To recap, those seven risks are:
Risk 1: High Hourly Cost
Risk 2: Time Zone Differences
Risk 3: Not Agile Enough
Risk 4: Language Barriers
Risk 5: Culture Barriers
Risk 6: Knowledge Transfer
Risk 7: Questionable Code Quality
Today, we’re going to discuss the 5th risk of outsourcing: culture barriers.
It’s no surprise that the risk of cultural considerations are among the most common concerns when project managers and CIOs compare offshore, nearshore, and onshore outsourcing of their development team.
Unfortunately, it’s one few managers want to openly talk about, with good reason. It’s a risk which affects project performance and morale, yet needs a sensitive hand to discuss honestly and fairly. In today’s blog, we’ll review the statistics when it comes to cultural differences in outsourcing, offer suggestions for handling cultural differences, and reveal how we mitigate this risk with our AptudeFlex Nearshore Outsourcing model.
Outsourcing and Cultural Differences: What We Know
Outsourcing is a partnership, and like any partnership, requires communication, empathy, and mutual respect. Unfortunately, according to one 2008 study, over 60% of outsourced IT projects fail, with the root cause of outsourced project failure being cultural gaps.Gaps come in many facets, including differences in individualization, These gaps are especially apparent in offshore outsourcing, which uses workers from Eastern Europe or Asia, where the risks of mismatched cultures is greater than it is with nearshore outsourcing in Mexico.
Benefits of Nearshore Outsourcing
There are many benefits to nearshore outsourcing of your development or data science work, especially when it comes to cultural alignment.
In Mexico, the main language spoken is Spanish; up to 6 million people speak both Spanish and English. Spanish, while a romance language, shares similar words to loanwords in English. (Here’s a list of 1001 Spanish-English cognates.) Many American speakers also learn some words in Spanish in school,and vice versa.
Similar Values and Norms
According to research by the Hofstede Insights, Mexico and the US share a preference for “masculinity” and “long-term orientation”.
According to Hofstede, “The fundamental issue here is what motivates people, wanting to be the best (Masculine) or liking what you do (Feminine). Mexico scores 69 on this dimension and is thus a Masculine society. In Masculine countries people “live in order to work”, managers are expected to be decisive and assertive, the emphasis is on equity, competition and performance and conflicts are resolved by fighting them out.” American culture only slightly lags behind Mexico in this arena.
If you want to have a team who values work, achievement, and doing work well, then a nearshore team may be what you need.
Both Mexico and the US ranked the same (low) for long-term orientation.
According to Hofstede, “This dimension describes how every society has to maintain some links with its own past while dealing with the challenges of the present and future, and societies prioritise these two existential goals differently.”
Both the US and Mexico value an “absolute Truth” and prefer to maintain the status quo in terms of norms while also seeking quick wins. Hofstede says, “American businesses measure their performance on a short-term basis, with profit and loss statements being issued on a quarterly basis. This also drives individuals to strive for quick results within the work place.”
Indulgence is “the extent to which people try to control their desires and impulses, based on the way they were raised.” Both Americans and Mexicans score high here, but Mexico scores highest.
This score leads to people having a positive attitude, a desire to enjoy the fruits of labor, and a general optimism about life.
Mexico scores high on Power Distance (84), whereas the US scores a much lower score (40).
According to Hofstede, “Power Distance is defined as the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally.”
This means that while both groups see inequality, Americans tend to dismiss it as abnormal or something to be challenged, whereas at a score of 81, Mexico is a hierarchical society. Workers more or less accept a hierarchical order in which everybody has a place and which needs no further justification. When you need a team that will work toward common goals and work together to get it done under direction, then a nearshore team is what you want.
Another area where the two cultures differ is in individualism. Per Hofstede, “The fundamental issue addressed by this dimension is the degree of interdependence a society maintains among its members. It has to do with whether people´s self-image is defined in terms of “I” or “We”. In Individualist societies people are only supposed to look after themselves and their direct family. In Collectivist societies people belong to “in groups” that take care of them in exchange for unquestioning loyalty.”
For Mexico, “In collectivist societies… employer/employee relationships are perceived in moral terms (like a family link), hiring and promotion decisions take account of the employee’s in-group, management is the management of groups.”
This means that if you want a loyal, long-term employee to work on a team, then hiring a nearshore team who has already proven to work well with their project lead and fellow team members is ideal
Another dimension mentioned by Hofstede is Uncertainty Avoidance:
“The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in the score on Uncertainty Avoidance.”
In cultures with a high uncertainty avoidance – like Mexico with it’s score of 82 – people tend to value rules, good work, precision, and punctuality.
Another benefit of using nearshore resources is the similarity of holidays. Some federal holidays in Mexico are the same as in the United States:
- New Year’s Day (Jan 1)
- Christmas (Dec 25)
And some are celebrated by some Americans:
- Good Friday (Apr 10)
- All Soul’s Day (Nov 2)
The similarity in amount of federal holidays means that the two teams are more likely to be “in sync”, understand each other’s holiday schedule, and work together at the same times.
Familiarity with American Culture
Many Mexicans have visited the US at least once to visit family or see tourist attractions; likewise, many Americans have travelled to Mexico to visit beaches or tourist attractions. While this familiarity doesn’t do all of the heavy lifting of cultural fluency, it at least creates some shared context to build upon.
Proximity for Face-to-Face Meetings
Politics aside, one big benefit of nearshore outsourcing is the shared border and proximity for face-to-face meetings. Unlike your team in India or Ukraine, a Mexican outsourced development team could be met with through a short plane trip when travel is open.
Similar Time Zones
Another benefit? Similar to US times zones. Instead of being 5, 7, or even 11 hours apart, your workers could be working in close timezones to your own, making cultural differences seem less different. In Mexico, there are four time zones, each similar to those in the US:
- Zona Sureste (Southeast Zone) – UTC-05:00 year round; equivalent of U.S. Eastern Standard Time
- Zona Centro (Central Zone) – most of the year, it is the equivalent of U.S. Central Time
- Zona Pacífico (Pacific Zone) – most of the year, it is the equivalent of U.S. Mountain Time
- Zona Noroeste (Northwest Zone) – identical to U.S. Pacific Time even on Daylight Savings Time
How We Address Cultural Differences at Aptude
We are a diverse team
Unlike some outsourcing agencies, we aren’t a team of Americans running outsourced teams with no context of the international markets and workforce. Instead, our internal leadership team is a blend of experts from Mexico, India, Malaysia, and the United States.
Holding Our Team Accountable
We value results. Each client project is led by a Project Lead who facilitates communication, manages project timelines, and holds the team members accountable.
We try to keep our team members fully engaged but not overwhelmed, so they stick with us long-term and get amazing results for our clients. We also provide +1 staffing on many engagements so clients can “ramp up” quickly.
We believe in frank, open discussion and solution orientation. If there’s a problem, we want to know about it and resolve it. We believe in regular touch points and setting clear expectations from the get-go. To support communication, we use remote tools such as SharePoint and Teams to keep the team in sync.
We will communicate with clients as often as needed, including up to several times a week if needed to keep critical projects moving forward. Clients know they can come to their Project Lead and Aptude contacts with any issues, and that issues will be resolved quickly.
Based on our experience, the kind of project management methodology you apply to software projects needs to differ based on location. If you prefer strict waterfall project management with rigid and well-documented requirements, then a team in Asia might be better. However, if your team is used to working in an agile, independent way, then using a nearshore team is best because the culture is so similar to western culture.
If a few more agile, remote developers couldn’t hurt, then let’s chat. We can provide Full stack, UI/UX, BI/Visual Analytics and Data science/AI developers in as quickly as two weeks and for $38/hour and up.