In areas of China and the Asia Pacific, most of software outsourcing projects are accounted at a fixed rate, and this contract mode brings a mistaken concept to firms that it will cause inconvenience but have no effect on project investment because of this project delay. In fact, any delay of project not only causes inconvenience but also affect operation and benefit of firms. If a new business can’t be put out into marker by reasons of not ready for its software or information related, and others occupy the opportunity, how it will affect the firm. Or a project is developed for simplify internal workflow and improve work efficiency, then delays of the project will prolong the operational choke point and increase operational costs. All these affect a lot on benefits of company directly or indirectly, not merely on the matter if investment will increase or reduce。

However, in Europe and America, outsourcing projects are mainly accounted by actual numbers of work days, so it will impel to overspend if project is delayed.In this case, to avoid project delay is an important target to judge management capability of project manager. Project managers have to monitor schedules and risks of outsourcing project effectively to avoid delay of project and extra development charges. We can learn this management idea to manage outsourcing projects in China to guarantee that project can be achieved before deadline;

1. Establish Our Own Project Plan As a project manager, you can not adopt project plan of outsourcing provider completely and chuckle to yourself to pass over project planning. Even if it is an outsourcing project, you have to make a full project plan by yourself, then you will know exactly about the whole workloads, evaluate the price to negotiate with outsourcing provider, ensure technicians who will be involved, judge if outsourcing provider can provide sufficient resources and if the promised time is feasible. Having made the project plan, firms should require outsourcing provider to provide a full development plan before starting the project. In order to avoid numerous paperwork, some outsourcing provider usually claim that the plan provided before signing contract is the whole project plan. This tell us that they have no system of integrity on development management and project management，and their project manager is not suitable for his job. Any employable project manager should realize that the preliminary plan for delivering the project made in period of contract negotiation can’t be all-around, and it needs modification to be a feasible plan according to actual contents of the contract, add actual workloads, assignment of resources, and time required. After getting the project plan from outsourcing provider, we need compare and check it with our own plan carefully to understand if it tallies with requirements of the project, that is workflow of the whole project, contents, estimated workloads and arrangement of resources. It is necessary to clarify timely and make it acceptable to each other if there are obvious difference. The project will be started formally after the project plan of outsourcing provider has been confirmed, and now it’s time to monitor the project.

2.Concerned On Evaluating the Schedule Outsourcing contract should ask outsourcing provider to provide schedule reports regularly. I have seen many project schedule reports, and they are different a lot in contents, however, most of them explain definitely which parts have been completed, which parts are going on, which parts will be taken up in next report period, and whether the work has been completed on time or not, even more, some use different colors such as red, yellow and green to show status of progress.Basically speaking, all these information can only allow directors to see the project roughly，but can’t make the project manager hold the schedule of the project in hand. In my opinion, the best way is that we should know how many tasks have not been finished, how long they will be complete, which parts have not start and will they start as scheduled, and is there any change on planned resources. If answers are different from original plan, we are supposed to question ourselves immediately, find out main reasons why the task haven’t been finished or why not start according to the schedule. Consequently we can discuss it with outsourcing provider, how to bring the project into normal schedule. Such finished tasks have become history to us and they have little effect on the schedule of the project. The parts haven’t been completed or haven’t start are the key of project, and they are in need of monitoring in particular We need confirm the schedule reports offered by outsourcing provider to make sure if tasks have been actually finished as planned. The best way is when each program module is finished, we need let outsourcing provider to list original codes and testing results of the program. And let technicians and user representatives check the results to confirm that work provided by outsourcing provider has been finished in fact. This procedure of confirmation doesn’t mean we do not trust outsourcing provider. We simply want to confirm if the schedules of the project have been finished as planned, and ensures the person in charge is able to report to boss about the accurate status of the schedule.

3.Closely Associated When Checking and Accepting The biggest risk of the software outsourcing project is not in development progress, but appears after the project has been finished.Many of them often turn up problems in program logic or editing range of data entry during checking and accepting period, which result in differences between testing result and real requirement, outsourcing provider cannot but modify a lot to result in project delay. Sometimes, outsourcing provider complains that it ’s not their fault. Avoiding these risks, you’d better check and accept the project at the same time of developing, but not to do it until tasks have been closed. It is not a proper idea that some firms put it as a last work to check and accept. Checking and accepting of project should be on it’s way, begins and ends at the same time of project development, and then can make sure the final procedure of checking and accepting successful. Another mistake in software development is to ask developer to create testing data for module testing and system testing. Technician have limited knowledge of business operation, and only users know ranges of these datas and what information of the data is accurate. Therefore, an experienced project manager usually asks user representatives to assist its module and system testing in project process, and establish testing data for technician testing. Testing data of every module are offered by users. To prevent us from disputing, outsourcing project is suggested to test with this method. When outsourcing provider delivers original codes list and testing report of each module, users and technicians of firm check it together, and guarantee the results consistency between testing and users’ data, and at last check and accept the system successfully, and cause no fatal delay.

4.Distributing Time in Reason It is more complicated to manage an outsourcing project than develop it internal, and more milestones are necessary to be established to monitor the schedule of the project.  More communication and negotiation are needed; firm members should cooperate with the schedule of outsourcing provider constantly and supply with data needed for testing, all these will be handled in extra time. Generally speaking, it supposes that an internal project will be completed in 500 workdays, 50~75 workdays are for project management, about 10%~15% of the entire workloads. And the same 500 workdays of outsourcing project needs another 75~110 extra days to manage this project. In other words, it takes 15%~22% of workloads for firms to manage outsourcing provider. Certainly, these data are only for reference for software development outsourcing projects, every project and outsourcing provider have difference management requirements. However, it is an unchangeable rule of project management, we can not think that outsourcing allows us have no management requirement.

About the Author

Steven ZHAO is a MBA and CTO of BPWork.com Info-Tech Co., Ltd, An offshore outsourcing IT services and software development Company in China & Australia specializing in Data entry and processing, Software development, Software testing, Database support, Website design, Software localization, Multimedia localization and BPO. http://www.bpwork.com

As the foremost “hot spot” for America’s offshoring and offshore outsourcing of technology and business services functions today, India presents an important case study of differences in business culture. In the course of years of giving seminars to both American and Indian teams working together, I have found recurring themes and incidents that point to underlying cross-cultural differences in mindset, values and approach to business interactions.

Once you get past the more obvious mutual adjustment issues of time zones, logistics, work and holiday schedules, accents, names and language (American vs. Indian English), there are five elements of American business culture that pose special challenges for Indian teams interacting with their American counterparts - whether in the ITO, BPO or call center environment.

1. Mindset about Management Hierarchy In American business culture, rank and title aren’t as important as they are in India. Hierarchical forms of behavior are frowned upon. The expectation is that subordinates will speak up, offer suggestions, push back and take initiative rather than just do what they’re told. Decisions tend to be less top-down, authority is more delegated, and managers expect team members to take responsibility and assume ownership of results.

2. Attitudes Towards Appointments and Deadlines For Americans, strict adherence to time commitments is seen as a basic principle of professionalism and courteous behavior. Because everything tends to be strictly scheduled, delays in one appointment or deadline can have a serious ripple effect on a colleague or customer’s other work commitments. The more flexible and open-ended approach to time of Indian business culture can create tensions and unfavorable impressions on American counterparts.

3. Meaning of Agreements and Commitments Americans have a preference for clear, detailed agreements and are uneasy with vague expressions of general commitment. In business interactions, commitments are taken literally and seriously. Failure to follow through on them precisely is viewed as a sign that a person isn’t trustworthy. Indian business culture tends to view agreements more flexibly as intentions and guidelines for future action.

4. Results vs. Process Orientation In Indian business culture, following the rules and implementing correct processes is highly valued, but in American business culture, it’s all about results. There is impatience with individuals who come across as more concerned with following established processes correctly than with achieving the desired goal. Americans don’t like to be told all the procedural reasons why something can’t be or hasn’t been done.

5. Directness — Especially in Addressing Disagreements The American style of communication is characteristically direct, candid and relatively unconcerned with face-saving or the avoidance of conflict. The expectation is that questions will get answered with a clear “yes” or “no,” and that disagreements will be dealt with openly and straightforwardly, in a “tell it like it is” manner. Indians and people from other cultures that tend to avoid conflict and loss of face often find it hard to say “no” or raise problematic issues effectively with their American counterparts.

Cultural awareness and the ability to adapt effectively to another culture’s way of doing things are complex skills - whether you’re a programmer in Bangalore or a project leader in Sunnyvale. Everyone tends to take their own cultural ways of doing things for granted and to assume they are self-evident to others.

In recent years, American companies offshoring or outsourcing to India have shown growing awareness of the hidden costs of cross-cultural mismatches in work-related behaviors. They have been willing to invest in general and region-specific cross-cultural training for their onshore employees and those who are asked to travel to India. They have also learned to devise process accommodations to circumvent the negative effects of certain cultural tendencies in their offshore teams.

What these companies seldom undertake to address directly is the need to seriously educate their offshore teams in the fundamentals of American business culture - the attitudes, thought patterns and behavior norms that Americans expect. They’re missing a golden opportunity to improve the productivity and experience of their onshore-offshore teams.

Dr. Karine Schomer is President of Change Management Consulting & Training, LLC, and leads the CMCT India Practice specializing in cross-cultural training and management consulting for doing business with India. For more learning resources check the CMCT Articles Archive.

About the Author

Karine Schomer of CMCT

Offshore Outsourcing is viewed as a key tool to reduce costs. The basic advantages are the reduction in project timelines and savings on account of lower labor costs. There are some new challenges associated with the outsourcing that face a company when embarking on this process. Additional costs on vendor selection, legal costs, transition costs are sure to be incurred. Therefore, in spite of the obvious savings that can be realized, not many outsourcing vendors have been able to establish their ability to provide positive ROI to their clients, especially so in complex projects.

Any business has to conduct a thorough analysis of its vision, strategy and goals before deciding to outsource any part of their activities. Some key driving factors in this decision to outsource are:

Absence of specialists or experts: In case of many companies this is the sole driver that forces them to outsource. Complex process oriented projects demand expertise that may not be present in a company. At the same time, the requirement may not be full-time. Hence a via media solution is to get the job outsourced. The Outsourcing Institute has rightly said: “Outsourcing is a clever alternative to hiring”.

Irregular demand for personnel: Large projects comprise of many smaller parts that need specialist intervention. But this need is intermittent and the company does not see value in hiring a full time (read costly) specialist. For example, a project that will get completed in a year or two hardly requires a full time person on the rolls of the company. It is wiser to outsource that part of the project to an offshore vendor and accrue gains to the company by saving the permanent cost on an employee.

High risk factor: Usually companies involved in high risk industries prefer to insure their risk by handing over the job to an offshore vendor who has advanced expertise in the subject. However, it is unreasonable to shift all the responsibility to the outsourcing partner because that takes away the “ownership” of the project from the company senior staff. Hiring experienced specialists who have the necessary hands on experience is a viable alternative in the long term.

Emphasis on perfect processes: The key strength of the vendors who take up the outsourcing projects is their ability to standardize their internal processes. The evolution of chaotic and ad hoc processes to mature, reliable software is a classic example of this perfection of management process. In many a case, this has a positive rub off on the client organization as they can absorb some of the standardized best practices from their outsourcing vendors.

Savings in management time: Time is literally money when it you consider the management’s involvement in routine, secondary work in an organization. The management can concentrate on their key focus areas that demand intelligent, path breaking ideas and give their attention to top priority processes by outsourcing the mundane, repetitive activity to outside vendors.

Achieving and maintaining objectivity: Over time, the workers of a company become inert and impervious to new ideas and thoughts. They may cling to their age old beliefs saying “this is the way things are done here”. And hence are not able to think up new solutions to get optimum results. It is a well known fact that old knowledge stops acquisition of new knowledge. Therefore, new ideas can be infused into the company by seeking the help of outside, impassionate experts who can suggest the right solutions keeping only the business needs in mind. This avoids playing the corporate politics by the incumbents within the company and is the true advantage of outsourcing.

It is important for the company to list out all reasons for the decision to outsource and also rank them in order of priority. All concerned subject matter experts within the company should be consulted, their requirements noted and a coordinated plan for outsourcing should be developed based on these discussions. If this is not done, wrong vendor might get selected or worse wrong processes may be outsourced resulting in loss of valuable time and money for the company.

While there could be any number of reasons for outsourcing, the main ones can be listed as:

1.) Achieving economies of production 2.) Developing the technological advances and manufacturing processes. 3.) Improving the customer service delivery processes 4.) Focusing on and improving core competency areas 5.) Outsourcing due to lack of trained, qualified manpower.

Editor’s Note: The next paragraph should not be taken too lightly.

One must realize that outsourcing is not the panacea to all the problems ailing a company. A company cannot wish away its problems by outsourcing them. Any internal problem has to be studied with utmost care and concern. The aim of the management should be to identify the root cause of the problems and not treat the symptoms through outsourcing. If the causes are more deeply rooted with more historic background it will be unwise to expect an outsourcing vendor to solve them. Therefore, root cause analysis has to be done thoroughly and then option of outsourcing considered keeping in mind the long term strategic objectives of the company.

About the Author

MJ Batta writes job outsourcing related topics and hosts a job outsourcing research site at Outsourcing America and a special outsourcing report at {a xhref=” http://www.researchthisstuff.com/Outsourcing_001.htm“}How Companies Outsource