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Many companies are concerned about outsourcing to another country for the first time, but the realities of outsourcing are sometimes vastly different from what you may envision. In fact, many companies enjoy the benefits of outsourcing to countries with greater precision, global outlooks, high education levels and competitive pricing.
Pitfall 1: Opposite time zones/distance for round-the-clock care
Here are the numbers:
EST (United States): India is about 10.5 hours ahead of EST (Eastern Standard Time)
MT: India is 5.5 hours ahead
Europe: India is approximately 5.5 hours ahead
Time zone differences are one of the most notorious predicted disadvantages of offshoring. However, India’s time zone proves beneficial to outsourcing because it allows for round-the-clock care to companies in the US and other western countries. Specially, the onsite team in the parent country works mornings before passing it to the outsourced country for processing.
In this model, time zone differences are not only not a disadvantage, but a great advantage. Offshoring also means that holidays in either country don’t mean the business needs to shut down
Pitfall 2: Language and cultural barriers
Each culture has its own distinct culture, presenting both opportunities and challenges when working with others. For example, American style tends to be more on the assertive side, with this being expected at work. On the other hand, this direct style is frowned upon by many other cultures, who view it as a sign of disrespect. These kinds of differences often cause confusion and maimed feedback loops.
Since English is the second official language of India, this problem is frequently foregone when outsourcing there. With a young and educated population, India excels in sectors requiring product differentiation and precision, with some of its most common exports including metal castings, pumps and industrial engineering products.
Pitfall 2: Language and cultural barriers
Each culture has its own distinct culture, presenting both opportunities and challenges when working with others. For example, American style tends to be more on the assertive side, with this being expected at work. On the other hand, this direct style is frowned upon by many other cultures, who view it as a sign of disrespect. These kinds of differences often cause confusion and maimed feedback loops.
Since English is the second official language of India, this problem is frequently foregone when outsourcing there. With a young and educated population, India excels in sectors requiring product differentiation and precision, with some of its most common exports including metal castings, pumps and industrial engineering products.
Pitall 3: Political unrest
Needless to say, an unstable political climate in prominent outsourcing countries can cause geopolitical risks for businesses, potentially catastrophically impacting supply chains. This is true of many of the developing countries commonly used for outsourcing, and perhaps where it first got its bad rep.
Since India’s liberalization began in the 1980s, both GDP and exports have surged, with massive investments in railway, highway, port and airport development to help ensure smooth transportation. This is very different from China whose pick-up, over-the-road transport and final delivery are rarely done by the same company, making shipments virtually impossible to track.
Perhaps most importantly, since India has departed from its historically restrictive policies on investment, licensing and production, so have many of its geopolitical concerns.
Pitfall 4: High tariffs
Tariffs, or taxes on imported or exported goods, have been steadily increasing for many common offshoring countries such as China. According to the New York Times., tariffs on steel products have increased by as much as 25 percent.
On the other hand, India has a much lower tax rate, giving outsourcing to India a clear advantage.
So go ahead, give it a try: after all, there’s not much to lose – and possibly much to gain.
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