No doubt, the evaluation of outsourcing and offshoring locations brings you in touch with India. Mumbai, Chennai, or Bangalore are emerging cities offering services for any kind of business processes. Low labour costs, strong technical expertise, and good English skills are the pulling factors making India an attractive place. However, dealing with the Indian subcontinent can be a challenging task especially for people from a western culture. Here are the 3 most challenging issues when doing projects with Indian contractors:
Feedback
In India weaknesses and failures are not admitted in public; it might result in losing face. So before someone admits a failure he tries to cloud it with vague statements. Therefore the client can’t expect an early warning if a milestone is not achieved. Western cultures treat a deadline as given, so 5th of September means 5th of September and not 6th, 7th or 15th. From Indian perspective time is stretchable; they see a few days delay still as delivery in time. Together with the Indian "optimistic" style of planning this brings projects into trouble.
Specifications
Projects start with user requirements usually written down in a specification document. If the specification is written on abstract level, people don't know exactly what to do. Without demanding further information they start to work according their own interpretation. If it's written too detailed, people follow each instruction without reconsidering if things make sense or not. The first presentation of an interim deliverable (and I hope you have interim deliverables in your project) ends up with an unpleasant surprise for the client.
Contracts and agreements
In western cultures contracts are final after signed by both parties. An agreed fixed price is a fixed price. In India a fixed price is often treated as guideline, a point of reference. It is considered normal to renegotiate or to charge extra cost during the contract period of validity. The major issue is that during contract negotiation, the Indian party fully agrees to the fixed terms without mentioning the possibility of extra charges. On the other hand, the western counterpart does not even think on upcoming extra charges after signing; they take the approval of the Indian counterpart as fixed agreement. And as soon the Indian party starts the first attempt to renegotiate the price, the clash is inevitable.
Feedback, specifications, and contracts; 3 Indian challenges. In the next “Challenge India” articles I will advise how to deal with these challenges and make projects with Indian contractors a success story.
Monday, July 19, 2010
Monday, July 5, 2010
Benefits of global organizations
My blog might give you the impression that I advocate global organizations. Hmmm..., I think you are right ;) I am writing about global teams, the challenges they face, and share proposals to improve their effectiveness. “But why?” you might ask. Here are the 3 most important benefits of global organizations:
Quality improvement
Standardized processes are easier to monitor, quality issues can be identified on the spot. Team members use best practice sharing to ensure all sites have the same know-how. Once processes are harmonized and know-how is spread, Operations can be setup as 24h / “follow the sun” support without additional labour costs.
Costs reduction
The processes on all locations are harmonized; duplicate structures are identified and eliminated. This generates synergies and reduces costs. Furthermore companies gain transparency with a global chart of accounts. All departments in a global organization are posted with the same accounting rules.
Speed increase
In fast-paced environments processes change on regular basis. A harmonized process needs to be changed once, with immediate effect on the whole company. Furthermore MNC’s save time in re-use of documents, software applications, and other project deliverables.
If you think “sounds nice, but in my company it’s not possible,...”, then please remember, the benefits are due in EFFECTIVE global organizations only. If your organization is not yet that effective, I suggest to follow the blog, take some of my advices, and share your experience with me. I’m sure my blog is an interesting read for professionals and managers working in a global environment.
And a final word: changing to a global setup doesn’t pay back in 6 or 12 months. Usually it takes at least 2 years until global organizations are effective.
Quality improvement
Standardized processes are easier to monitor, quality issues can be identified on the spot. Team members use best practice sharing to ensure all sites have the same know-how. Once processes are harmonized and know-how is spread, Operations can be setup as 24h / “follow the sun” support without additional labour costs.
Costs reduction
The processes on all locations are harmonized; duplicate structures are identified and eliminated. This generates synergies and reduces costs. Furthermore companies gain transparency with a global chart of accounts. All departments in a global organization are posted with the same accounting rules.
Speed increase
In fast-paced environments processes change on regular basis. A harmonized process needs to be changed once, with immediate effect on the whole company. Furthermore MNC’s save time in re-use of documents, software applications, and other project deliverables.
If you think “sounds nice, but in my company it’s not possible,...”, then please remember, the benefits are due in EFFECTIVE global organizations only. If your organization is not yet that effective, I suggest to follow the blog, take some of my advices, and share your experience with me. I’m sure my blog is an interesting read for professionals and managers working in a global environment.
And a final word: changing to a global setup doesn’t pay back in 6 or 12 months. Usually it takes at least 2 years until global organizations are effective.
Sunday, July 4, 2010
Off topic: Germany vs. Argentina 4:0
My passion is cultural diversity, to establish relationships across cultures. However, during soccer World Cup my intercultural focus shifts from diversity to Germany only ;)
Yesterday Germany send the Argentina team back home with an outstanding 4:0, the week before England was gone with 4:1. (Including a somehow "delicate" goal disallowed by the referee. At least the German complaining about Wembley 1966 will stop now)
Yesterday Germany send the Argentina team back home with an outstanding 4:0, the week before England was gone with 4:1. (Including a somehow "delicate" goal disallowed by the referee. At least the German complaining about Wembley 1966 will stop now)
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