All too many companies have been dismayed by poor returns on their offshoring investments and have abandoned their efforts to find a beneficial offshoring solution. More the pity – because by asking the right questions from the start and gathering crucial knowledge, offshoring can be very profitable indeed.
In 2013 we established an offshore office in Sarajevo, Bosnia-Herzegovina, staffed with out own employees. Our motivation was a request from one of our larger clients; the company wanted to reduce costs while still maintaining their renowned high quality in deliveries. We succeeded, and we’re happy to share our experiences and advice with others who are considering offshoring.
Ensure a high level of maturity
The single most important success factor here is to ensure a high level of maturity in the applications to be migrated. If this isn’t assured, it’s essential to complete a thorough study and make necessary changes together with your supplier. Otherwise, the problems at home will simply be moved abroad and must be dealt with long-distance. In addition, you run the risk of spending the savings you’ve made (and even more) through offshoring the new delivery on solving problems. Careful preparation to ensure a high level of maturity is an absolute must.
Another important parameter is the actual transfer of applications to the new offshore environment. In many cases, we choose to set up a mirrored environment to create two identical environments, with the original in Sweden and a new one in Sarajevo. During a period of several months, we carry out parallel testing and compare the results. When the results are in principle identical, we complete the migration. As the client, you should not even notice when the move takes place.
Ensure an appropriate recruiting base
Even when these steps are carried out, it’s easy to forget the need for the right competence in offshoring. Perhaps you want to scale up your delivery, but the supplier has other clients who want to do the same. Ensure that your supplier has the right resources and an appropriate recruiting base. For example, Sarajevo has highly competent graduates from its excellent universities and technical institutions, as well as the HUB387 incubator which offers cutting-edge education in IT.
Make careful choice of offshoring country
Yet another success factor is the selection of offshoring country. Consider aspects such as transportation time and any differences in time zones. We consider the time factor for Sweden and Bosnia-Herzegovina to be quite good, with only three hours of travel time between the two countries – and both are in the same time zone . We believe this makes our offshoring solution even easier and simplifies the cooperation between teams in Sweden and Bosnia. On the other hand, different time zones can offer the opportunity to ”work around the clock”, so it’s important to consider what works best for your business.
Consider language and culture
Language and culture also affect the success of offshoring. Significant differences in views regarding leadership, responsibility, integrity, loyalty and business ethics can greatly influence a multinational project, and language can present a real challenge. Everyone must be able to understand each other when speaking on the phone, but also interpret the less obvious signs and nuances of communication in the same way.
An interesting example is one of my earlier experiences in my career: the dialogue I had as the Swedish recipient of a delivery and the Indian manager of an offshoring team. In the conversation, I noted that an Indian team member needed to develop his knowledge with respect to a particular programming language. When I returned from my holiday, the team member had been fired. What I had not understood was that in Indian business culture, this was the consequence of my ”not being satisfied” with the team members efforts. Of course this was not the case, but in the Indian offshoring supplier’s world, this was completely logical. As a result of this cultural misunderstanding, we were suddenly faced with a much greater challenge – we had lost the crucial knowledge and experience that this team member provided in the project.
The secret of successful offshoring?
Do your homework, dare to ask your supplier tough questions, and then take the plunge. It can be done – and exceed your highest expectations.
- Ensure a high level of maturity in applications earmarked for migration.
- Plan and execute a secure migration. Make sure to ask your supplier about their transfer plan.
- Ensure that you will have the right resources and competence available moving forward
- Consider any challenges with respect to language and cultural differences.
- Ask to visit the offshoring facility.
- Obtain references.
Author and contact:
Henrik Sällman, Managing Director, System Verification Bosnia-Herzegovina.
Phone: +46 73-661 28 75