Success and failure of offshore relationships and operations depends to a large extent on the management’s understanding and their ability to adopt the changes. In many cases, mid-level managers are given the additional responsibility to lead offshore initiatives. Hard pressed for time and with little experience, they rely on personal or media sources to get vital information, which usually is outdated due to the dynamic changes in offshoring markets. Overlooking the critical offshore challenges, realities and trends can in some cases cause irreversible damage to the company.

6. My best engineer will go and lead my offshore team:

Though moving an onsite engineer to an offshore location – which is also the engineer’s country of origin – is a great tool for knowledge transfer, many companies overlook the challenges involved in this process. For one, being away from their native countries for a significant duration, several engineers are in for a reality check when they come back. Also, there are cases when inexperienced engineers are entrusted with offshore IT management solely on the merit of them being natives of the offshore location. Firms overlook the fact that offshore IT initiatives are more difficult to manage than an in-house IT setup. An ineffective offshore manager can be the perfect catalyst for the failure of an offshore team.

7. I do not need new processes to manage remote teams:

Most companies underestimate the need for better processes for effective remote team management. Small companies often consider processes to be a hindrance to their creativity and efficiency. Following the processes can quickly resolve the conflict situations and lead to early problem resolution. Rigid processes are an absolute necessity for teams that work across multiple time zones.

8. I will start with 2-5 person team and grow next year:

While, it is a good idea to be conservative while starting offshore initiatives, care has to be taken to maintain an optimal size of the team. With smaller teams, there are constraints to outsource part projects to be done entirely offshore. Overheads and fixed costs can prove to be uneconomical. Unless it is a pilot project, the offshore infrastructure and management costs are economically not very feasible. Also, the costs associated with managing offshore operations can prevent vendors from getting the expected levels of returns. Team size plays a major role in attracting and retaining the right talent as most resources consider small teams detrimental to stability and growth.

9. I have a multi ethnic workforce; cultural issues are not a problem:

This is another big assumption made by the companies. Having a multi-cultural workforce may help understand cultural challenges involving management of offshore teams. However, it rarely helps companies put together the best practices to mitigate the risks arising out of cultural differences. Not understanding or non-appreciation of offshore culture can quickly break the trust between the teams making them inefficient in the process.

10. I want all my India resources from IIT:

Though no one denies the quality of the IIT (Indian Institute of Technology) graduates, there are only seven IIT centers in India and typically, around ½ the students pursue higher education in western universities. Since most of the quality resources look for challenging opportunities and prefer working with big ticket firms, it is difficult to attract and retain top quality resources. To be cost effective, companies should match their requirements with the skill levels of the resources desired; many IT tasks do not require resources with high analytical skills. There is a 40-60% cost difference between Tier 1 and Tier 3 entry level resources