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Offshoring Challenges: When the Vendor Honeymoon Ends |
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By M. M. “Sath” Sathyanarayan, President of Global Development Consulting, Inc
 Many companies are finding that once the “honeymoon period” in offshoring is over, issues tend to crop up with the offshore vendor. When you started working with your vendor to set up the initial project(s) for offshore work, they were attentive. You felt they considered you to be the most important client in the world. They took the time to educate their people about your company’s specific needs. Unfortunately, things have changed. Now your offshore vendor seem distracted and distant; their staff don’t seem to remember all of your needs or seem indifferent to them.
Why is this? Over time, offshore support center staff can forget the meaning of the scripts they follow. The result? Customer dissatisfaction. Scripts must be refreshed regularly. Key members of the offshore team that support you may change as the result of natural attrition or rotation policy.
Chances are high that the workload of your offshore vendor has expanded to the point it is stretched too thin. With today’s increasing move to offshore activity, competition for labor at offshore vendors is intense. While the vendors hate to turn away new accounts, try to seamlessly scale their own business, some are more successful at it than others and their “growing pains” can hurt you.
Since the focus of many senior vendor managers is business acquisition rather than operations, your project, which is now in the delivery cycle, can suffer.
In addition to technical staff, the key ingredient to success is management talent at the vendor location at all levels, especially at the team/project lead levels; yet this cadre is in high demand in the industry and in short supply.
What can you do?
- Start small and build. Successful organizations have begun their offshoring initiatives with pilots. Figure out the right processes, procedures and staffing, and build on those successes.
- Communicate. Institute regular management reviews, make adjustments accordingly, and clearly articulate expectations. Lack of communication has been the source of many derailed initiatives.
- Stay involved: Offshoring does not mean you can sign a contract, sit back and count your savings; you must still actively manage the offshore organization as if it is an extension of your own organization, though it is legally a separate entity.
- Perform regular and carefully constructed audits that can catch problems in the bud and nip them before they can cause severe harm to your ability to achieve your business objectives.
Points to Ponder
What is the customer satisfaction level and are you satisfied with it?
- If not, how many of the issues do you attribute to the vendor and how many lie in your own organization?
- While you may have done a good job of training vendor personnel initially, how adequate is the ongoing training program – either conducted by you and/or the vendor?
- Is this vendor still right for your current and future needs? Perhaps, they were the right ones to go with at the time you made the decision. With rapid growth of many offshore vendors, what do you mean to them at this point in time? Should you develop a second source?
- Do you have a program of regular audits in place to stay ahead of these potential issues?
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About the author:
M. M. “Sath” Sathyanarayan is President of Global Development Consulting, Inc., an offshore advisory firm that that helps you create a new offshore organization or fine tune an existing one. Sath has over 25 years experience as a software industry and offshoring executive. He led the pioneering effort in offshoring at HP/Tandem Computers beginning in early 90s which resulted in direct contribution to the company’s EPS. His clients range from Fortune 500 companies to startups and include Tivo, Brio Software, Agile Software. Sath has been widely quoted in the press -- InfoWorld, CIO, Software Business, Workforce and Economic Times (India) to name a few. His continued thought leadership in offshoring is reflected in the authoritative book “Offshore Development and Technical Support: Proven Strategies and Tactics for Success”.
Sath can be reached at sath@GDCInc.biz (408) 865-0474
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