| e outsourcing has proven to be an effective method | | | | inspections throughout the process along with orders |
| for firms to increase profitability and to stay | | | | padded with additional inventory to account for |
| competitive in the global marketplace. Yet, with these | | | | unexpected quality problems. Also, there is no |
| gains one must address and manage the risks | | | | substitute for strong documentation of work |
| involved to be successful. The risks include cultural | | | | processes to insure adherence to quality standards. |
| differences, communication, quality measurement, | | | | Managing specifications or requirements can be a |
| managing specifications, security, and organizational | | | | troublesome area and once again is a problem |
| issues. | | | | stemming largely from poor communication and rushed |
| Cultural differences can cause risk when you presume | | | | schedules. The offshore partner can be pressed to |
| that your culture does things the right way and that | | | | meet tight schedules without proper pre-flight |
| other cultures do things the wrong way. Worse yet is | | | | planning. This pre-flight planning time is well spent on the |
| when you assume that everyone understands your | | | | front end of a project since expectations can be |
| culture, or when you assume that you know theirs. | | | | thoroughly communicated along with concrete |
| Although these biases are not specifically American, it | | | | specifications of the final product. Slowing down and |
| might seem so when you talk to other executives | | | | verifying milestones and commitments makes for |
| from foreign companies that work with American | | | | successful projects, while last minute expedites and |
| companies. American companies come across as | | | | verbal instructions open the project to unnecessary |
| both arrogant and ignorant at the same time. US | | | | errors. |
| companies will be well served to solicit help from | | | | Fears of security breach or loss of intellectual property |
| international business consultants when doing business | | | | are real concerns, too. In this case, extensive |
| with a different culture for the first time. | | | | reference checking is in order to verify the integrity of |
| Communication is fraught with risk due to time zone | | | | the partner before going into contract. Additionally, an |
| differences, language differences, and technology | | | | outsource partner should have documented policies |
| challenges. Dramatic time zone differences can slow | | | | protecting the rights of the US based firm; of course, |
| communication in our fast paced business world, while | | | | this policy needs enforcement. A good rule of thumb is |
| language differences can cause errors and rework in | | | | to provide sufficient sensitive information needed to |
| addition to conflict in the workplace. Both the offshore | | | | complete the work, but no more than that. Auditing the |
| outsource partner and the US headquartered firm | | | | outsource partner’s facility ahead of time is a |
| need to invest in staff who are fluent in the language | | | | good idea; the audit should include a viewing of the |
| and have specific cultural knowledge. | | | | security policies and inspecting the physical plant for |
| Quality measurement is risky due mainly to differing | | | | security. |
| methodologies for measuring quality along with the | | | | Finally, US organizations may be structured and |
| ownership of the quality process itself. Outsourcing | | | | operate differently than the partner organizations. |
| partnerships must agree to a standard measure of | | | | Accommodations to these differences might include |
| quality and to the steps in the measurement process | | | | routine meetings with key project management |
| such as design reviews, which might catch quality | | | | personnel from both sides; weekly meetings may |
| problems before they happen. This could include | | | | prove the best frequency. |