Offshore

For some decades, outsourcing services from India has been seen as a silver bullet solving every matter related to costs. The salary level of the experts is less than a fifth of the European one, and this is something the financials people love to hear about. The problem is that the figures are not very comparable for many reasons, and this is not necessarily understood by the bean counters.

The viewpoints presented below focus on continuous services. Experiences with application development are somewhat different.

In the wake of the British Empire, India has a well-functioning education system, and its universities produce top performers. However, the ratio between top people and average ones is probably the same as in any western country. So, we cannot assume we shall meet the top ones only. Many of them have already moved to America.

The negative aspects observed in offshore operations are primarily related to cultural issues, language skills, hierarchies and work productivity. The difference between the Nordic countries and India is perhaps greater than between most European countries and India, because of the Nordic working style is based on trust, self-direction and a lack of hierarchy.

Perhaps the most spectacular failures in offshore outsourcing involve delivering Incident Management in India. Successful Incident Management requires the ability to think independently, to step out-of-the-box, to work in a style like Sherlock Holmes, and the ability to act in situations for which ready-made operating instructions are not available. None of these are typical in the Indian working culture. That is why the end-users' feedback has often been very negative, even if the financial figures might fascinate the CFO.

If you want to take the Incident Management and the Service Request management to offshore, you should carefully go through the points, which prevent some ticket types from being exported offshore. If the remaining set of tickets is very small, the business case might not be solid.

On the other hand, the round-the-clock monitoring generally works quite well. However, it requires fairly unambiguous operating instructions in case of incident. This might be a showstopper: Since it is not possible to do this for all cases, handling and closing the case often requires domestic actions. This easily creates the need for a domestic shadow team, which might make the business case questionable.

There are other topics to consider, too:

• The fear of losing face is common to many Asian cultures and making a mistake leads to losing face. In the worst case, this leads to hiding issues.
• Making contracts including sanctions or binding quality targets is difficult for the reasons mentioned above.
• The working culture is very inflexible. The processes are followed strictly, even if there were good reasons to deviate. The service is produced exactly as described in the service contract, and additional services may not be available even for money.
• The documentation must be fully complete, because actions are taken based on the written documentation only.
• The hierarchies are deep and the salary level at the management level is quite high, thus impacting the business case.
• It is best for a western manager or customer to visit the offshore site on a regular basis, preferably several times a year, to create a sense of control.
• Multidisciplinary competence is quite rare: One person has one job, even if it does not employ full-time.
• Employer loyalty is at a minimum. In India, you tend to get a pretty good salary increase when you change jobs, and this leads to a very high employee turnover rate. This leads to the issue that the induction of new employees is practically a continuous process needing resources.

It is also good to pay some attention to the fact that the legislation is not as predictable as in the European countries. Big western companies have often gotten into trouble with the authorities. For example, the Indian taxman may want to tax the corporates by the global revenue instead of the revenue from the operations in India. The legal processes take a long time.