Ramesh Dorairaj, Vice President- Head Quality, MindTree Ltd
As the world economy begins to emerge from a long spell of downturn and is hopeful of a ‘V’ recovery instead of a ‘W’, CIOs are once again opening up to considering offshoring as a key strategic option.
While some political opposition was inevitable, offshoring is showing an increasing trend – with vendor revaluation and renegotiation; new vendor empanelment being the order of the day with the more mature offshore users. Organizations that have never offshored are also finally taking the plunge. A number of advisories and analysts have mapped the offshoring landscape and provide help in setting up offshoring programs.
Be it those who are offshoring for the first time or the ones who have experienced offshoring, organizations have to institutionalize certain best practices to ensure success of their offshoring program. This article aims at touching upon some of these key practices for a successful offshoring program.
Extensive internal communication to people who will be impacted by the decision to offshore, and to the whole organization in general, is essential to prevent rumors running wild. While this is repeatedly emphasized by every expert in the field, organizations still reduce communication to a minimum – citing legal and social issues. Discussing the communication program with legal and HR folks can ensure that appropriately worded communication can be shared, minimizing the impact of speculative rumors.
While offshore salaries are indeed at a significant discount to local levels, the differential cannot be directly translated to savings without considering administrative costs and other overheads. Setting realistic expectation on cost savings is essential to avoid disappointments over unrealized savings. Focusing only on cost savings can blind side decisions - such as risk provisioning and budgeting learning needs, to name just two. Revising expectations can lead to better decisions and greater value in the long run.
Training Managers and Team Leads
Quite a number of managers get exposed to offshoring only when they are asked to manage an offshore project. Trial and error learning has its place, but it can lead to failure of the program if managers do not know how to manage teams sitting thousands of miles away. There needs to be specific training programs targeted at project/program managers as well as programmers and analysts. Getting them ready to manage remote teams, and appreciate cultural nuances is necessary to ensure greater success.
Commonality of work culture and ethics
Select vendors who can articulate their values clearly and also find common ground with your work culture and ethics. While costs are important, cultural match is something that happens only with a few vendors. Underplaying its importance will impact your entire program – soft factors can be extremely hard to figure out and replicate.
Start small, establish and then, accelerate
Even if there is a big portfolio to be offshored, it will be better to start small and establish working models that will help you when you begin scaling the offshoring vendor portfolio. Taking key decisions while the portfolio is small helps both sides set expectations and predict the routine when the program picks up scale.
Share Success Stories
Go the extra mile to showcase your achievements and how the offshore team had a part in it. Share success stories and identify the contributors and celebrate them. Show to the offshore team that they are building a temple and not laying bricks!
Establish a joint management council
Have the key operational stakeholders form the joint management council. Have them meet regularly and not infrequently.
Make them jointly responsible for the success of the program. Establish processes for escalation and define templates for communication.
Having a great offshoring program is a result of multiple factors – people, contract terms, relationships established and commitment to success being the more important ones. However, a consistent approach to the practices described in this article can help ensure execution excellence.
If you’d like to learn more about MindTree Ltd, please check out www.mindtree.com