Evaluating Vendors Across Cultures

Recently we were talking with an American client about an upcoming trip to India to evaluate outsourcing vendors.  They are experienced managers, who have evaluated a number of vendors for different kinds of services for their business, and they have a well thought-out vendor evaluation process.  But they’ve never outsourced work to India, and none of them had ever visited India.  Alarm bells started going off in our heads.

We had two major concerns.  The first is simply managing the travel in India.  American and European business travelers are often challenged by the double whammy of a very different culture and an underdeveloped infrastructure.  The outsourcing industry is rife with tales of prospective clients who got off the plane in Mumbai or New Delhi and then turned around, without ever making it to the vendor campus, so much so that most vendors make sure that first-time visitors are met at the airport and are provided some kind of travel support, if not actually escorted to the vendor site.  A global outsourcing sales exec told me “I would never let a client travel to India on their own for the first time!”  Beyond the initial culture shock, there are any number of relatively small issues – canceled domestic flights, missed car pick-ups, phone problems, monsoon-related road closings – that are hard to navigate in India, and can result in travelers losing whole days carefully planned business agendas.

The second challenge is more subtle, but of more importance when you are considering potential long-term vendors, and that is being able to evaluate vendors across the cultural differences.   Americans with limited outsourcing experience can easily mis-read what they are seeing.  Once visitors get past the views of roadside poverty, they may be so dazzled by a gleaming new campus that they will not question other aspects as thoroughly as they should.  Or they may misinterpret elements: they may not realize that a beautiful building in the suburbs means employees will spend hours commuting on company buses (car ownership is still quite low in India), and a more dingy-looking city building may be a better choice for certain kinds of work.  They may be put off by the poor accent or shy presentation of one manager, and not be able to properly appreciate the level of expertise or client service skills.  On the other hand, they may be overwhelmed by cultural differences and overlook clues that indicate issues that will come back to haunt them later on.   Western clients often focus questions on electricity and internet back-up, which virtually all reputable vendors have covered, and then neglect to ask for a more detailed review of employees’ education levels, which is a much harder area for foreigners to evaluate and can have a big impact on service quality. And so forth.

If you are an outsourcing buyer, and have stories about what you wish you had done differently in your vendor due diligence site visits, I would love to hear them.   Please email me directly.

This entry was posted in diversity and cross-cultural understanding, doing business in India, outsourcing and tagged , . Bookmark the permalink.

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