# 3 Cultural differences – 10 ways to fail at outsourcing

How can cultural differences affect project success, you ask? Well, we begin explaining what culture is. Culture is defined as the shared patterns of behaviors and interactions, cognitive constructs, and affective understanding that are learned through a process of socialization. So, when talking about outsourcing, cultural differences have been regarded as one of the most serious challenges. In the context of this blog post, we are speaking from the perspective of North American businesses outsourcing software development.

Countries not only have their own cultures but also have certain work cultures. A good example is a meeting with Indians, that is typically lead by the most senior person in the team and sub-ordinates don’t speak unless their boss ask them to do so. On the other hand, in UK all team members have the same opportunity to talk at anytime if they have a valuable contribution. The same comparison could be made for many Asian counterparts.

Asians typically do not say “no”, especially if you are a client. They are used to satisfying their clients even if they can’t do it. Many dislike giving bad news, even though your project is having some difficulties they will probably hold this information back, hoping to resolve the issue on their own. However, what often happens is that problems are not resolved and some Asian outsourcing counterparts will continue to hide the problem until it is impossible to hide any further. Unfortunately for you the paying customer, this sometimes means finding out when it is already too late to fix it.

At first glance, this doesn’t seem as a problem, but when you are working with outsourcing teams this can turn into a headache. Why? Outsourcing requires excellent communication and a near perfect understanding of what is wanted and needed. This is difficult enough amongst same culture teams on the same office, let alone with different cultures in different time zones and in different countries.
Especially in the age of web-based software such as Software-as-a-Service (SaaS), when talking about the user interface, the look and feel is vital. All messages and content should be written to the intended audience. Even though programmers are from other country, they should speak and write with the customer’s language and understand the culture.

To mitigate these differences it is recommended to analyze various providers to choose the best for your specific business. For programming, be very specific in the requirements and be sure that it was well understood. A pilot project is highly recommended prior to a long term commitment.

The US has more cultural similarities with neighboring countries such as Canada and Mexico, while Japan shares more cultural similarities with India and China. Intermingling histories and borders make them more compatible and facilitate the work.

Back to: 10 Ways to Fail at Outsourcing

IT Trends for 2010

IT Trends for 2010 say that despite of the ecomonical crisis from 2009, American technology companies will start hiring more IT workers this year but with caution.

"Current predictions of a fragile recovery for 2010 don't reveal the necessary strategic business changes and tough decisions that will be needed to make that happen across all sectors," said Cliff Lineker, BCS strategic business development director.

According to a Robert Half Technology Study to 1,400 CIOs, the 7% will be hiring IT staff in the 1st quarter while 4% will be decrease its workforce. The net 3% increase is up 3 points from last quarter’s forecast. However, IT Executives seem to be careful about hiring because they need to go slow.

BCS says that one of the key priorities for IT Heads in this year are “…to know exactly what skills their IT team possess going into 2010” and “…making sure they have the skilled staff in the right roles to exploit the value of IT consistently and effectively to move the business forward”. After knowing their needs about the IT Staff they could decide to remain the same or add more personnel.

However, many CIOs have recognized that hiring new people has more risks than expanding with an outsourcing partner. When you hire someone directly, you incur in all the overhead that this implies: recruiting processes, benefits, equipment for the workplace, training, payments, etc. with the latent risk that at any time the employee could decide to leave the company.

In the other hand, if you decide to go with an outsourcing partner, you can afford to choose whom to hire, depending on the benefits, qualification and the proposition that is given to you and the one that better fits your needs. In some cases, outsourcing partners can be responsible for the entire process and project, with SLA-like rewards and penalties that are difficult to implement with employees.

The options of outsourcing software development are: Onshore, Offshore or Nearshore. The disadvantages of outsourcing offshore are time zone differences, jetlag when a travel is required and total cost of engagement, etc.

While Nearshore Software Development to Mexico or LATAM Countries give many benefits for the IT Team, especially with regard to software and agile development referred. Indeed CIO magazine has identified 6 IT outsourcing HotSpots for 2010, which includes Mexico.