* Language barriers and political challenges to offshore outsourcing
Lately I’ve been contacted by a variety of people with different interests in offshoring, all of whom want to know why folks aren’t considering other locations in the world besides India for their outsourcing needs. One gentleman wrote to “echo the sentiment on the quality of deliverables from India.” (He didn’t think the quality was very good.) Another noted that Vietnam is a great offshoring choice. I read an article that talked about Romania as a solid choice, while another e-mail correspondent mentioned Russia. Someone else said they heard that South Africa was hot.
So what are the differentiators? Why would you pick one geographic location over another? The consensus seems to lie in not one, but four common themes: 1) An economic climate that fosters outsourcing; 2) A stable political climate; 2) The general level of talent and capability in a given country, and 3) Language and cultural barriers.
Companies investigating offshoring should take a more than casual look at the trade situation with candidate countries. If, for example, there’s a tremendous trade-imbalance – i.e. if the balance of revenue and complementary goods and services flowing in either direction is lopsided – then you should consider the country’s politics.
Currency mismatches, for example, may artificially inflate apparent trade balances. According to some sources, the Chinese Yuan is being artificially balanced with the dollar (8.2 to 1 respectively). Some economists think this translates into an increasingly wide trade imbalance in favor of China, producing an overall negative impact on the U.S. economy and on the bottom lines of corporations paying for U.S. services.
One of the big enterprise IT buzzwords these days is “Capability Maturity Model” (CMM). I’ve written a piece on this that you’ll see in a future column. The basic idea is that we all have some method by which we do things. One person might exemplify the “loose bundle” approach (things strewn about, no sense of organization), which would correspond to CMM Level 0. Another might be organized enough to consistently write things down and file them in an easy to remember manner (CMM 3). Still others are like a machine in their consistency (CMM 5 – the top rung of CMM). In the IT enterprise, managers are striving to bring their shops to some sort of CMM consistency.
Countries might also be characterized as having different CMM levels. I have seen this metaphor used to illustrate one of the sticking points with India. Some knowledgeable people interested in outsourcing topics – researchers and outsourcing company owners among them – think that Russia and China started out with a higher understanding of the sciences. This translates into a larger base of engineers and scientists capable of producing better and more sophisticated systems than their counterparts in India. In other words, observers believe that the level of preparedness – the CMM if you will – for taking on new high-impact outsourcing opportunities, such as complex programming or systems integration work, is higher in Russia and China than in India.
Some observers would characterize India as CMM 1 or 2, while Russia and China are CMM 3. Note that this doesn’t characterize a country’s efforts toward promoting an outsourcing economy for itself, only its abilities in actually delivering that capability. And, it’s probably not a fair portrayal across the board as there are certainly a lot of Indian companies made up of quite capable and thorough professionals. But this seems to characterize the type of communication I’ve been receiving with regard to India – specifically that Indian companies don’t have a high-quality output in their deliverables and that they don’t seem prepared to take on intensely complex projects, such as high-level systems integration jobs.
Language and culture are, of course, among the most significant factors. I mentioned to a CIO the other day that a particular company had recently outsourced its customer support to India. “Great,” she said, “so now I can talk to a customer support agent that I can’t understand.”
Perhaps like me, you’ve been faced with help screens whose content was obviously written by someone whose first language wasn’t English. I remember one that said: “Please to exit now” and displayed the OK button. It’s funny in a situation like that, but what if one of your senior developers in the U.S. is trying to debug code and the comments have this same backwardness to them? It could result in an expensive debug cycle. (Of course, if you’re using XP or Scrum, you debug at development time, so you wouldn’t have to worry about that, right?)
If you think about it, offshoring is always about language – whether computer or human. If the outsourcing provider doesn’t have a keen grasp of your language, you may run into code problems, customer care issues and even business communication problems. I would say this is true especially if you’re considering outsourcing customer care.
If you have any comments about these or any other issues that should be considered when making outsourcing decisions, I would be interested in your thoughts. I’ll keep track of your responses and share them in future columns.
