Outsourcing, What Not To Do Part 2

I hope that many of you all are able to have some time to relax during this holiday season.  Whether you celebrate them or not, I wish you all Merry Christmas and a happy New Year!

I mentioned in my previous blog post that I would continue my outsourcing "don't" list.  Here is my latest installment:

The "don't" list (part 2):

• Don't assume everyone feels the same way about things as you do.  A good example might be related to the holidays I mentioned in my introductory paragraph.  If you hire people outside the United States, are they likely to care about the US Thanksgiving holiday?  It's not very likely.  You need to at least understand that the people you hire are likely to have views and opinions that vary dramatically from the norms you may be used to in your own peer group.  Other people deserve to have their views respected even when you don't necessarily agree with them.  If you aren't able to do this, you might have difficulty working with people who didn't grow up in the same town you did, much less people from other countries.

• Don't be ignorant of cultural differences.  If you are hiring contractors in another country, you must learn at least some things about their culture.  This is really just saying the same thing as my previous item but in a slightly different way.  I can't stress how important it is to give people respect even when their views might differ from yours.  People care very much for their social norms and do not appreciate it if you trample all over views that are important to them.  My suggestion isn't to avoid discussion, but to ask questions of your team to find out what matters to them, acknowledge differences when they exist, but respect people's right to hold their own opinions.  You probably expect them to respect your views, you should provide them with the same courtesy.

• Don't think that the same hiring methods that work once will work every time.  Things change over time, it's very easy remember what worked the last time you brought up a new development team, but that doesn't mean everything will be the same the next time.  Have you investigated the market to see if there have been any changes in the common expectations today that are different from the last time?  Maybe in the last few years people have come to expect certain perks which were not expected last time.  Possibly the pay structures have changed and people now commonly get more pay (or less!).  Even within the same country, the regional cultural differences can vary quite dramatically to, you have to ensure you keep abreast of the differences and not apply any stereotypes.

• Don't expect the market to stay the same.  Even if the particular market where you work is stagnant or regresses during a period doesn't mean the markets where you hire are doing so.  You have to maintain an awareness of those changes somehow.  Sometimes that just means staying in close contact with a local human resources (HR) department or to buy independent research for those markets to track changes.  It could also mean having to conduct periodic research directly to see what the market is doing (salary surveys, etc.).  Often times your company HR has information available about such things, but you do have to know to ask for it.  Sometimes they won't gather that data unless you asked to begin with.  Don't depend on the people you are hiring to give you this kind of information, they have an incentive to ensure you spend more money.

• Don't limit yourself to where everyone else is going.  If you read news stories every other week about how company A is outsourcing to country B and you see a lot of those kinds of stories, you are probably already too late to get the biggest benefits.  Once everyone starts going somewhere the prices start to skyrocket.  Instead of being late to the game, try to find places that have little market penetration.  The sooner you are in a new market, the most time you'll have to get the most benefit.  On the other hand, it can be risky to be the first to a market, you might be the one to discover the problems with it and it might cost you.  I feel it's best to use a mixed approach where you first establish a clear list of what you are looking for in target countries/markets such as "numerous software developer resources available", "class A infrastructure", "political stability", "cheap labor cost", and "good exchange rates".  Once you have this list, prioritize each of the items and then start doing research.  If your main priority is to have lots of qualified people in the labor pool then you could start narrowing down the list of markets just by looking at that qualification first, then work your way through each top priority to make the list smaller and smaller.  Remember that emerging markets often don't have this data readily available and you might have to invest more upfront costs getting the information you need and might even need to go visit some places to meet with potential partners.

There are many things to keep in mind when developing your outsourcing strategy.  There is no "one size fits all" solution out there.  You really do need to look inward to your own needs to establish what you will expect our of any outsourced contract resources you hire and be sure that your company is ready for it.

Managing multinational teams isn't quite the same as managing local teams.  You have to be sensitive to other peoples desires and needs in ways you might not be used to, you also may have to explain what you want and need in more detailed (or at least different) ways than you might be used to to account for cultural differences.

Thank you for reading!  Please post any comments you may have.  Check back here again as I'll continue the discussion soon in my next blog.