Global software outsourcing (GSO) – using foreign-based computer specialists to develop software – is big business. Many countries are involved, but India remains the leader. A hundred thousand Indian software professionals develop US$3bn of software a year for foreign clients (many of whom are listed in Fortune 500). How can those who commission and those who do GSO increase value and reduce costs? How do they interact?

Where is GSO heading, asks a recent study from the University of Manchester? The complex GSO relationships between clients and Indians (earning 20 percent of the salaries of their western counterparts) are analysed. Case studies show how North American and UK clients interact differently.

The study develops a dimensional framework to examine interaction between northern clients and Indian developers. Successful relationships, those with a high degree of congruence between expectations of Indians and foreigners, are called ‘synching’. Less harmonious relationships, devoid of synergy, are dubbed ‘sinking’. The study examines six components of congruence – coordination, objectives, capabilities, process, information and technology – collectively known as COCPIT.

Sinking is neither hard to find nor to analyse. Many northern companies see GSO as nothing more than a means to cut costs at all costs while Indian software houses hope for partnership agreements with elements of capacity-building and technology transfer. Synching, even when there is goodwill on both sides, comes up against culturally determined pitfalls. US companies, accustomed to relatively long job tenure, find difficulty accommodating to high staff attrition levels in India as skilled workers grab new opportunities. British companies find that the stilted intercourse of video-conferencing, e-mailing and infrequent visits cannot substitute for daily face-to-face interaction.

Other significant findings include:

• Indian inability to relate to alcohol-fuelled activities cementing informal team-building processes in the UK or the manner in which technically adept UK junior staff are able to contradict their seniors.
• Indian staff feel UK deadlines make no allowance for Indian conditions, frequency of power cuts and obligations to family.
• Indian software developers, keen to foster synching, are establishing offices in the USA to provide feedback to bring their technology, processes and work culture into line with those of clients.
• ‘Straddlers’, those whose work experience has given them a cultural foothold in both worlds, are vital for good interaction.

Pointers for more successful synching include:

• The need for western clients to temper their ultraglobalist assumptions that - in a globalised world - distance, borders and cultural values are unimportant.
• Recognition that formal procedures sit uncomfortably with software development which requires constant improvisation and divergence from guidelines.
• Both clients and developers need to continuously re-examine their relationship and proactively move to address expectation mismatches.

Source(s):
‘Synching or sinking: Trajectories and strategies in global software outsourcing relationships’ by Richard Heeks, S. Krishna, Brian Nicholson, and Sundeep Sahay, Development Informatics, Working Paper #9, Institute for Development Policy and Management, University of Manchester, July 2000 Full document.

Funded by: UK Department for International Development

id21 Research Highlight: 25 April 2001

Further Information:
Richard Heeks
Institute for Development Policy and Management
University of Manchester
Precinct Centre
Manchester M13 9GH
UK

Tel: +44 (0) 161 275 2800
Fax: +44 (0) 161 273 8829
Contact the contributor: richard.heeks@man.ac.uk

Institute for Development Policy and Management (IDPM), UK

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