The 4 success factors for outsourcing to India
Big bold moves forge a strong partnership
Outsourcing to India ? You might want to watch certain factors to take your outsourced IT projects on the road to success.
India holding a major share in the IT outsourcing, finding an Indian IT outsource partner is very easy. But identifying the right ones with whom you can sit well and travel for a long time is tricky and challenging. Outsourcing is considered as one of the cheap moves. But if you don’t compromise on the following factors, it can result in remarkable client-offshore partnership.
Know your partner. Having a great knowledge about your partner is equal to laying a strong foundation to your venture. Getting to know about your outsource partner can help you in understanding about their values and ethics which will serve as more than just information in the long run.
You should choose a partner organization with ethical leaders. A company is as good as its leaders. Learn more about your potential partner’s top management. The value system of the top management trickles down throughout the organization. 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”
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.
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.
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.
“Bond with your offshore team in the same way you do with your in-house team”
The physical distance will seem to stray away the personal connection often. To break this awry situation you can visit at least once in a year to the offshore team and establish a personal level relationship with them.
Treat your offshore team members with equal respect you have on your in-house team. A client who treats the outsource team with equality, benefits from their increased commitment. This includes supporting the partner team during a rough patch.
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.
When forming an offshore team, framing a new outsource hub, hiring people with the right attitude is as crucial as their technical skills. A team needs members who can contribute to the project vision.
An ideal team does not come from having only talented people, but also having a shared visionary people can make your team to grow and glow. This leads to better product outcomes.
“A team with a voice is much better than a blind”
Try creating a platform for your outsource partner to be honest in sharing of thoughts. Establish a two-way communication channel between to empower true innovation in the outsourcing operation.
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