Small Business

An Atlas of Offshore Outsourcing


By David E. Gumpert

RUSSIA

Strengths: It has "very strong computer science and math" capabilities, says Rudisill of Software Ventures International. And its once-pervasive military has created a legacy of "strong process and delivery methodology."

Weaknesses: English isn't nearly as widely spoken as in India or the Philippines, making certain projects, like call centers, impractical, says Rudisill. Then there's the little problem of political instability, illustrated grimly when the head of the country's largest oil company was thrown into jail recently after expressing a desire to challenge the existing political establishment.

CHINA

Strengths: "The Chinese work ethic, on an individual basis, is great," says Miner of TRIA Group. Moreover, "If the Indian workforce can be considered experts on the older systems and the U.S. processes, the Chinese can be considered the experts on the new systems and the new way of doing things in the world."

Weaknesses: Difficulty communicating, since the Chinese often don't speak English well. But Miner believes this can be overcome "by using e-mail and instant messaging." DeLaCastro of Tatum Partners is more pessimistic, noting that government support for Chinese outsourcing is just beginning and, while China is "an excellent resource base for assisting Taiwan and Vietnam? do not recommend outsourcing to China for (U.S.) small businesses."

PANAMA

Strengths: This Central American country is another up-and-comer that bills itself as having a young, technically skilled, English-speaking labor pool, as well as being culturally close to the U.S. In addition, Panama has an excellent infrastructure, is more easily accessible to the U.S. than Asia, and is cheaper than India or Singapore, says Harnan Singh, an individual consultant based in Panama City.

Weaknesses: The biggest problem is that employees may "lack certain motivation?herefore it may be possible that some workers lack in certain areas such as customer service."

The countries mentioned above aren't alone. The world is full entrepreneurs and nations trying to get into the outsourcing game. These include Romania, Colombia, Ireland, Israel, Hungary, South Africa, and Egypt, among others. Each has strengths and weaknesses that small businesses should explore with care before making any final decisions. For example, Hungary is known for its pharmaceutical and related research capabilities as well as software development, though costs may be higher than what businesses have come to expect in Asia, as fellow BW Small Business columnist Gabor Garai recently noted (see BW Online, 2/2/04, "VCs Turn Their Gaze Offshore") Colombia has "probably the best (technical) talent in South America," says DeLaCastro of Tatum Partners. But there are "real risks for Americans traveling to Colombia."

Settling on a country for outsourcing isn't, of course, the end of the challenge. There are selection, management, and communication issues to be dealt with. But it can be an important first step as smaller companies explore the overseas options for getting work done.

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