Cultural ignorance the biggest barrier to outsourcing success

Jul 14 2006 by Nic Paton Print This Article

Miscommunication and a lack of cross-cultural understanding are the main barriers organisations face when it comes to global sourcing and outsourcing, according to a new U.S study.

The poll by Accenture of 200 U.S. business executives also found they believed adopting cross-cultural communication training programs could increase productivity by an average of 26 per cent.

The companies polled had all recently outsourced business processes or functions ranging from information technology to finance and accounting.

This finding, said Accenture, was consistent with the productivity increases of 30 per cent reported by executives whose companies already provide training in this area.

Two-thirds of those polled said they had experienced miscommunication issues within their global sourcing operations, compared with six out of 10 among executives at companies that offered cross-cultural training to their employees.

That number increased to almost three-quarter (72 per cent) for those whose companies did not offer any such training, said Accenture.

When asked to identify the chief factors causing problems between onshore and offshore workers, three-quarters of executives cited different communications styles.

More than half (53 per cent) said that different approaches to completing tasks caused problems, while four out of 10 (44 per cent) cited different attitudes toward conflict and different decision-making styles.

Kris Wadia, a senior executive in Accenture's network of global delivery centres, said: "In our view, the physical obstacles to outsourcing such as telecoms and facilities have largely been resolved.

"However, the soft issues, particularly cross-cultural communication, will continue to present the main challenges to realizing global sourcing's full potential for the foreseeable future," he added.

"Post-training feedback from the last couple of years suggests that long-term savings of both time and money are clearly possible if cross-cultural communication issues are identified Ė and resolved Ė at an early stage.

"There are also related benefits for companies, which include improved employee morale, and reduced attrition rates," Wadia added.