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Friday, January 16, 2009

11 Inescapable Realities of Outsourcing To The Philippines

Posted by Jessica Madrazo on October 9, 2008

There is no perfect system, and in offshore outsourcing, this cliché is highly magnified. The rising exodus of many companies outsourcing many of their functions is solid proof that this is, at present, the most practical solution to saving up hundreds and thousands of IT and business dollars. However, money should not be the only perceived factor involved in outsourcing. There are both blatant and furtive issues that are best acknowledged and addressed when and before outsourcing.

Asses your company, your staff, and your needs and incorporate that to what the outsourcing firm has to offer. Work an ideal system for those terms, and get the most of your offshore outsourcing team. Concede to the realities that are brought about by the undeniable situation, that, both good and bad, can still be wielded to both parties’ advantage.

Reality # 1:Time

16 hour straight operations. While you and your on site staff are sleeping, your outsourced staff are continuing the development of your work. Setting the scene as a US and Philippine contract, there is an approximate difference of 12 to 15 hours (if you’re on EST) and 15 hours (if you’re on PST). Since most outsourcing firms’ operations start at 6 am, they come in for work by the time that you’re on your way out.

Waking up, coming in the office the following day, progress has already been made, deadlines have been beaten, and you got better sleep the night before with the knowledge of less workload the following day.

Given you and your firm a very good coordination arrangement, and design an organized process, this may be the upper hand you have been looking for, enough to outperform rivals in your field.

Reality # 2: Still Time

People from different parts of the world, working on different time zones, different shifts, but on a single project.It sounds complicated, and it really is. Pending issues and questions on an aspect of a project continues to be pending -until the following day, when the outsourced staff has had time to read your mail, respond to it, and wait anxiously for it to reach you.

What could have been a five -minute conversation with a person across the room has transmogrified into an exchange of emails if the message was not sent out as clearly as you would have liked.

The situation isn’t as desperate as you may imagine. Good outsourcing concessions may not easily resolve a problem like this, but can certainly orchestrate a mitigation. Slight changes in the schedule may be made, moving a few hours on both parties to lengthen time for easier correspondence.

Before grumbles are collected from both your in-house and offshore counterparts, everyone, including you, does not need to live off-beat work hours everyday. Arrange this schedule only when necessary. Another option may also be a prescheduled meeting, like every second and fourth Monday. This will give enough time for updates, reports, and requirements when things are going smooth.

Reality # 3: Cultural Difference

This is probably one of the main concerns of every company considering to outsource its services. The reality is, the difference in cultural background may affect not only how your Filipino counterparts interact with you and your staff, but also react differently to customer situations.

When faced with this problem, remember that it is not at all the lack of experience, but rather, the difference of experience. If they deal one on one with your customers, train them. If it is more on design or technical functions of a product, inform them of what you expect. A good side of outsourcing to the Philippines is the country has been gratefully influenced by the US. Solving the cultural barrier isn’t as difficult as it may seem.

Reality #4: Language

The Philippines is the widest English speaking country in Asia. Communicating with your staff is not a very big challenge. However, there still may be some obstacles faced with actual speaking. Although Filipinos understand, write, read and speak English, listening to the language with all the works such as twangs and everyday expressions sometimes pose some challenges primarily because it is not their first language.

There is no need to be all paranoid about this. Just start by speaking very slowly to your outsourcing staff. By ensuring that the message is understood would be enough, you will find that his/her skills will greatly improve in a short period

Reality #5: Culture and Language Combined

The many experiences in outsourcing IT services to the Philippines is the repetitive avoidance of the word no, and the habitual addressing of “Sir” and “Ma’am.” The aversion of “no” typically comes from the wish to satisfy every client requirement, however, this comes as a problem when the product remains to be undelivered. For these cases, you would be better off communicating these kinds of additions to the project manager, to identify the best course of action, its possibility, and its means.

The “Sir” and “Ma’am” is one of the habits Filipino staff find hard to rub off. Culturally, everyone unfamiliar to you is addressed in this very courteous manner. Say straight out you prefer to be called by your first name and avoid unnecessary protocols, and they’ll be sure to take it on during your next communication.

Reality #6: Communication

Understand that since there is a very wide distance between you and your staff, meeting face to face is near impossible. Almost all communication will be via email, urgent matters via messengers, and important meetings via conference calls.

It’s definitely not as effective as face to face meetings. Certain messages may be misinterpreted, and vital non-verbal messages obviously missed. This why a good follow-up note confirming what has been discussed in the most recent conference call will help.

Reality #7: Limited Expertise

Carefully digest the words and note, “Limited Expertise,” not “Limited Skills.” The reason why most people hire an entire team is because expertise comes rare, and expertise in all fields is even scarcer. In most cases, a staff that has first rate programming proficiency will not always turn out to be the best person to check the quality assurance. Assess your staff, identify their expertise, and capitalize on their strength, this is the basic rule in managing people.

Reality #8: Turnovers

A rising number of skilled workers in the Philippines has created an increase in the demand for those skills. With more and more outsourcing companies being put up and expanded all over the country, the market for IT careers have also risen. The rate of turnover has skyrocketed along with these numbers. This may affect the services delivered to you because of potential knowledge loss, with the possibility that the staff you had last month may not be the one you will have tomorrow.

To minimize this problem, outsourcing companies try to impress to their prospective clients that what is being marketed are services, and not people. If this is successfully followed, it would ensue better output and assurance for the clients.

Reality #9: Costs

Because of the distance between you and your work pool, creative means of one on one and team meetings are designed. For some outsourcing companies, phone calls, conferences, and web-based meetings have underlying costs.

When considering an outsourcing company, include the issue of communication in your list of questions. Find out if it is part of the extra costs, or considered as a complimentary service for your contract.

Reality #10: Environmental Factors

Even with the accelerated speed of telecommunication and utilities improvement in the Philippines, it cannot be expected to be just as good, as reliable, and as updated as that of the US. Although there are fewer incidents of internet service disruptions and power outages, they are still issues to contend with largely due to environmental factors. The Philippines is a country often visited by typhoons and some of its cities are situated near the earthquake belt - the infamous Pacific Ring of Fire. This sometimes results to the loss (although mostly bearable) of essential services in outsourcing, and you might expect a few offline times for your staff.

Some Philippine rallies are known to be very moving, and might cause some difficulties like travel nuisances for your staff in getting to the office, however, the current government is very stable in handling economic and political issues so work stoppage due to political flux may be placed in the least of your concerns.

Reality #11: Plain Reality

Out of sight, out of mind for some, but even if you only virtually or electronically interact with your outsourcing personnel, they still are humans. Have enough insight to realize if the workload forwarded to them is still in the range of human beings, as with how you synergize with your onsite staff. Recruits treated well, function well still applies for your online staff. Remember this, and you get the best returns from your hired outsourcing team.

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