Outsourcing With Confidence

Call it the low-cost labor chase. Fed up with Bangalore’s swiftly rising costs, high turnover, and overstretched infrastructure, companies are looking to send IT operations to other cities. Need some inexpensive tech support? Check out Ho Chi Minh City. Want to develop a security system? Take a look at Bucharest.

But be warned. The labor may be cheap, but the risks can be high. Companies that shift work to developing countries have to be prepared to deal with language and cultural differences, potential political instability, and possibly even the theft of valuable intellectual property. Here’s a guide for going global.


Take a trip Before you sign a contract, spend some time at the offshore outsourcing center, even if it’s on the other side of the world. Many companies send business to centers overseas without ever visiting them.Consider culture Offshore workers may speak your language, but they may not fit the company culture. Want programmers to challenge ideas and propose alternate courses of action at times? You may be better off in Moscow than Bangalore.

Look beyond the bottom line Many outsourcing deals are focused solely on cost but break down in the third year after every last penny has been squeezed out. Instead, consider what you’ll need over a three- to five-year period and choose a vendor capable of innovating or making enhancements when the time comes.

Seek maturity The Software Engineering Institute rates the maturity of business processes of some offshore IT providers. Look for providers with CMMI (capability maturity model integration) Level 5, the highest possible rating.


Forget about time If your employees will need to collaborate with workers in other countries, pick an offshore destination in a time zone that will allow some overlap of the workday.

Give it all away Not all work is appropriate to send offshore. For instance, some organizations that outsource entire help desks are starting to take back pieces that are especially complex.

Expect instant results There’s an illusion that sending IT work offshore will immediately yield high productivity. Success takes time.

Pick the wrong partner Offshore providers often cater to specific countries. In China, for example, some providers have experience serving domestic clients, while others work primarily with U.S. and European companies.

Jump the gun If you’re just beginning to send work offshore, consider a locale where providers have years of experience. Emerging destinations such as China or Vietnam offer lower costs but present bigger challenges.

Waqas Ahmed


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