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There’s an interesting article posted on CIO.com about how middle managers at both offshore outsourcing companies and within U.S. IT organizations (i.e. retail, banking, energy) often lack the necessary skills to manage the complexities inherent in outsourcing agreements these days. The article draws upon research on the topic conducted by the London School of Economics which has examined more than 1,200 global sourcing IT, BPO and offshoring agreements over the past 16 years.
The research has determined that middle management at offshore outsourcing companies who are critical to making these relationships work often lack the ability to build and manage virtual teams across organizational boundaries, countries and cultures. They also struggle with the demands of being simultaneous coordinators, knowledge repositories and change agents.
These problems are becoming more acute because outsourcing industries in emerging nations are expanding faster than the talent pool needed to support them, according to LSE researchers. High turnover in regions such as India and The Philippines also limits the development of the middle management pool.
Meanwhile, U.S. client organizations often underestimate the amount of middle management needed to oversee these agreements, define and determine that SLAs are being met, ensure that business users are actually receiving the services or support they require, etc.
This all rings maps with what many practitioners and consultants have shared anecdotally. CIOs (and middle managers alike) have faced a lot of challenges in their struggles to make offshore outsourcing agreements work effectively.
Some of the more common and most frequently documented issues involve cultural and language/dialect barriers and time zone differences. It’s not uncommon for U.S. IT managers to start their day with a 6 a.m. call with a project team in Bangalore as their Indian counterparts are just ending their workday and then following up again 12-to-14 hours as their shifts are transitioning once again. As several consultants have pointed out, it’s a quick path to burnout for American IT managers.
But there’s another contributor to the offshore outsourcing chasm that I think often gets overlooked and that’s process. Most of the top contractors in India such as Infosys and Wipro are CMM-Level 5 certified and their software development and maintenance teams follow these processes and scripts fairly religiously. By comparison, most Fortune 500 organizations are at CMM Level 1.
I don’t pretend to be a process expert and I’m not advocating widespread adoption of the Software Engineering Institute’s CMM practices. Some critics argue that CMM blurs the dynamics of software engineering and belittles alternative models. Meanwhile, many CIOs feel that it’s not worth the time, disruption and effort to bring their IT organizations beyond CMM Level 2 or 3.
But from what IT managers in the trenches say, these differences help create a process and communications divide between U.S. IT managers and their offshore partners right out of the gate. And that’s just another wedge that domestic and offshore IT teams don’t need to have standing between them.
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