Offshore Outsourcing Management – What’s the Problem?

Posted by Anthony on Sunday, November 15, 2009 · 1 Comment

Managing Offshore Outsourcing Is More Than It Seems

Offshore outsourcing vendors would make it seem easy: after transitioning services to India, the Philippines, Argentina, Jamaica, Malaysia, or your location du jour, it’s all smooth sailing. A few conference calls each week, an occasional traveling entourage of senior vendor personnel coming to your office, and web conferences. A simple vendor management recipe.

For disaster.

If you think management of offshore outsourcing vendors can be done successfully on the cheap, you are wrong. Imagine an internal business unit or department of 250 FTEs responsible for a mission critical business or IT process. If you were managing it, how often would you walk the floors, have your management team lead operation and budget reviews face-to-face, or run team building events? You use these management tools to be successful.

Now imagine that same unit located 8,000 miles away. What doesn’t happen now? All the above. Are you successful? No. Are there differences in expectations? Yes.

The problem with management of offshore outsourcing is that clients rarely visit the vendor, which results in significant communication issues. Simply put, if you outsource to a vendor located offshore, you need to adopt these six management practices to ensure your vendor meets your expectations:

Travel – Vendor management teams should visit offshore outsourcing locations no less frequently than quarterly. More frequently is better.
Travel with Purpose – Visits to offshore outsourcing locations should not be meet-and-greet events. The purpose of the travel is to do the same work face-to-face. Visits should replace the same daily, weekly, monthly or quarterly meetings that would otherwise occur remotely on the same days. In addition, add team building events, like lunches, dinners, drinks, or parties. Give your vendor management team the opportunity to get-to-know the vendor’s leadership team and their day-to-day delivery teams.
Send the Right Resources – Some clients reserve the right to travel to offshore outsourcing locations for senior executives, which is a bad business practice. The lowest level day-to-day vendor management personnel should travel regularly, including vendor managers, quality auditors, trainers, and IT infrastructure teams. Encourage internal audit teams to audit locations, too.
Mix Up The Travelers – When clients send the same vendor management personnel to offshore outsourcing locations over and over again, they collect the same data and send the same messages. Fresh faces with different perspectives contribute positively to your management capability. Alternate personnel so all vendor management personnel have the opportunity to visit. If you send the same people, they become accustomed to the offshore outsourcing vendors, and their critical insights become compromised.
Send the Senior Executives and Internal Customers – All too often, the first and last time senior executives and internal customers visit offshore locations is during vendor selection or during transition. If senior executives or internal stakeholders change, the new people may have no first hand experience with your vendors. The lack of recent first hand experience means that people will not have a good perspective on the reality of the vendor performance. Send senior executives and customers on annual visits to take part in annual vendor performance reviews.
Create an Annual Travel Plan – It is not just for budget purposes, its to ensure that the visits occur. Too often, vacations, organizational changes, or industry events create reasons for travel to not occur. In addition, last minute visits mean that the right vendor personnel may not be available. Put the travel on the calendar and book reservations in advance.