The Real Issue with Outsourcing is Power Difference

If you have a buyer from a lower PDI country and a provider from a higher PDI country, there are already implicit consequences to your interaction that neither party will know about without prior outsourcing experience or natural cultural awareness(1). And even with that experience, it’s not a given that they will understand the reasons behind the challenges of outsourcing. Let me create an example from my own personal experience:

Suppose you had an American company (Buyer) and an Indian company (Provider). The American company contracts with the Indian one to provide offshore outsourced software development at a fixed price per developer. Certain key performance indicators are agreed upon by both parties and the game is afoot. Let’s also assume the Indians agree to a six month project to write a content management system for the Americans.

A typical scenario of engagement might follow like this:(2)

* The first month, everyone hammers out the requirements documents and in a great ball of fury, declares them sound and ready for implementation. The American company at this point would typically reduce the daily oversight on the project to something more reasonable, like weekly updates.

* The second, third and maybe even fourth months pass with little fanfare. The Indian developers are quietly building the specified software and the Americans are receiving updates about it that are all positive and sound great.

* At some point, the American company asks for a demo of the progress to date. The Indians put together something after a bit of negotiation (since the Americans neglected to mention the demo as a deliverable before the end). The Americans see the actual software and fly off the handle. Performance is awful, the screens don’t look anything like what they want, and the software appears to be behind schedule.

* Further code reviews by American developers indicate that the code quality is fairly poor, lacking in comments, unit tests, and filled with copy-paste blocks of duplicate code. The Americans immediately demand the project be put under different management.

* The project falls off of the rails somewhere after this. It will either be canceled, brought back in house, or will be delivered extremely late after extensive modification to the original requirements.

There’s lots to pick on here on both sides of the table. I would like to point out that the fact that I picked on Americans and Indians is actually irrelevant here. You could easily substitute “British” for Americans (3), and “Filipinos” for Indians with the same results. But why are they so interchangeable in this fashion? It’s because of PDI and the inherent cultural communication issues that come with it.

via The Real Reason Outsourcing Continues To Fail | Lessons of Failure.

Based on working as a software developer for the past almost 2 years communication seems to be the number one problem.  The second would be that we Filipinos or at least the people I work with (including me) have a tendency to as the article said act as high PDI countries act.  Nice article, don’t agree with a lot of what he wrote but it’s still worth reading.