The IT community has been working with offshore teams for many years and does so for a variety of business reasons. An article at Chron.com points to economic benefits and access to skilled labor as some reasons for implementing an offshore model. IT companies have learned many things over the years about offshoring, and have even adopted a new model in certain scenarios. Nearshoring refers to outsourcing work to a close or neighboring country. This article will review some of the most important things the IT community has learned in both offshoring and nearshoring.
Communication is, far and away, the most important aspect of working with offshore and nearshore teams. However, there are many different types of communication. All are valuable, but some more so than others.
Verbal communication is very important, but has limitations due to language, accent, and dialect differences. Too much verbal communication can cause confusion if people can’t clearly understand each other. The longer the discussion, the more information all team members must understand and comprehend. With verbal communication, very concise, clear, and simple instruction is more beneficial. When the scenario allows for it, an onshore point of contact that already has a great working relationship with the offshore team can help all team members work through verbal communication issues.
Meetings are an integral part of business, including working with offshore and nearshore teams. Making sure all members of the team are included in team meetings, no matter how far they are away from each other, is key to completing a successful project. The inexpensive availability of web cameras and products such as Skype have allowed web meetings to be very valuable in assisting with communication. Having a visual picture or video of all team members along with verbal communication in meetings can be very helpful in picking up forms of nonverbal communication, such as gestures, body language, posture, facial expressions and eye contact. This helps build stronger relationships, improves understanding, and leaves fewer items open to (perhaps incorrect) interpretation.
Probably the most important form of communication for working with offshore and nearshore teams is written. Some common forms of written communication used in offices are e-mail, product documentation, and instant messaging. These all provide members of the team time to read, process, possibly re-read, and comprehend the written content before responding. Better understanding and less confusion results in higher efficiency and can save all team members time.
Offshore or nearshore teams should not assume that one method of communication is enough. Multiple communication channels can help clarify key points. It is also important to identify and resist assumptions, which are made in all forms of communication. Assumptions are often based on previous experiences. But everyone’s experiences are very different. To help combat assumptions, remember that it’s okay to state what is obvious to you. It might not be obvious to everyone.
When working with an offshore team, time differences can be drastically different. This can be either a positive or a negative depending on the type of work involved. For some types of business, it is beneficial to have the option to be productive almost 24 hours per day using multiple shifts in different parts of the world. However, this is not easy. It requires even better communication and better documentation. The expectation is that work transfers from one office to another when the work day is over. For the sake of efficiency both teams must work together, and possibly overlap, to hand off work without quality suffering. Superior and very specific communication is required. Too much ‘back and forth’ can extend the timeline of a team member’s day or extend the entire project. The most important aspect to remember for all teams is to respect the time of the other team. If one team is getting to work, the other team is getting ready to go home to their family and friends. In many areas of the U.S. and the world public transportation, which is on a very strict schedule, can drastically affect when fellow team members need to leave. Any team member not keeping these things in mind can negatively impact others and possibly the entire team.
When it makes more sense for the entire team to be in geographically similar time zones, nearshore teams make more business sense than an offshore team. This, however, doesn’t mean that nearshore teams should view business hours exactly as the onshore team. Cultural customs can lead to different hours being “standard” for their business day. For instance, in the U.S., the “standard” work day is 8am – 5pm. However, for a nearshore team in Mexico, the more “standard” day is 10am – 2pm, and then from 4pm to 7pm or 8pm. It is their custom to take a 2-hour lunch, early in the afternoon. In addition, cultures in different parts of the world are sure to celebrate different holidays. Not being tolerant of these days can have a negative impact on morale, and thus productivity.
Turnover and Knowledge Loss
Many places list turnover in offshore or nearshore teams between 20 and 50 percent. On top of the large effort to keep these teams staffed, high turnover leads to large knowledge loss. Knowledge loss is seen either when a specific team member leaves or when an entire team’s contract ends or expires. Avoiding knowledge loss requires established, up to date processes so that anyone can step into the situation and work successfully. Most of all, the answer to knowledge loss is improved and consistent documentation. That way information will remain with the organization even after individuals leave.
Who is the customer?
With offshore and nearshore teams, commonly, one side is viewed as the customer. Unless all team members have employment arrangements with the same company, there is a contract between two companies with one party identified as the customer. However, these discussions and viewpoints are best left to the “C” level people in the company. Team members who are a part of the project daily should use words more like “we” or “team,” not “you” or “us.” In addition, the accomplishments of the team should be shared with the entire team - onshore, nearshore, and offshore. This will help all members of the team feel like integral members.
It is impossible to ignore cost in offshore/nearshore scenarios. The entire model was invented to save cost. But does it? Absolutely -- in certain scenarios. The issues of quality of work, or its effect on customers aside, an offshore or nearshore team incurs a much lower cost per team member. Most of this cost is saved on salary and benefits. But there are additional costs that must be considered when using offshore or nearshore teams: long distance phone bills, web meetings and the hardware required to effectively use them, additional travel and setup costs, onshore resources, and additional software or hardware required to get started. In addition, the management and coordination of an offshore or nearshore team can surpass any setup cost. All these variables must be considered and factored into the cost of adding an offshore or nearshore team. A failed project can cost much more!
There are many positive and negative aspects to working with an offshore or nearshore team. Understanding your business and your needs for a team should determine where the team will be located. The team’s location will drive how you communicate. And communication, in its many different forms, is the key to a successful offshore or nearshore team. There will be challenges with different work schedules, cultural differences, higher turnover rates and making all members feel like an integral part of the team. Offshore and nearshore teams can deliver major cost savings, but additional costs incurred must be acknowledged and budgeted. As with any situation in business, there are many aspects to consider. Be sure to understand them, plan for them and manage them. If done effectively, an offshore or nearshore team can be very rewarding for your company.