforce help the Indian outsourcing industry grow every year.
For clients, outsourcing to India means sustaining growth while containing the costs. As a front runner in the
Indian IT outsourcing industry, we have collaborated with many clients on projects of varying complexity.
We know that there are some common success factors that significantly contribute to the success of any outsourcing operation in India.
The 9 Success Factors for Outsourcing to India
Below mentioned are 9 common success factors that lead to outsourcing success. These factors can greatly improve the results for any organization starting an outsourcing operation with an Indian partner.
The most critical aspect of a successful partnership lies in knowing one’s partner first. A company is as good as its leaders. Clients must learn more about their potential partner’s top management.
The value system of the top management trickles down throughout the organization. Therefore, it is important to interact with them and understand what they stand for. In the absence of sound values in the top management, an organization will fail to perform.
Even a great programmer in a company with poor management will perform poorly. Such a company will suffer from high manpower attrition. It will lack the motivation that is the cornerstone of a consistently well-performing team. Its
abysmal work culture will impact every person in the organization and their every project.
Clients should choose a partner organization with ethical leaders.
This knowledge will come from an open interaction with them. One should also delve deeper and know the beliefs and principles of the company.
It is a good idea to check how they provide a healthy work culture to their employees. Remember that a happy employee will keep the client happy too. However, greedy top management will have a disastrous impact on employee motivation. Partnering up with such a company will be harmful to the client’s interests.
It is crucial that there is a semblance of equality between the outsource team and the internal team.
Clients should treat their outsource team as an extension of their own. If they treat them like
outsiders, then they will deliver like one.
They will not own the product and perform below par. There will be a lack of cohesion among the team members.
On the contrary, a client who treats the outsource team with equality, benefits from their increased commitment. This includes supporting the partner team during a rough patch. All of this will lead to a long-term association with the partner team. The partner team will also strongly align to the client’s end vision.
A good rapport between the internal and external teams is very important. There have been several examples of outsourcing team members staying with a company because they are happy with the clients.
As is common with the outsourcing industry, a client is often based out of another country. When a client operates out of a country like the USA or Australia, then working with an Indian team can be a transformational experience.
Trying to understand the partner team’s culture will help them break the ice. They will learn to deal with the finer details of the outsource operation more effectively.
When a client fails to understand the cultural ethos that his partner team values, he also fails to establish a meaningful connect.
For example, if one does not understand the importance of an Indian festival like Diwali and expects team members to work during their most important festival, they end up creating a sense of disharmony in the team.
It is also crucial to note that India is a highly diverse country. The team members might work from offices spread across the country. This means that they will come from varied backgrounds, cultures, climatic conditions and languages. It can impact the way of working for each of those employees.
The client should be aware of the multi-cultural environment in India when dealing with the offshore team. Learning about their festivals and wishing them well will make them feel connected. A generous gesture of goodwill would not go unnoticed and the team will reciprocate by truly understanding client requirements as well.
The difference in culture also means that something that works in a country like Europe may not work in India. A cultural adaptation by the client is a must for moving the project along in a smooth manner.
The core objective of a business is to create money. Financial margins are an important element of a company’s operations. This applies to any outsourcing partner too.
Encountering low-margins in a project is not unheard of. This happens when there are unforeseen changes in the project. As long as these changes are not intentional in nature, any formidable outsourcing agency will be prepared to handle it.
However, this support must be extended from both sides. It is crucial for the client to be flexible in such a scenario and motivate the partner in any capacity.
With a co-operative client-partner relationship, a project will continue to thrive. One must remember that the journey from becoming good project to a great project requires patience, mutual understanding and respect. A motivated partner is an important part of this mix in the long run.
Most often, there is a physical distance between a client and his offshore team. Generally, there is a project manager acting as an interface between the team and the client.
In this case, a client should work towards creating a long-term association with the team. To do so, he needs to bond with the offshore team. He should make an effort to know each member personally. He should create a connection with the project manager and his team as they are the ones responsible for reaching project goals on time.
Maintaining a regular interaction with the project manager is essential. This will help develop a comfortable communication channel between the client and the project manager.
He will be more forthcoming with the client, allowing him to keep a tab on the offshore operations.
Clients should also not shy away from a regular joint conference call with the whole team. It brings everyone on the same page. One should take it as an opportunity to share the project vision with the team.
Regular in-person experience
Many short-term projects can be monitored remotely by use of various communication channels.
However, a long-term project requires more control on the project. In this case, it is rudimentary that the client makes a short trip to the offshore team’s location.
An in-person interaction with the team will allow for a free-flow of communication between the client and the team.
This will allow the client to connect with every person in the team. The team will also learn to put a face to the name. In-Person interaction is significantly better in impact than a Skype call.
Both parties are fully immersed in the conversation as their body languages add to what they are saying. This elevates the entire interaction.
People understand each other better when they are present in person. They connect and bond at a commonplace, time and environment.
While such meetings cannot be a regular occurrence, they work well for the productivity of long-term projects. For a team size of more than four people, it makes all the more sense to make a physical visit and bond with all the team members.
They are the people who rally behind the client’s success. Therefore, it is beneficial to create a platform for regular interaction with them.
There is a common misconception that India is a destination for cheap technical resources. While it may be a true statement once in a while, it does not represent the entire scenario. India or abroad, quality manpower comes at a price. There are two reasons behind this. Firstly, India has a high annual inflation rate of approximately 8-10%.
Secondly, it has a culture of annual appraisals leading to a year-on-year increase in operating expenses. A good resource can get a 50-60% increase in salary over a period of 2-3 years. In general, an annual salary increase of 20-25% for high performers is an accepted norm.
This may be followed by a 15-20% salary increase for average performers and a 10% salary increase for low performers.
This means that there is an upward cost of maintaining high-quality developers. The compensation is directly proportional to the experience of the developer.
This is contrary to the culture prevalent in USA or Australia where such a variance is not observed. In India, an outsourcing partner will have to pay well in order to hire an experienced developer for a project. A company that offers cheaper
services is bound to cut corners on quality.
Low quality will lead to project delays and a poor product. Whereas, a good outsourcing partner will charge more. He will leverage the skills of an experienced developer and provide high quality.
Low quality of work also has an associated cost. It leads to wastage of the client’s time. Low-quality resources force a client to spend a lot more time on the project. This results in project delays.
Whereas skilled resources reach project goals on time with minimal client intervention. The opportunity cost of investing the client’s time is higher than hiring a costly resource. Hence, a client must consider the opportunity cost of hiring an Indian outsourcing firm while making a decision.
When forming an offshore team, hiring candidates with the right attitude is as crucial as their technical skills. A team needs members who can contribute to the project vision.
Presence of yes-men may damage a project’s outcome and must be avoided. An ideal team member does not shy
away from questioning ideas when in doubt. He helps in pointing out the irregularities.
This leads to better product outcomes. Therefore, a team member with a voice is much better than a blind
follower. A client should encourage their partner team to contribute their ideas.
He can create a platform for honest sharing of thoughts. A two-way communication channel between client and
partner will empower true innovation in the outsourcing operation.
Patience and Mutual Trust
India is brimming with talent. Several companies are operating in a spirited ecosystem. It is natural for clients to have varying degrees of experiences. At times, one may come across stories of outsourcing failure. At other times, there may be stories of stomping success. Neither of them is the absolute truth.
As a client begins his outsourcing journey to India, he should keep in mind that every experience is different and a cumulative effect of several dynamic factors. He should not base his views on someone else’s experience.
He must respect the differences in everyone’s perception and form his own based on his experience. It is important to be patient initially in order to set things in motion.
Allowing the team some time to tune in to the process according to client specifications will help in starting a robust operation.
Sometimes, challenges in a project are real and lead to demotivation. A client’s hunch about something going amiss might be true as well. In such a scenario, one should appraise the situation and discuss it honestly with the project managers. Create an environment where one can reach a resolution.
Keep the communication alive and focus on how to move forward successfully. It is considerably better than demanding justification from the team for any hiccups in the past. Clarity of perception and some initial patience helps a client in achieving the desired results from an outsourcing activity.
Putting all the above-mentioned factors into action will take a concerted effort from both the client and the outsourcing partner. Both stakeholders need to establish a discipline that can oil the project machinery for months or even years to come.
These common success factors when leveraged can ensure a fruitful outsourcing operation that will yield desired dividends for the client.
About The Author
Amit Dua is the Co-Founder of Signity Solutions – a technology platform which delivers solutions/services in the space of digital enablement, spanning across mobile apps, web & social media presence; and ValueAppz, an on-demand custom-mobile apps development company.