Influence of cultural differences for the success of offshore outsourcing projects

Offshoring businesses or parts of businesses is fast becoming one of the most successful and popular methods of initiating profit-making changes into modern businesses.

And when companies decide to offshore their outsourcing strategy, removing and relocating staff, procedures and providing a heightened level of onshore-offshore integration, there is a certain amount of due diligence and consideration for the obvious risk factors of such a move.

One of these, of course, is the fact that companies are offshoring for a reason – moving to another country cuts costs, in simple terms – but that the cultural differences in both languages, staff, working practices and legal issues provides a flotilla of new problems for the business sailing into the unknown.

Most of these differences can be risk factors, increasing and decreasing the chance for a successful move independently. And these main factors can be separated into three sections: corporate differences, national culture differences, and the ability of key players to deal with these cross-cultural differences.

Corporate differences, for example, can be based around a number of factors similar to any relationship between a client and a vendor. The management structure, working culture, corporate policies and operational processes all need to be discussed and uncovered to see if the marriage can be a good fit.

However, the cultural differences of working personnel can still be one of the biggest hurdles for newly offshored companies, even in the increasingly global world. Different perspectives on time management, man management, business and personal relationships, underlying attitudes and ethics are all common stumbling blocks, but can all equally become key instigators for successful enterprises.

Communication can be one of the biggest problems for international relations, although with the correct system in place, the potential benefits can be easily harnessed.

"[Indians] will give you exactly what you ask for, so it's a literal kind of thing," ICICI Infotech's executive director and president, Manoj Kunkalienkar told IDG News.

He added: "Although that can often be advantageous for the outsourcing client, it can sometimes lead to misunderstandings. Often problems are more a matter of cultural differences. Simply things like the wording of an e-mail can be misinterpreted.

"An American might send a long email and get a two-liner in reply and think, 'Is the person hiding something?' That's why conference calls are a good thing to do."

But it's the proverbial "glue that holds things together" that makes the most of the international relationships between individuals. Key players working either autonomously or within groups at either end of the chain are involved in making sure the business flows over the cultural divide with no splashes, meaning that experienced managers with either knowledge about other cultures or the ability to adapt are key to the success of any offshore business.

Of course, a combination of communication, research and cross-cultural competencies are all vital for the development of a profitable international enterprise or project, meaning the importance of due diligence and risk strategies prior to any offshore developments is vital.