Offshore Outsourcing Failure, or Change Management Failure?

I heard another story of failure with a software development team working from India for a client in the U.S. yesterday.  Mulling it over this morning, I am struck by the number of factors racked up against this team ever succeeding in the first place, yet the interpretation of the American client focused on only one element – that the team was based in India.

What I heard was not as simple: the vendor was pushed on the development manager by a new senior exec, and was resisted by the local development team; the vendor had no formal QA processes; the vendor was a very small company, seems to have had challenges with recruitment and retention, and their team wasn’t consistent from one week to the next; etc.  These challenges were intensified or aggravated by the team working across cultural differences, language differences (Indian English is not the same as American English), and time zones.  However, most of these challenges could, and in fact, often do, occur with locally-based vendors,  too.  In my view, this is less an “offshore outsourcing” failure, but a project management failure and a vendor failure, aggravated by the challenges of working with a globally distributed team.

Efforts earlier on to ensure buy-in from the development organization and properly vetting the vendor could have possibly prevented this meltdown.  These are two standard change management elements in any significant project which, at least in hindsight, appear to have been given short shrift.

In addition, all parties in any global project need to ensure that core project management elements are both fully implemented, and adapted for a global team.  Some of the basics include:

  • Project structure. Spell this out in detail: team members, roles, responsibilities, reporting structure, and time commitments, by project phase.  For a global team, it is essential to document these expectations and to have initial in-person meetings for key team members to build relationships with one another.
  • Communications. Design a communication plan that specifies regular communications across multiple communication modes and parties (in person, video, email, phone, IM; individual, team, stakeholders), and addresses all project elements, including project deliverables, financials, relationship, and strategic value.
  • Shared understanding. Ensure that all team members, across all locations, understand the project’s end user needs, the work process and methodology, and how to use the work tools (e.g., code repositories, wikis or KM applications, ticket systems, QA software, etc.).  This will require an upfront investment in training and should include some co-location time, to enable team members to understand organizational culture and values.
  • Appropriate infrastructure. In IT projects, this typically includes computers, servers, internet, back-up power, security, etc. Don’t forget the “soft” infrastructure of adequate communication channels, travel support, HR policies, training, etc.

These are standard elements in any project management or consulting methodology, but they are frequently neglected, particularly when small businesses are involved, as being “overkill.”  When these aren’t in place, the project is likely to fail, with financial and reputational losses for both client and vendor.  All too often, I see companies start offshore engagements with a focus on the rates and the contract, when the attention really needs to be on sound change management practices.

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