Offshoring Information Development
We just completed our first workshop on Offshoring and Outsourcing Information Development. The workshop participants represented a cross-section of managers from those who have already started offshoring and outsourcing projects, those being asked to do so by senior management, and those in the earliest planning stages. A common thread among the collected experience of the participants was the absence of a clearly articulated set of goals.
In the workshop, we emphasized the importance of defining the goals for outsourcing information development to either a domestic or offshore vendor or setting up a new remote department of writers in a developing country. Without a clear set of goals in place, we find it impossible to determine if the outsource or offshore project has been successful.
The most frequently stated goal for offshoring is, of course, reducing the salary costs for information developers. An individual writer earning $60,000 per year in salary in the US or its equivalent in Western Europe may be replaced by a writer earning $10,000 to $15,000 in a developing country like India, China, Singapore, Romania, Chile, or elsewhere. The savings in personnel costs look attractive to corporate executives, especially if they ignore the start-up and transition costs or the quality of the work produced.
However, the goal of reducing personnel costs by transferring information development to low-cost offshore workers may not be the only goal actually used to measure the success of the project. In one case, the inhouse software developers complained that the offshore writers demanded too much of their time. They received email questions that they could not understand or that demonstrated that the offshore writers had little or no understanding of the product or the project deliverables. They received content to review that was so unacceptable that they needed extra time to rewrite or revise extensively. They complained to senior management that the offshoring of information development was simply “not working.”
Based on the reaction of the software developers, it is clear that cost reductions were not the only goals of the project. The developers expected no increase in the time required of them to transfer understanding of the product or review draft documents. They also expected that the quality of the questions and the drafts be the same as they were used to receiving from the inhouse writers. The change in quality and the increased time required led to a decision to withdraw the project from the offshore vendor.
We advise managers to investigate the real goals behind the offshoring and outsourcing decisions made by senior management and the unvoiced assumptions in the goals of managers and staff in peer organizations. The publications manager must take responsibility for carefully articulating the goals of the offshore or outsource venture and asking for sign-off of these goals by senior management. If management expects the same level of quality in the offshore or outsourced work, then the quality standard must be a stated goal. If management expects the same deadlines to be met, then the schedule requirements must become part of the goals.
To begin an offshore or outsource venture requires that you prepare a business plan. In the plan, you must begin by articulating the goals of the venture. As part of the goal statements, you must include measurements that will help you decide if the project has been a success or a failure. You must also decide what percentage of the measured goals must be met before you can move from the transition phase of the project to full implementation. By creating transition milestones, you provide the new employees or the vendor an opportunity to work successfully toward the ultimate goals of the venture. You help everyone recognize that transferring skills and knowledge will take time and add to initial costs.
Stephanie Overby’s article on offshore outsourcing in the September 1, 2003 issue of CIO magazine reported that 50 percent of offshore outsourcing projects fail. A significant element in the failure rate is the absence of clearly articulated and measurable goals. Too often, senior management issues an offshore edict without explaining what they are trying to achieve other than simplistic reductions in personnel costs. As a publications manager, begin your business case with a careful goal statement. Then, ask for agreement from your management. Don’t be caught later in the face of poor quality results and increased costs. Without measurable goals in place from the start, your future complaints about quality problems and cost increases may fall on deaf and ignorant ears.