The Pitfalls of IT Offshoring

A natural tension exists between C-level executives and internal IT organizations. The two tend to not understand each other in regards to vocabulary, financial goals or primary objectives. At it’s worst, the relationship is comparable to a wagon with a horse attached to each end. Kind of inefficient. This issue is resolved with good communication, regular face-to-face coordinating and working in conjunction with one another to develop a strategic plan with common goals. 

Recently in both big and small business, the gap is only getting bigger with the IT offshoring trend. Now, there is such great distance between the business itself and the IT department, they can’t even be compared to a horse drawn wagon. It is more comparable to Person A planted firmly in New York, holding a tin can with a string attached to a tin can held by Person B in Bangalore. Even less efficient. Now, forget about the lack of vocabulary overlap, there are differences in native language, culture and perception.

IT offshoring is applauded generally as a way for C-level executives to save money, time and headache by shipping IT maintenance far, far away. More commonly ignored are some of the pitfalls associated with offshore outsourcing. Below are three major pitfalls of moving IT management offshore.

Language and culture barriers

I spent a considerable amount of time living in a South American country. After having become proficient in the language I was simply trying to organize lunch plans with a native friend. I asked her, in spanish, “Can we have lunch with you at 12:30 on Thursday?” She responded, “Oh yes! No problem, we will have lunch.” My friend was not there when we arrived for lunch at 12:30 on Thursday. In fact, no one was. I called her and learned that she had understood we would have lunch at a nearby restaurant. She was waiting for us there. How? I still have no idea.

This was not a one-time occurrence during my stay in South America. Things like this happened a lot. Simply because what one person was saying wasn’t what the other was understanding. This happened due to differences in language and cultural norms. These mistakes meant nothing more than a failed lunch date. Mistakes in offshore outsourcing cause  delays in projects, monetary losses, data loss and other serious consequences.

According to Gigi Kizhakkechethipuzha, CEO of Offshorent, an outsourcing company based in Philadelphia, “Lack of understanding the cultural differences between the company and outsourcing vendor may cause problems in communication.”

Lack of face to face communication

Returning to the horse drawn wagon analogy, in real life, the horses are close enough that should we actually encounter this problem, we can quickly unhitch the backwards horse and redirect it so that it is pulling the same way as the frontward facing horse. Face to face communication of this type also allows C-level executives and IT providers to realign and understand difficult concepts.

IT offshoring hurts the ability of the business to resolve issues in this manner. Person B (and his team) must board a flight with their tin cans and go to New York where Person A is in order to achieve this kind of communication.

“We need to ‘go see’ a problem in order to fix it effectively. An offshore team is spread across the globe, so individuals will only ever be able to apply theory to a problem, rather than the nous required for a fast solution,” said Robbie Clutton, Director at Pivotal Labs. Offshore IT simply cannot make up for the distance.

Unforeseen costs of IT offshoring 

One of the most emphasized benefits of offshore IT outsourcing is the price tag. Unforeseen costs associated with offshoring IT services abound. Additional costs arise in the selection process of an IT provider, project delays due to miscommunication, travel costs, training costs and not to mention transition costs.

The costs of selecting an offshore provider alone could equal between $20,000 and $200,000 according to this article by Stephanie Overby. Offshoring is a long term investment with returns but only after significant investment of money and time. “The truth is, no one saves 80 percent by shipping IT work to India or any other country. Few can say they save even half that. As just one example, United Technologies, an acknowledged leader in developing offshore best practices, is saving just over 20 percent by outsourcing to India.”

 

While there are many benefits to offshoring IT services, more pitfalls than these also exist. At Elite IT we provide quality services at a fixed monthly price under a contract that protects you, allowing you to focus on your core business. Elite IT will always be a 100% U.S. based company. Visit our website and follow us on Facebook and Twitter to learn more.

 

Sources:

http://www.bizjournals.com/bizjournals/how-to/technology/2015/07/risks-and-benefits-of-offshore-it-outsourcing.html

http://www.techradar.com/news/world-of-tech/management/the-pros-and-cons-of-outsourcing-to-a-service-provider-1316261

http://www.cio.com/article/2442089/offshoring/the-hidden-costs-of-offshore-outsourcing.html

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