Sourcing offshore: Cultural hurdles abound

Update below: Do IT need managers need a crash course in India and China culture? My hunch is that they will as companies increasingly source to India and China.

And the consensus appears to be that culture is a major hang-up. With that in mind here are some items to add to your reading list:

First up is 10 things you should know about working with an offshore team from TechRepublic. To me the culture issue is the biggest (and the problem is every culture will be different). Consider a company that offshores to India, China and Hungary. That's three distinct cultures to learn.

An excerpt:

#3: Cultural communication differences can create confusion

This probably is not true of everyone in India, but there does seem to be a tendency to avoid giving negative responses. And if you’re dealing with junior individuals, they may not speak up on an issue without permission by a supervisor.

“Yes” is a word you are likely hear quite a bit. If you ask your offshore counterparts if they can have a task completed by the end of business tomorrow, and they say “Yes,” you may not have received the response you think. While you think you heard “Yes, it will be done,” they are more likely saying “Yes, I understand” or “Yes, I’ll do my best.” Understand this subtly of communication, and things will go much smoother.

In addition, Jason Busch and William Busch have a thought provoking post on their SpendMatters blog. In it, they connect the dots between the opening ceremony of the Olympics (lip synching and fake fireworks) to what we can learn about sourcing. Today, manufacturing is sourced to China. In the future, your IT infrastructure may land there too.

An excerpt:

If China grows up to become more than just a global sourcing superpower, it will have to realize that it can't fool the world even if thinking that doing so is in everyone's best interest. Those who are tricked will inevitably assume that something is askance in the future. In the West, we are accustomed to leveling with our peers and contemporaries -- especially in what I'd term 'good supplier relationships'. We put almost everything out on the table, then manage and measure through scorecards and other means. Sure, there's posturing, but intentional disingenuousness is scorned. In good Western-style relationships, there's no room for hiding truth, even if one party believes it will lead to a better end game for both. Ask yourself: how would you feel if a Chinese supplier cut corners or substituted materials without telling you? If you’re sourcing from China and you’re not on the ground with your suppliers everyday, I can almost guarantee this has happened.

Jason adds that the events he mentions aren't just the result of poor judgment. There are also cultural issues involved. Food for thought as you understand your offshore operations.

Update: Vinnie Mirchandani, who negotiates outsourcing and software licensing deals for a living, noted that before you outsource anything you should know the culture and conduct a well structured site visit. And the latter is critical. He notes that a structured on-site visit reveals "nuances like when you go to India try and visit in evening so you can catch live support of European and U.S. customers, frequent fresh air breaks given jet lag (and) kick infrastructure tires." On the cultural front, Mirchandani walks clients through the cultural, political and economic overview of the target country before going for a visit.