Leadership

Video: How to successfully work with an offshore team

This episode of Sanity Savers for IT Executives features tips and strategies that an IT department can use to prepare for working with an offshore team, including how to be more effective in their interactions.

As companies try to get the most for their IT dollar, they may consider using offshore resources for some of their IT needs. But having part of your team on the other side of the world can be challenging, to say the least. This episode of Sanity Savers for IT executives sets aside all of the political and career debates involved with offshoring and provides some practical advice for those who have to make it work. This includes some tips and strategies you can pass along to your project managers to help them prepare for an offshore relationship and be more effective in their interactions.

About

Jason Hiner is the Global Editor in Chief of TechRepublic and Global Long Form Editor of ZDNet. He is an award-winning journalist who writes about the people, products, and ideas that are revolutionizing the ways we live and work in the 21st century.

60 comments
umair01
umair01

Protecting intellectual property is also an issue.

Daniel_J-22521388082541631442670333001745
Daniel_J-22521388082541631442670333001745

Disgruntled employees, whether here or overseas, are the biggest threat to intellectual property in my opinion. If you work with people that treat their employees poorly, you run that risk - period. A good non-disclosure agreement goes a long way, but you have to make sure the contract can be enforced in the country you are working with. That can be an expensive journey in itself.

ShimCode
ShimCode

My experience working with offshore resources- mainly Indian - goes back 20 years. IMO, the majority of these resources are way over-rated and not as cost-effective as the bean counters would have you believe. Off shore may be somewhat useful for lower value functions like coding, configuration management and certain QA tasks but I believe offshore resources face a tall hurdle moving up the value chain due to fundamental, complex and competing Western/American and Eastern/Indian cultural dimensions. Low power-distance vs. High power-distance Individualism vs. Collectivism Masculinity (task oriented) vs. Femininity (relationship oriented) Low uncertainty avoidance vs. High uncertainty avoidance Short-term orientation vs. Long-term orientation Search for "Surviving and Thriving in Global Software Development Teams" for good info on guidelines and tips. You can also search using 'Hofstede Model' for details on these cultural hurdles impacting cost-effective offshoring.

DGIM
DGIM

It is harder if you are based in Europe, and developing through a USA team. The fact that we all speak English hides the very different cultural assumptions, and this can be made worse by the USA assumpion that everything in the world works like the Mid-west. At least Indians recognise that they don't know, and they are prepared to ask. DGIM

londoncityguy
londoncityguy

My company has worked successfully with an Indian outsourcing company continuously for the last 15 years and I?d happily recommend them. But I wonder how many of the comments have been written by people with actual experience of outsourcing rather than fear of it? Something my company realised early on is that you must build a relationship with the People you?ve outsourced to. If that means having someone on-site or you travelling to them regularly, then build it into your project plan/budget and do it. Things such as MS-Project, video conferencing, email etc. are simply tools and cannot replace face-to-face human interaction. Its humans that make projects succeed but this fact was barely mentioned in the video. Of the outsourcing company, their work ethic is exceptional and far better than anything I?ve seen in the UK or US. Their delivery according to the SLA is close to 100% and their quality is high. Compare that to Western staff who complain when asked to do an hour?s unpaid overtime to meet a deadline. I?m not suggesting its all been plain sailing and there are many down-sides. But in times when financial circumstances can only get tighter, outsourcing will continue to be a reality for more and more projects.

Daniel_J-22521388082541631442670333001745
Daniel_J-22521388082541631442670333001745

Can you share the name of the company you worked with? If you don't feel comfortable posting it here, you are welcome to email me directly. Thanks very much for your positive post.

londoncityguy
londoncityguy

Hi Daniel, I'd be happy to recommend the Indian company I use. If you'd like to email me directly, I'll revert with relevant details/contacts and answer any specific questions you might have. londoncityguy@yahoo.co.uk

reisen55
reisen55

I will gladly affirm that I have worked for several outsourcing firms. The first was EDS at Xerox many years ago and I was really just a fill-gap employee until the real candidate showed up. EDS did that sometimes. Aon Group: 1998 to 2005, Sys Admin in the World Trade Center, assisted rebuild, fully staffed internal IT department. August 2004 outsourced to Computer Sciences Corp. Immediate change: procedures, procedures and more procedures. Slowed everything down. The IT department went around them whenever possible particularly for high level management - ExVP - for whom waiting for the helpless desk in Bangalore was going nowhere fast. Got six reference letters from them. Server crashed in Secaucus in early 2005 and for 36 hours we were TOLD to do nothing until the ticketing system came back up. CSC overcharged Aon $200 million in first year, CSC fired everybody and brought in cheap cheap kids to SAVE THE CONTRACT. We were all told we met the SLA and we could be proud of what we had done. Bye. First Consulting Group - Continuum Health Partners in NYC. Horror show. 30 Stolen computers from St. Lukes Hospital in 2006, from Roosevelt cafeteria. Patient access all set to go. HIPAA rules violated. Computers loaded with Virus, Porn and Malware constantly so doctors could sometimes not get to patient data. We would GHOST a system, one week later it's all back again. The worst network I ever saw. A colleague of mine doing a BCP/DR study there found a server in a potentially flooded closet, with patient data on it, running Windows for Workgroups. So, I have some experience with these "fine" companies. They can go to hell.

dbecker
dbecker

And Homer Simpson was honored as a god for giving the workers in India the benefit of his experiences [and wrecking Monty Burns' profitability]. I work with a man from India as a Systems Programmer. He's absolutely brilliant. We looked for 4 years. He turned down the job three times. NOT ENOUGH MONEY. But since he was layed off from Washington Mutual, he didn't have many other options. And while I don't have a problem [he does a lot of the work I had to do alone for a very long time], the rest of the staff won't deal with him because THEY CAN'T UNDERSTAND HIM [in spite of the diversity classes offered by OD&T]. Having said that, the whole idea of trying to work with an offshore team in India is ludicrous for the reasons cited: 1) [As pointed out by my colleague at the next desk] for the most part those "cheap" resources are youngsters just out of school and are not highly qualified to do the work; 2) For most people, though 500 million people in India speak British, most people in the United States have to have them repeat what they said at least four or five times to understand what they said; 3) Those from India have ABSOLUTELY, POSITIVELY NO ACCOUNTABILITY for screw ups [not that we would expect them, except for the fact that they write code that would work for them and not for Americans]; 4) They are passive aggressive [the clinical term of "what they mean when they say "Yes" is that they understood what you said, not that they agree with you"; 5) It's all about money for them too, which means that they have little stake in the outcome beyond making a buck; 6) Working to fit their schedule is insanity, particularly in the area of support. Recently, Weyerhaeuser outsourced their networking support, and the support now comes out of Bulgaria. They come in when the come in and leave when they leave. Network problems? They had better fall within the worker's window in Bulgaria. Not to worry though: Since Weyerhaeuser layed off 1,000 people of the 1,500 in Corporate Headquarters by selling off their Containerboard Packaging Business, there isn't as much need for network support. See now. It all works out. 7) Now don't get me wrong. I admire Jason Hiner. Smart guy. Beneficial in the presentations he gives. Bill has saved me grief and opened new Vistas [pun intended] for me. However, one would ask the question of how Jason knows so much about outsourcing to India? Stuff going on at Tech Republic we don't care to know about?

Jim.OGrady
Jim.OGrady

Good luck holding any offshore company financially responsible for their mistakes which are usually due to lack of testing. Their QA success is HORRIBLE! I know of, and also have 1st hand experiences/knowledge of production issues at Nissan, Healthways and Bridgstone in which production was brought down causing 10's of thousands and 100's of thousands of dollars in lost revenue. These companies have to eat these costs because the offshore (in this case Indian- based) companies will not accept financial accountability for the actions or in-actions of their people/consultants.

ssakalle
ssakalle

I disagree with this statements... some one didn?t did good job of expectation setting. one advantage of working with offshore is once we have proper expectation set for them they hold to it and results are much better intending of assuming things

Jim.OGrady
Jim.OGrady

My post was on the fincial accountability and the lack of "quality" outputs produced from offshore companies. Are you saying "your company" can deliver quality, tested products/source code? If so, please share the name of your company. Additionally, please provide a list of US Companies/Clients for references?

ssakalle
ssakalle

I think you are taking about some one else response. company i work with is netlink not Tata. Thanks

reisen55
reisen55

I can forward it to you if you want, but his firm uses TATA.

Jim.OGrady
Jim.OGrady

I sent you an email as you suggested last week requesting this information, and I am still awaiting your reply...

Jim.OGrady
Jim.OGrady

I will say they were from India, but I don't want to be financially liable for naming any of them. You should be able to ask for references though. Also, I would strongly suggest that you tech interview anyone before bringing them to the US. However, this is difficult with the distance involved and time differences. Also, be certain that you receive the person that you tech out. I experienced that swith-a-roo game as well. You might put something in your contract that the off shore company is responsible for the $4500 airfare if that person does not work out for you.

reisen55
reisen55

I have in confirmation by email. His company outsourced through good old Tata.

Daniel_J-22521388082541631442670333001745
Daniel_J-22521388082541631442670333001745

Jim, I would be equally interested to know the names of the companies you have worked with that were unable to produce quality deliverables. I have never come accross a rating system that compares these companies against each other, and I would be eager to hear your feedback on which companies to avoid.

ssakalle
ssakalle

please send your info at sakalle@gmail.com and i will be happy to provied details

reisen55
reisen55

You must be the only offshore that has worked ever.

HomePageOnline
HomePageOnline

Perhaps it would have broadened the interest if you would have included different web apps that are out there to communicate with your 'off shore team' for setting and following up on projects. (I thought the video would touch on this) As is; I have no interest in this.

edmicman1
edmicman1

Based on personal experience, and from what I read, I just don't see the advantages of all the offshoring that is going on. Aside from the moving salaries part thing that management sees. Everything seems to be focused on "making things work", working around problems that would not even be an issue with local talent. What are the advantages? So, to work make offshoring work, I have to deal with language differences, work at odd hours to communicate, deal with turnover and constantly having to teach the team our business software and logic (who probably aren't even familiar with our industry), deal with multi-day lagtimes and turnarounds...and all for what? To save the $50-60k salary locally? Is the total cost after dealing with all of the above really worth it in the end? No matter where your business is located, I can't believe anything is really better than locally groomed talent. You have a team that can build a sense of teamwork. You have people available immediately. You can get feedback immediately. And most importantly to me, your business code knowledge is still controlled by you, rather than having a team of people on the other side of the world being the only people with knowledge of how things work.

Daniel_J-22521388082541631442670333001745
Daniel_J-22521388082541631442670333001745

Pete, the unfortunate reality for American workers is that our cost of living drives a salary requirement that is astronomical compared to our overseas resources. My company designs software, but we don't build it. We have the choice of hiring an American @ ~$120 on average, or working with overseas groups @ rates between $9-$40 per hour. We try to work with companies that are split between the two countries, which ensures our contracts are prosecutable under United States law, and we have a point of contact that speaks our dialect of English, and works hours that are convenient for us. We would love to hire American workers, but independant design firms face a harsh reality: Stay home - go bankrupt; Go Global - Stay in business.

Jim.OGrady
Jim.OGrady

I agree, $9-$40/hr is very cheap. However, after you factor in the "hidden" costs (extra QA people, project managers, extra meetings, voluminous documentation required - that may not even get used, etc.) of doing business with offshore companies along with production downtime or loss of customers caused from correcting bugs in the source code produced from off shore companies (mainly from them not testing their code), you would be spending more money or suffering from lost revenues that your company could have obtained if they had used American programming resources. Furthermore, offshore companies will not agree to be financially liable for their mistakes, so companies will also have to eat those additional costs. Off shore resources lack leadership skills and the ability to make intuitive decisions on their own, which are absolutely critical to successful programming. This results in poorly written source code which is difficult to maintain. For example, I recently encountered a problem with a web form that had 4 controls on it, and the off shore company only enabled/disabled the "APPLY" button if a user changed the value for only ONE of the controls. What about the other 3 controls? Unfortunately, this was a problem throughout the application and a true sign of poorly written code. Additionally, this web UI had over 2000 hours logged to it before the offshore resources stopped logging their time to it even though changes were still being made to the application. Furthermore, more than 1/2 of the functionality within the application was so "buggy" that the company intentionally abandonded using that portion of the application. This application also had a 54+ page tech spec that the offshore company read but did not use when designing and coding the application. In closing, American programmers do take pride in their work, and in my opinion, do a better job and produce higher quality deliverables which makes source code more maintainable. Companies are far better off in the long run to use resources from the USA even though the hourly rates are higher, but it a process that will take time for corporations and executives to figure out.

No User
No User

Many folks can't see beyond the initial savings. If you want it cheap you get it cheap!!!

No User
No User

I can certainly believe that a company would charge another company $120.00 an hour that is standard but I haven't heard of a company paying programmer's an average of $120.00 an hour. If $120.00 hour is the average for an American programmer then I'm throwing my hat in the ring right now. ;) I have a suggestion for you hire American's (a.k.a. people) to write your programs instead of companies. You will get much better results in both the final product and cost. You certainly WONT be paying programmers $120.00 an hour unless your sleeping with them. ;)

No User
No User

On your behalf. Being that I'm spot on I have nothing to rage about but an exposed POSER certainly would!!!! Later POSER!!!!!!

No User
No User

You just don't like them. I completely understand the situation. Why should I ask you more questions if my assumptions are wrong then just point out my errors instead of trying to insult me. That is grounds for my assumptions being right on the money pun intended. I think your full of yourself.

No User
No User

Your statement "I believe it was Ron White who said "next time you have a thought... let it go." Since you have made only one post and it was stupid you should have just let it go. Small businesses that offshore ARE NOT THE CORNER STONE of America you IDIOT!!!!! It's the ones who HIRE AMERICANS but you are to stupid to understand the dynamics of that. The only conspiracy is in your mind. I'm just reporting the facts but morons have an uncanny knack of not understanding FACTS. Since you have registered in November and have made only one post to a thread that is 2 weeks old I'll make another assumption you are Daniel_J or one of the TAG members POSING!!!!

ithelp48
ithelp48

So let me get this straight... "No User" believes that American companies are using offshoring to cook their accounting books, and believes that small business owners who use staffing agencies do so because they treat their employees too poorly to keep an inhouse staff? Wow, conspiracy theory much? Small business owners are the foundation for creativity and innovation in America. If they need to outsource labor to get the job done, which allows them to grow, and continue to contribute to our economy - who are you to criticize? It almost sounds like you are suggesting that practicing capitalism in business is something to be ashamed of. I believe it was Ron White who said "next time you have a thought... let it go."

Daniel_J-22521388082541631442670333001745
Daniel_J-22521388082541631442670333001745

I think you were almost on the verge of forming an interesting argument in your first paragraph. It was a "sky is falling" worst case scenario argument based on pure speculation, but it was a good attempt at rationalizing the situation. On the other hand, your attempt to play off your assumptions about things you can't possibly know as facts makes your other arguments look false also. If you don't understand the subject, or don't have the experience to speak credibily about it that's okay. Try asking more questions instead of making false judgements next time.

No User
No User

Your statement "Regarding hiring individuals instead of companies, the process of recruiting and managing human resources isn't worth the savings - at least not for us." First of all you admit that it "IS" cheaper to hire Americans. You must be a very small company if hiring is to much trouble. If you pay and treat people right finding and keeping them isn't a problem. If this is a problem for you then you either don't have the right people doing it or something is very wrong with your company. There are a lot of tiny companies that write specs and outsource programming. Typically they sell their wares to other companies that both market and support the finished product. Your statement "Maybe you should consider getting into the recruiting industry instead of throwing in your hat. If you can provide skilled American programmers for $40.00 per hour, I'll hire you!" That perhaps is telling of your mentality. If I started a recruiting business then we could do business together but you certainly would not be in a position to "HIRE" me since I would own my company and even if I worked for a company as a recruiter you still wouldn't be in a position to "HIRE" me since I would already be hired but once again we could do business together. I think this is telling of both your capabilities and attitude. My guess is that your just a very small investment group of sorts that doesn't have a stable persistent work environment. You look for small market needs and design product specs outsource programming and flip the product to companies that sell and support it perhaps even buying it from you. Many of those companies exist and fill small niche areas. I'll bet that is why you have a problem hiring and keeping American programmers which is distinctly different then the picture that you painted.

Daniel_J-22521388082541631442670333001745
Daniel_J-22521388082541631442670333001745

Thank you for the suggestion. Yes, we do outsource to companies that handle the recruiting on our behalf, and $120.00 per hour is absolutely what it costs to contract dedicated American programming resources through a reputable company. Our last 5 bids from the United States have been fairly consistent. Regarding hiring individuals instead of companies, the process of recruiting and managing human resources isnt worth the savings - at least not for us. Especially when I can hire an American owned company that handles the offshore recruiting for a fraction of the cost. Maybe you should consider getting into the recruiting industry instead of throwing in your hat. If you can provide skilled American programmers for $40.00 per hour, I'll hire you!

No User
No User

They do it to make the books reflect a certain way. It has nothing to do with actual cost or "getting something that is better" which of course it's not better at all. It just playing with the books like allowing the company to move money from capital expenditures to operating expenditures and various other accounting tricks to make the books reflect a certain way it's all about the books and not the bottom line, practicality, better results or god forbid common sense. Remember that public owned companies are merely investments and some private owned as well if they sell stocks. Otherwise who in their right mind would do such nonsense?

jdclyde
jdclyde

And bean counters are running companies into the ground because of it. Quality is not a consideration, and they see support as not a revenue generator. They are just to detached from reality to realize that MANY people still buy a product from a specific vendor because they THINK the company will stand behind that product. Especially for a corporate purchase, I will pay more if I know the company will be there if we have an issue. Outsourcing is stupid and so are the people that support it as a good option for business.

WiseITOne
WiseITOne

It is not as effectie to have a team overseas. The headaches involved do not justify the cost savings. Soon India will request more money or continually try to get visas to come over here so they can make the same salaries as we do. No one is ever content making half as much as someone doing the same job. I agree with everyone, where is the sense of pride and love for country? We should keep jobs in the states even if it hurts our bottom line. Unfortunately, we care about nothing more than surviving even if it means we must hurt our co-workers, friends and fellow Americans.

jdclyde
jdclyde

And will never to anything that would make it easier to send jobs to another country.

reisen55
reisen55

And please note that the one very positive response has come in FROM BANGALORE!!!!! KEEP JOBS IN THE USA.

jdclyde
jdclyde

with call centers in Canada, but it should not leave these shores.

hforman
hforman

Jason, I think the point of this thread here goes beyond time zone issues. It touches on the morality of offshore work. My opinion: While I realize that hiring an offshore company to consult on a project is legal, I tend to think of it differently. Suppose I could find U.S. workers to do the job. Let's say that I can pay them minimum wage plus required benefits. Over in Bangalore, let's say that person on the team there is making $2.00 an hour and no benefits. The company he works for can bill him out at $4.00 an hour and everyone is happy. Except for the U.S. worker who gets turned down for even a minimum wage job. Can't we consider this as an avoidance of U.S. labor laws (I didn't say illegal)? Why doesn't the company just open an office IN India? Why don't they just move to India? So far, I've had to deal with the Call Center Issue with companies that use offshore for technical support. I'm not impressed by any means. I think some companies may have to admit they get ONLY what they pay for. I have NEVER had a good experience working with offshore tech support. And I mean: NEVER.

jdclyde
jdclyde

of either of those two options. It is one thing if someone were trying to just resolve time zones, but when the only goal is to find people in other parts of the world that will work for a fraction of the price, that devalues our whole industry and everyone in it. I will not have anything to do with that. And working third shift is not that bad. I did it for over a decade.

jasonhiner
jasonhiner

That's one of the new trends - because it decreases the time zone issues.

zee62005-realty
zee62005-realty

Too pedantic for anybody other than an >absolute< novice.

reisen55
reisen55

Too many American IT jobs have been LOST over the last few years because of Managements concept that IT is nothing more than a cost center, a buncha people who do nothing because, hey, those servers are UP all of the time. Maybe that is because we ARE doing our jobs. I was part of a solid team at Aon Group that was productive, proactive and outsourced OUT in December, 2005 so that cheaper, dumber, slower kids could replace us along with a helpless desk in Bangalore. Support went to hell. Still is there too but Management sees ONLY THOSE COST SAVINGS, BOY, THOSE SALARIES. Outsourcing has destroyed American IT.

ssakalle
ssakalle

Outsourcing is cost saving but cost saving comes when other side cost is low ?in America (not with every one) there is attitude that I don?t work on weekends I don?t work late nights ... I will work for 8 hrs as I am getting paid for 8 ? and list goes on and on?.but offshore this is very different people work like any thing and yes we use to make fun of them that they work like slaves, dogs etc etc.. now when we loose jobs we start blaming to outsourcing .. Come-on we need to face this reality ..we are not ready to work for less ? this is why we are loosing jobs.. This is what we do .. if one gas or grocery is cheaper at on place we go there .. I am not saying this is only reason but sure one of the reasons

reisen55
reisen55

At Aon in Manhattan, we had a solid team of professionals that had a simple Service Level Agreement with our customers-users: RSN or RealSoonNow. They called US and we responded asap. But, we were Americans with good salary and bennies. So we were fired and CSC came in, with BancTec and kids whose last job was delivering pizza. No kidding. Service levels became 30 days to get a new computer 90 days to get a new email address Forever to get a blackberry approved Call Bangalore first ... helpless answer. 200 Servers infected by a worm in 2006. CSC actually promotes this story by the way as a positive!!!!!! Now, for a 1,200 user building, today, there is precisely one, 1, on-site technician left over. One. Now that is a dramatic expense and salary reduction. Oh, and what about this hidden metrics such as DOING IT RIGHT THE FIRST TIME!!!!!!! But those numbers are hard to add up. We would work for less IF WE DID WORK IN INDIA. BUT WE LIVE IN AMERICA. Pardon me, I don't think my family wants to move to Bangalore. And I do work weekends and nights when required. I am glad you put in a solid 8 hour day. Only that? Hmmmmmmmmmmmm.

ssakalle
ssakalle

low price things comes with low price ...if you buy things from Dollar store then you will get that type of quality? and I totally agree with you that expense is major factor but of companies are ready to take lower SLA?s then for low cost then you should not blame them for cost cutting.. 30 days wait time for PC yes or no that is management to decide.. With low cost you will not get that level of quality ? as far as Bangalore or any other place is concern then let me tell you one thing ? I my self did some research and trust me my friend cost of living is not that low? a two bedroom apt will easily cost you $800-900? and moving to Bangalore ..Why not of people from different countries can come to US to work why can we.. ????? So good luck try to see flip side of coin as well ? this is not blame game.. but in global market we need to more flexible as we can be ? if we need to move fwd