by Waseem Hussain

How deadlines can kill your outsourcing deal in India

May 01, 20154 mins
Collaboration SoftwareInnovationLegal

Business relationships that focus on transaction only inevitably lead to a fixation on time and material. But India has a culturally based notion for creativity, which is the source of innovation. Clients in the west should not waste this opportunity that India has at offer.

The audience at the Nordic IT Sourcing & Innovation forum this week in Stockholm was a handsome crowd, eager to learn how to effectively work in an outsourcing business relationship. Participants debated with great interest what it takes to systematically drive innovation through outsourcing.

David Frydlinger of Lindahl, a Swedish law firm, showed how you can actually incorporate collaborative innovation in a legal contract. In a nutshell you need a written contract where a continuously efficient relationship is prioritized before the negotiated deal: “If innovation is on the agenda,” David said in his presentation, “the relational contract is the model to choose since innovation cannot be but a collaborative process.”

Juliana Goga-Cooke of GConsultancy Innovation, an advisory firm in London, picked up the ball and explained how design thinking can be a useful way for service providers to safely co-innovate with their clients.

That the organizers of the forum had crafted a well-thought through program became clear when Anthony Lamoureux of Velocity, another advisory from London, spoke. He likened the typical search for an IT outsourcing partner with using dating sites on the Internet where you “specify a series of partner preferences based on what you already like.”

Anyone who’s been involved in a vendor selection process based on RFI, RFP etc. knows how resource-hungry this approach is. But rarely ever does anyone admit that it mainly feeds the illusion that you’re avoiding a big mistake. However, as Anthony Lamoureux showed, 65 percent of outsource deals fail to meet their promises and finish early. Innovation is reduced to an outlandish thought.

All this is quite relevant also when working with service providers in India. It is utterly important to have a clear mind about the kind of relationship you seek with your partner there. As I have pointed out before, there are important cultural factors that can make or break your outsourcing deal with India.

Thus my presentation at the forum in Stockholm focused on how to manage the cultural chasm. I thought it to be useful to narrate how delivery partners in India usually feel about working with clients in the west.

One key sentence that I hear in this respect from delivery teams in India all the time is the following: “Our client seems to value time and deadlines above everything else.” This is quite telling in many ways. To begin with, note the undertone of frustration. It is true for any partnership that when you pay more attention to what your partner does rather than who he or she is, the contractual lock-in will be the only reason left to stay.

And when a client measures your work merely based on a ticking clock, you are likely to reciprocate that. Your main concern will be that the client pays your invoice on time.

Moreover, you’ll suppress your natural inclination to come up with new ideas. But precisely that is one of the key strengths of Indian service providers, big or small, young or seasoned. This has to do with India being at the beginning of its industrialization; its mindset is to conquer new markets while the rich economies are more in a protective mode.

But there is also a cultural factor (download this special report for a detailed discussion). Unlike the lead cultures in the west, which are based on monotheist belief systems and mythology, India is rooted in a polytheist view of the world. Believing in one god inspires you to think there is one truth and therefore a singular right way to solve a problem. However, believing in a few thousand gods and goddesses gives your mind a pluralistic bias. It considers many truths to be equal and therefore sees multiple solutions to a given problem.

Clearly, creativity is the source of innovation. Clients in the west should not waste this Indian opportunity.