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The limits of the “low key” approach to supplier management
Economic literature: papers , articles , software , chapters , books. Offshore outsourcing of services: An evolutionary perspective. Ellram, Lisa M. Bals, Lydia Hartmann, Evi. Offshore outsourcing is gaining increasing importance and attention in both theory and practice. The purpose of this research is to use nine in-depth case studies to analyze the evolution of offshore services outsourcing with regard to how expectations and governance structures change over time.
Five testable propositions are presented, building on institutional theory, transaction cost, and resource-based perspectives. The cases demonstrate that offshore outsourcing is initiated because of increasing internal and external pressure to conform and reduce costs.
Read Offshore Outsourcing of IT Work: Client and Supplier Perspectives (Technology, Work and
Moreover, companies "chase" efficiency improvements in other geographic locations. But after reducing costs, companies discover more strategic benefits such as the potential to increase quality and market share. Importantly, as buyer-supplier relationships move from tactical to more strategic, expectations and governance structures change. While the SME received initial pushback from leadership on the length of the training required, he made the business case that development of communication and conflict resolution skills along with a collaborative mindset were critical for successful implementation and essential for overall employee morale.
Recognize the impact culture, time and distance will have on all stages of the outsourcing partnership and operation of the offshore location. Example: In the early stages of a recent offshoring initiative, one company provided training to onshore and offshore employees in virtual teaming and communication skills. Participants on both sides were encouraged to make explicit working agreements around meetings, e-mail protocol, daily work handoffs and progress reports. Transparency in metrics and reporting relationships were established immediately upon team formation.
Best practices were identified, recognized and shared across the globe. Understand the different expectations of vendor and offshore employees and consciously develop systems and structures to address the differences. While a vendor company employee may adjust to the culture and expectations of the client company, an offshore employee may expect mutual or balanced adaptation.
Emphasize the potential for learning and development across locations and celebrate synergies. Example: Junior employees of one offshore business location in India expressed deep pride and organizational loyalty when numerous best practices they developed were adapted by the organization as a whole.
Instead of being led from the U. The organization also offered visibility to the offshore employees by giving them credit on their contributions to market research presentations delivered to their world famous leadership team. Coach managers and key employees to help them acquire the knowledge, tools and strategies they will need to bridge cultural and generational gaps. Example: Coaching was provided for mid-level Indian offshore employees managing a team of U.
Offer employees multiple technologies to enable effective virtual communication including instant messaging, online meetings, video and teleconferencing, etc.. Be clear that even though multiple technologies are in place there will be situational limitations on the effective use of technology because of infrastructure differences. Example: It is common that offshore employees do not have laptops, reliable internet connectivity or phone connections at home. Employees often need to stay long after working hours to participate in calls that people in other locations may make casually from their own homes.
It can be useful to increase understanding of the infrastructure challenges that offshore employees face though photos and videos of their work and environmental conditions. Creating organizational norms for the use of communications technologies as well as encouraging teams to establish explicit working agreements for technology use are two other worthwhile steps. One way to offer employees the support they need is to work with a company offering business outsourcing services.
These firms will have the technology, training, and staff needed to offer global outsourcing services and can deliver customized solutions for your specific needs. Business offshoring and outsourcing activities have been a part of business globalization strategies for decades now. As a result, the business community is more savvy and agile, less clumsy, in the assessment of opportunities and management of transitions.
There is now a wealth of stories from the trenches and best practices to learn from so that companies engaging in such pursuits can avoid common pitfalls, be more keen in judgment of if and how to proceed, and make the most of the venture. Aperian Global offers a diverse suite of training solutions to help individuals recognize the impact of culture and support the development of strategies needed to bridge many types of work-style gaps — including cultural, generational, and functional — that arise in outsourcing and offshoring environments.
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