Outsourcing Business Impact

InternationalOutsourcing for IT projects has impact on Business operations, besides the well known financial concerns which in theory has already been costed out.

This is a page on aspects that do not affect critical processes that maintain BusinessContinuity.

Page started by DavidLiu who would be interested in further work to build up content of this page in a collaborative manner.

Startup concerns

Has to select a suitable implementation partner. Typically a consulting group that has expertise in both countries need to be chosen. It will be difficult to establish concrete success criteria, manage timescales and deliverables.

Productivity drop due to learning curves of the offshore implementation team are often underestimated.

Proponents of Outsourcing are everywhere, one 2004 article can be found at http://www.computerworld.com/printthis/2004/0,4814,93413,00.html

Ongoing Operations

Impact of Timezone differences are often underestimated. Business application owners are ill prepared for early morning or late at night meetings to discuss project requirements or progress.

CultureShock

Cultural assumptions and idioms can cause problems between native english speakers in different countries. When trying to communicate between native english speakers and non-native english speakers, these problems are only compounded.

Besides language, big cultural gaps exist in "value systems", legal matters, organization cultural mismatches.

See article "Culture and change: the impact of outsourcing" at http://www.sharedxpertise.org/modules.php?file=article&name=News&op=modload&sid=282

ManagementOfReputationalRisk

Often even with due diligence, a firm seeking a joint venture partner for InternationalOutsourcing may not have sufficient understanding of the "true situation" in a remote country for risk assessment purposes.

A Jun05 article on China, at http://observer.guardian.co.uk/business/story/0,6903,1504423,00.html, gave some warning about aspects requiring closer inspection (e.g. law enforcement in a foreign country). There were some hints that companies in that country may not see it in their interests to "play by the rules".

Standard Consultant Problems

Whenever someone is writing software that someone else is going to get the copyright to, there is a lack of institutional investment. Witness Microsoft writing OS/2 and the choice of 80286 assembly language.

DistributedSoftwareDevelopment problems

Even between people who work in the same building, speak the same language, grew up in the same local area, and meet face to face several times a week, it is easy to have miscommunications about desires, specifications, timelines, and such. These problems can only be compounded if contact is limited to the telephone or email.