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Mastering Cultural Opportunities in Outsourcing

By August 17, 2010Article

Outsourcing development is becoming a common business practice for software companies. Offshoring can deliver numerous advantages including lower costs, additional expert resources, faster product development, faster time to market, and flexible human resource allocation.
However, outsourcing can present significant cultural challenges. There are often unobvious differences in work methods and habits due to varied cultural ways of perceiving and relating to events and people. Accommodating these differences can significantly influence the building of productive relationships and make outsourcing a smoother process.
Understanding major cultural variations
Merely associating differences with each culture doesn’t fully characterize the obstacles a business may encounter. Companies need to consider additional obstacles besides the obvious technical issues — including language, education, beliefs, behavior and time differences — which influence collaboration significantly.
For example, China, India and the Philippines engage in a process-oriented culture wherein the main focus is on structured processes and well-defined instructions. Work proceeds comfortably in Waterfall and V-model processes. On the other hand, Eastern European culture is closer to that of Western countries, tending to accept flexibility, proactiveness and the use of Agile methodologies and direct communication.
In order to optimize their offshoring decisions, software companies should recognize the following major ways that cultures differ.
Low-context vs. high-context cultures
One key aspect that differentiates cultures is context. “Low context” and “high-context” refers to the manner by which communication occurs and the way information is presented. Germanic, Scandinavian and Anglo countries for example would be classified as low context, which includes information that is usually written out in a full, concise and direct manner with numerous dependencies and is focused specifically on money figures and deal closings. Such behavior can cause specification and reporting misunderstandings.
High-context cultures, such as most Asian and French cultures, are known to be less detailed in information, with more emphasis on reputation. Confrontations are minimized and more value is placed on politeness than clarity.
High-context cultures may interpret low-context cultures as being aggressive, whereas low context cultures may perceive people from high context ones as being overly secretive.
Polychronic vs. monochronic cultures
Another aspect that differentiates cultures is their ability to multitask — referred to as “Polychronic” vs. “Monochronic” cultures. While some cultures — and individuals — are more adept at multitasking, others perceive focusing on one task at a time to be more orderly. Polychronic cultures tend to multi-task, have open-door policies, and take calls in meetings. Such mannerisms are characteristic of the American business culture.
Other countries, on the other hand, choose to be more monochronic. Typical of German behavior, monochronic cultures pride themselves in the sense of orderliness that is derived from completing one task at a time. They tend not to be fond of interruptions and may be offended if an American takes a phone call while in a meeting.
Past, present and future orientation cultures
Cultures that have a long historical standing tend to have a conservative mindset. They relate to a more traditional method and have many customs that stem from tradition. Countries such as Britain, China and Japan have many practices that focus on the formality of rituals and respect.
Likewise, there are also societies that are present-oriented, including many Spanish-speaking countries, the Philippines and Sri Lanka. These societies prefer to see the short-term benefits in lieu of future prospects. While the past is the past, and the future is an uncertain place, these societies are rooted in the physical present and the immediate benefits that can be gained.
Future-oriented societies emphasize on optimism on the future. Young nations and the United States are good examples of future-oriented societies, as they believe that they can have a positive effect on the future.
Individualist vs. collectivist cultures
Western societies value self-determination, initiative, independence and uniqueness. In individualist cultures, work is generally assigned to one individual. Collectivist cultures, however, work, comply and identify well with groups that look after them. Such cultures like Asian societies delegate assignments to a group where a consensus is required, thus causing action to be delayed.
High and low-power distance societies
In more traditional societies, a high power distance is present, which has a “boss is always right” mentality that may apply even if he or she is wrong. On the other hand, low power distance societies — found in the United States and Northern Europe — have a more open mindset where both employees and managers are on a more equal level.
Impacting the software development process
With respect to software development, cultural differences may cause problems for a global development team.
For example, American software development companies approach time differently from a relationship-oriented culture such as India. Indian workers prefer to spend more time with the American workers in order to better know each other. Individuals from time-limited societies in turn do not take time to develop trust and relationships and instead rely on legal systems to handle these problems. In cultures where time is plentiful, like Latin America, Asia or India, it is common to make a person wait. An American team prefers to handle the tasks at hand quicker than their counterparts from India. As a result, both groups may gain negative impressions of each another, and this type of misinterpretation can hinder work down the line.
Other potential differences that cause misunderstandings during the software development process include a culture’s interpretation of hierarchy, deadlines and product quality. Further, language barriers can result in misinterpretations and cause project delays. With respect to the actual software development product, cultural developments can surface as well. For example, one type of user interface may be acceptable in one culture but not another. Western result-oriented professional behavior can cause conflict in China’s process-orientated culture, where result is treated as a “death” and process itself as a “life.”
Overcoming cultural challenges
Companies should consider the proper expectations from the start and be ready to confront differences with other cultures. Further, instead of being conflicted with these issues, companies should understand the root cause of these differences and work through these “bumps.” With that being said, there are ways to avoid or minimize problems caused by cultural differences.
To minimize problems, organizations should:

  • Take part in intercultural training. Learning about the culture and mindset of the organization that you are working with can work wonders when it comes to improving the working relationship. Further, learning about the culture develops cultural empathy and the capability to solve potential intercultural problems.
  • Work towards finding cultural common ground. By doing so, both cultures can build relationships and build upon the strengths of each culture as well.
  • Let the IT manager responsible for the outsourcing project spend time in the outsourcing location. While analysts recommend that managers spend a month in the outsourcing location in order to fully understand the cultural nuances of the place, a shorter length of time — even a week — can be helpful. Team-building exercises are recommended during this stay.
  • Interview individual team members to ensure that they will be suitable for your organization’s needs. Also, double-check that the people you interview are the team members who will actually be doing the work. Additionally, ask for approval for future personnel changes.
  • Address the issue of culture and previous outsourcing experience in the Request for Proposal (RFP) document. The culture of the outsourcing company that you may be working with should be adequately described.
  • Ask the outsourcing vendor to engage employees in team building and general training activities. Some examples include learning about your organization’s culture and taking English classes.
  • Train the outsourcing provider. Provide the vendor with information about your company culture so that the vendor will have a better understanding of your company’s values, communication methods, and other pertinent cultural information.
  • Educate your employees. Provide information about the outsourcing vendor on your company website. Also, it is important to provide information about this vendor through a company email or newsletter.
  • Find ways to improve both the communication and the collaboration between the different teams. A good way to achieve these particular goals is to have personal contact and to engage in team meetings on a regular basis. Allowing team members to freely engage in giving regular feedback is another effective strategy for encouraging clear and concise communication among all team members.
  • Set some ground rules. For instance, it is important to clarify at the beginning which party is responsible for the quality of the end product.
  • Make sure that you clearly define what success is and be sure to celebrate successful benchmarks so that enthusiasm will be built within the outsourcing vendor’s organization.
  • Determine who makes periodic reports and how often these reports are made. After all, these types of reports allow you to measure the progress of your project.

Aiming for a more diverse and amicable future
Understanding cultural differences within a software development context is extremely important to organizations from a productivity and monetary point of view because people matter more in our industry than elsewhere. To enjoy the great benefits outsourcing can provide, software companies should take appropriate precautions to ensure that both the company and the outsourcing partner overcome cultural barriers that may arise. If cultural differences are handled in an effective manner, the advantages gained from working with an outsourcing partner will be extremely beneficial to the organization — and to its bottom line.
Serhiy Kharytonov is the EVP, Consulting Services, and Yuliya Sorokhan is the BA Methodologist, BAO, at SoftServe Inc., a leading global provider of proven high quality software development, testing, and consulting services.

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