LMD Consulting - your "last mile" delivery partner

Outsourcing is not a new phenomenon. What and how we outsource really depends on the value chain of the business. In early 1900s, Ford Motor Company used to have complete vertical integration- from raw materials to the assembly line for the production of the Model T cars - to avoid any supply chain issues. The thinking was more command-and-control and having everything under one corporate hierarchy would give managers address quality and inefficiency issues much better.

Well, supply-chain changed that because it became really hard for any organization to remain competitive in all areas of manufacturing. Instead of vertical integration, we now have a supply-chain network consisting of hundreds of suppliers manufacturing ten of thousands of parts. Specialty when combined with efficiency led to better,faster and cheaper products.

In the services industry,functions such as legal, accounting and information technology have been outsourced for some time. Add globalization to the mix, these resources are now available in every country.  Instead of relying on local service providers, now the whole world is your neighborhood - pick and choose as you please.

However, it is not as simple as we state here. There are risks associated with outsourcing because of the differences in languages, norms and culture. As an organization if you plan to use outside service providers located worldwide, here are the few tips to address the risks:

READINESS RISKS - If you are just starting out, you will face geopolitical, country-specific, and socio-economic risks. Not all countries have the legal or infrastructure similar to those of the developed countries.

STARTUP RISKS - Once you have identified which country or countries you will be working with, you have to address cultural and language communication barriers. According to Albert Mehrabian, only 7% of the communication is carried out by words (e-mail), 38% by the tone of your voice (talking to another person in the same native langauge over phone), and 55% by your body language. When you are communicating with some one in Russia via e-mail, there is a lot of room for miscommunication and confusion. You will also have to deal with the contract laws differences as well as intellectual properties laws.

RAMPUP RISKS - If you have come this far, you will now be concerned about knowledge transfer, project specific training, business know how, and the overall understanding of the context which may not be shared by all stakeholders. You will deal with project and program specific risks.

STEADY STATE RISKS - If you have come this far, then you have accomplished integration of all risk elements and thereafter the risks are only people related. You will have to worry about training, motivation and value drivers that can be quite different from one country to another.

At LMD Consulting, we help you manage these risks for you so that you do not see the global divide. Visitation and training goes a long way. When you have never visited a new country, you only know 7% about it, from what Albert Mahrabian says. It will be hard to succeed without communicating 93%. Yet organizations continue to outsource without addressing the human aspect of communication and wonder why they fail!