Volume 4, No.5
“Helping You Accelerate Your High-Tech Development Projects”
The goal of this approximately monthly newsletter is to help you accelerate your development projects by sharing many of the tips, techniques, and strategies we’ve honed during two decades of providing high-tech consulting services.
This issue focuses on two of the challenges that offshore outsourcing can bring to project management for New Product Development.
OFFSHORE OUTSOURCING AS A TACTIC
Time and again, experts in project management have extolled the virtues of having team members located close to each other (collocated teams) in getting projects completed quickly. Today, as has been the case for the last several years, time to market is still very critical to New Product Development (NPD) project success. This means fast completions are required.
Meantime, companies are now trying to reduce their development costs by dispersing the project teams throughout the world to lower projectcosts. This includes sending projects out of the company, or to portions of the company outside the local geographic area. A number ofstudies show the costs to do this are very high. But, today a common tactic is to lower development costs rather than reduce time to market. This has created a wave of offshore outsourcing for NPD.
THE OFFSHORE OUTSOURCING CHALLENGE
Even outsourcing within the U.S. exacerbates the problems associated with non-collocation of teams. All of the problems associated with having the teams separated even by a few miles become magnified. Just sending projects to different areas of the U.S. creates communications problems due to time differences between project team members. Additionally, there can be problems created by work styles and dialects spoken in different areas of the U.S.
With world-wide outsourcing, teams dispersed over many wide-spread areas affect collocation even more. Two major factors affected are:
- Significant language and cultural differences
- Dramatic time differences and lags, with teams dispersed over a large number of time zones.
PCommunication is very critical to project execution. Language and cultural interaction norms can seriously impact communication. There are a number of classes and seminars, as well as individual coaches, that can help someone to learn the cultural norms of different cultures and help alleviate some of these problems. It is especially important to learn about cultural norms regarding the giving and receiving of feedback. The PM needs to learn what works and doesn’t work.
A good way to deal with cultural and language problems is to have a trusted bilingual person on the team to keep the feedback clear and flowing. Based on my personal experience, as well as that of others, many people who normally speak a different language are able to read and write more proficiently than they understand spoken English. This is, of course, fraught with all of the problems inherent with written, as opposed to verbal, communications (i.e. tone, quick feedback missing, etc).
One of the major factors that keeps a team functioning is the cohesion brought about in personal meetings. This means a requirement for in-person meetings attended by at least the PM and the remote teams. Ideally the entire team should meet occasionally in one location. If in-person team meetings aren’t practical, at least some video conference meetings should be held to improve this cohesion. My personal experience is that video conferencing isn’t all that more helpful than phone conferences for communicating status and project concerns. But periodic video meetings can make the other team members seem more “real”.
DRAMATIC AND MULTIPLE TIME DIFFERENCES
The next largest problem with overseas outsourcing is the time differences that make information flow slow down considerably. Teleconference or video meetings must be timed to cover the times available to all groups, but this can be a real challenge if there are several teams spread out over numerous time zones.
A twelve-hour time difference can be very challenging. One suggestion to help in this area is to alternate meeting times either weekly or every few days so they can overlap conveniently for the team. (ie change from morning to evening, then evening to morning meetings). Another solution is to select team locations in time zones that are more convenient, such as an eight hour, or less, time difference.
Time differences generate a greater need for web based communications, such as chat rooms and email. Some PMs even set up special social chat rooms to handle human interactions in a different way than normal project communications. Normal communications are done via standard email.
CAREFUL TASK BREAKOUT
To minimize the effects of communications requirements on schedule for new product development projects, make sure that there is very careful project task partitioning to reduce the amount of communications required between remote team members. The good practice of creating a number of focused and hard deliverable checkpoints can be added to this. These can act as reality checks and allow for quick detection of communications problems among team members.
LAST THOUGHTS
There are a number of reports indicating that the real cost of outsoucing is yet to be calculated. The actual financial cost and the time value of that cost due to product introduction delays are hard to determine. Furthermore, the human costs of the long days and nights required by some project members are rarely taken into account. Due to these costs, the jury still seems to be out as to the effectiveness and best practises of offshore outsourcing, but it seems here to stay in some form or another. Offshoring will remain with us until the labor cost differentials are narrowed in the future.
Even so, as with all NPD projects, almost all of the standard project management practices are required to keep fast-paced projects moving towards completion. Offshoring creates a need for greater emphasis on some of them.