Why Offshore Outsourcing Projects Fail

By Author: John Parker
Total Articles: 11
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Misunderstood and Often Overlooked, Cultural Differences Can Make or Break a Project Recent examples of failed offshore outsourcing have made headlines and become hotly debated among opponents and supporters of outsourcing. Typically, there are a number of contributing factors that cumulatively result in a project being abandoned or failing to meet its intended goals and objectives. Offshore outsourcing projects are no different and can fail for many of the same reasons, but offshore outsourcing projects are vulnerable to additional risks. Santa Fe, NM (PRWEB) November 12, 2004 -- Recent examples of failed offshore outsourcing have made headlines and become hotly debated among opponents and supporters of outsourcing. "Typically, there are a number of contributing factors that cumulatively result in a project being abandoned or failing to meet its intended goals and objectives. Offshore outsourcing projects are no different and can fail for many of the same reasons, but offshore outsourcing projects are vulnerable to additional risks" states Scott Noble of Global Sourcing Insights LLC, an outsourcing consulting and advisory ...
... company. He explains that these risks can include:
Barriers to Communication - more than just language differences, special considerations must be made for methods of communication that bridge the geographical and cultural divide Complexity of Infrastructure - creating the ability for workers to access the tools they need is critical and there can be legal, regulatory, and other environmental impediments Division of Labor - avoiding simple labor rate arbitrage and truly deciding where specific types of work are most efficiently and effectively performed Cultural Factors - subtle and insidious, misunderstood or mismanaged cultural differences are often at the root of outsourcing failures
"In our experience, the most frequent unique causes of failed offshore-outsourced projects, beyond those causes that are typical to any project, are related to cultural elements that are commonly ignored or misunderstood" notes Mr. Noble. "You have to understand subtle cultural differences and how those will affect the way in which work is done - that comes with experience" states Ron Kreutzer, a partner at Global Sourcing Insights. "We have addressed some of these issues in our latest publication ‘Why Offshore Outsourcing Project Fail' which is available on our website". Mr. Noble concludes "As companies skip around the globe in search of lower costs, they will find that those cost savings can be significantly diminished if they do not adequately address endemic cultural, business environment and social factors preparation and experience are critical."
About Global Sourcing Insights LLC Two senior managers of a large offshore outsourcing service provider formed Global Sourcing Insights in. The company advises organizations in using offshore outsourcing as a part of their business strategy. They provide application feasibility assessment services to quantitatively determine if IT applications are suitable for outsourcing and would benefit from using this strategy. GSI also provides advice on outsourcing best practices to mitigate business and political risks.
GSI has in-depth expertise in offshore outsourcing and has assisted many Fortune 500 companies in analyzing the feasibility of outsourcing their IT application portfolio. Their expertise of the best practices for outsourcing as well as their in-depth knowledge of the major offshore outsourcing service providers allow for independent, honest and practical advice.
Source: www.emediawire.com/releases/2004/11/emw177741.htm
This article is powered by A-1 Technology, an offshore outsourcing company.