Although more and more Western and, in particular, Scandinavian companies are choosing digitalization and automation as the path to making their businesses more efficient and competitive, there are still quite a few that see offshoring as the best way to reduce their cost base and stay ahead of the competition. Collaboration pitfalls and barriers in offshoring projects are numerous. Here, we explain a few of them based on observations from multiple offshoring projects, primarily between Scandinavia and South Asia.
Differences in management models
Management models in Scandinavian and Asian cultures differ significantly. Scandinavian models are based mostly on consensus and place strong emphasis on collaborative decision-making. In Asia, and in particular India, the management model is very authoritative and hierarchical, and the workers are normally not involved in decision-making at all. Management models are inherently incompatible and the root cause of many collaboration failures.
Work-life balance
In addition, there are several differences between Asian and Scandinavian workers in terms of work-life balance. Asian workers tend to work much more, exceeding by far the number of working hours usual for Scandinavian workers. This creates pressure and tension in offshoring projects, for instance, as onshore Scandinavian workers would receive questions after working hours from their offshore peers and feel pressured to respond straight away.
High turnover also affects the work environment. Asian workers, and in particular Indian workers, change jobs every few months, while in Scandinavia, it is common to work for the same company for several years or decades. In addition, Asian workers are expected to take care of their families and often take extended leaves due to family issues. Scandinavians, on the other hand, are often very loyal to their employers, as they can rely more on the social welfare system to support their families.
Finally, the time difference between Scandinavia and South Asia is a well-known factor, though it plays a smaller role because it is limited (i.e., 4.5 hours between Norway and India). The offshore partners tend to internalize it and compensate by simply starting work later.
Tools and infrastructure
Efficient tools and infrastructure are often considered a basic prerequisite, something we are no longer even conscious of. Communication issues in offshoring projects are unfortunately still very common. In particular, one could mention poor telephony and internet lines as well as poor videoconferencing facilities. These kinds of issues make the collaboration very hard. Still, many businesses struggle with these kinds of issues. In an offshoring project, this becomes a top important prerequisite. The offshore and onshore teams are so dependent on the infrastructure that it must work as efficiently as possible.
Transfer and search barriers
Morten T. Hansen, in his book “Collaboration,” defines several collaboration barriers, in particular search and transfer barriers. The search barriers relate to difficulty finding what you are looking for within the organization, while the transfer barriers relate to difficulty working with people you do not know well.
Transfer barriers in offshoring projects are mainly caused by a knowledge transfer phase that is too short, combined with very high resource turnover. Offshore workers are often simply unable to acquire sufficient knowledge and understanding of the subject matter within the short time allocated for knowledge transfer, and that knowledge quickly evaporates due to high turnover. Search barriers, on the other hand, arise primarily from insufficient understanding of the onshore organization. Here, the turnover and knowledge transfer also play an important role. Poor understanding of the organization leads to inefficient communication and delays in involving the right people at both ends.
Collocation
Collocating workers in the same office space can mitigate some of the drawbacks of distance. However, even in this case, one may end up with different subcultures and groups. Although people are collocated and sit close to each other, they may still tend to speak their native language rather than English. Instead of helping the communication, the collocation of the two groups will simply end up disturbing each other.
Lack of diversity
Scandinavian high-tech workplaces are often very homogeneous and dominated by natives. It is also quite common to have high expectations regarding the use of the native language, although virtually no Scandinavian high-tech workers aren’t incredibly fluent in English. This may contribute to building a work environment that is somewhat open to non-native speakers, fails to acknowledge other factors, and lacks a solid basis for efficient collaboration between offshore and onshore teams.
Cultural differences
At last, the culture is often a major obstacle to efficient collaboration. Cultural differences make it very hard to communicate, e.g., due to differences in non-verbal communication. In particular, the nods for yes and no may differ markedly between Indian and Scandinavian cultures. Another issue concerns the “try and fail” approach, which is a relatively common way of finding solutions in South Asia. Scandinavians, on the other hand, take a much more rational approach and require more evidence and data before even starting to look at a certain problem or task.
Moreover, Scandinavians are simply more cautious and reserved when assessing and reporting progress, while Asian contractors may be tempted to provide better reports than reality warrants, as they fear the consequences of negative reports from their own management.
Finally, offshore workers may have difficulty thinking independently and making decisions on their own, as they are constrained by their hierarchy and management. In Scandinavia, a lack of independent thinking may be regarded as insufficient competence and creativity, which in turn reduces trust and respect and negatively affects collaboration.
These were a few examples of reasons why collaboration in offshoring projects may be challenging and even fail. In our next article, we will look into how to address these issues and improve them.
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