The Importance of Cultural Differences in Software Development Outsourcing with Vendors from other sides of the World

According to the Accelerance Global Software Outsourcing report, 60% of all global IT companies will outsource some software development in 2023.

Did you know two-thirds of all software projects end in partial or total failure? Standish Group analyzed over 50,000 technology projects and discovered the primary reason for failure was miscommunication due to cultural differences between the offshore development team and their clients.

Awareness of cultural differences should be an initial step in preventing misinterpretation and other errors. The success of a software development project heavily depends on understanding intercultural factors. These cultural variances impact interactions, communication, interpretation, understanding, productivity, comfort, and commitment throughout the entire project. Unfortunately, cultural differences are rarely brought up while discussing outsourcing collaborations, despite being significant barriers to the effectiveness of international outsourcing. We must remember that offshore outsourcing brings individuals with various backgrounds, languages, cultures, and values. Overcoming cultural differences is a crucial step for offshoring software development projects.

Using the knowledge gained from the experience of several businesses, this article will teach you some strategies for navigating cultural differences in outsourcing. This article will be valuable and illuminating for anybody wanting to hire an offshore software development team, whether they already have an offshore staff or plan to do so soon.

After reading this article, you will know about:

• What is the cultural difference, and what part does it play in offshore software development projects?
• What are the critical issues of outsourcing a software development process?
• How to overcome cultural differences by gaining cultural awareness?
• What should you pay attention to when building an outsourced software development team?
• What are the best practices to avoid cultural differences in offshore teams?
• Which region in the world is best for outsourcing software development without fearing the barriers of cultural differences?

Understanding cultural differences in software development outsourcing and how to overcome it

One of the primary obstacles to effective offshore outsourcing has frequently been identified as cultural diversity. A thorough grasp of how various cultural norms manifest in offshore initiatives and how to overcome the associated hurdles must be developed when outsourcing projects.

Whether considering a well-established business or, more importantly, a whole country or region, cultural norms take a long time to change. Technology is incredibly common in modern-day society, and software development is one profession. What does this mean practically for businesses looking to outsource software development? Why should you care? Does it matter what a person's cultural values are if they have the knowledge and expertise to complete the task wherever they are?

Let's consider an example to research the query at hand. You are beginning a project with an agile global software development team based in Mexico's central region. Your company is based in the US Plains. Given its proximity to the border, it is correct to assume that Mexico would be well-versed in your culture.

The breadth of entertainment and consumer products that people in the US and Mexico consume is fairly comparable, and people frequently travel across borders to visit their families and go on vacation.

However, does that fill the comprehension gaps caused by sensational news stories and divergent political ideologies on both sides? How does one overcome cultural differences?

While the number of Americans traveling to Mexico each year is rising, most of them opt to stay in tourist hot-spots like Cancun. Sadly, and for a good reason, such areas are more similar to the US than Mexico. They are not meant to present linguistic or cultural barriers to US and foreign travelers; they are meant to help them feel at ease throughout their time abroad and not meant to build personal relationships. On the other hand, most Mexicans have families in the US, and many have traveled there at various points outside popular tourist destinations like Disneyland. Despite having lived in the US for a considerable amount of time, they generally have a decent knowledge of its culture from an outsider's perspective.

Although people in Mexico have a fair knowledge of US social interactions, they may need additional understanding and effort on both sides for a simple transition to a working project management team. By examining the comparisons produced by Hofstede Center in this case study, you can begin to identify some fundamental differences in the expectations of people in the US and Mexico:

• In general, the US is less tolerant of inequity in interpersonal interactions than people in Mexico. Mexico's business practices frequently follow hierarchical systems and are less receptive to "flat" organizational designs.
• People in the US are more individualistic, which is consistent with their lesser tolerance for inequality. Individuality is less pronounced in Mexico, even though this dimension continually evolves and is diverse across different demographic groups.
• The two nations are relatively close regarding masculinity against femininity, with Mexico having a little greater ratio. This demonstrates what may seem to outsiders to be a rather high level of competition between people and in business within Mexico.
• Compared to the people in the US, Mexicans are far more likely to avoid ambiguity. This manifests as a decreased tendency for risk and greater dependence on practical solutions.
• People in the US and Mexico don't differ much in terms of their preference for long-term objectives over short-term ones. Generally speaking, both societies support conservative objectives.
• The level of indulgence in Mexico is far higher than in the US, in contrast to the disparity in individualism between the two cultures. Personal relationships are build at all levels in working environments.

While these fundamental distinctions and cultural divides are important, they don't provide much insight into how a group of people would approach a work scenario or how to overcome cultural differences. Due to ingrained family customs and expectations, you may anticipate some strong resistance if the Mexican crew was required to labour through the Christmas break to fulfil a deadline. However, you might also expect that the entire team will ultimately comply with the requirement due to the importance of having long-term employment and stability.

Tips for gaining cultural awareness and sensitivity

Use these tips recommended by the experts of the American Psychological Association for outsourcing projects:

• Think beyond race and ethnicity. Beyond skin tone and fashion choices, a person's culture is influenced by various factors. The person's life experiences and customs, which may or may not be visible to the naked eye, shape it.
• Ask questions and pick up knowledge. Ask queries; don't be hesitant to do so. You may discover more about someone's culture by asking open-ended questions. People feel respected and valued when others show a genuine interest in who they are.
• Make local connections. Identify nearby businesses or locations that collaborate with a group of people from a culture that interests you, and visit them. An organization such as an advocacy group, a religious institution, a college, or a social club is a fantastic opportunity to learn more and meet people.
• Pay attention to nonverbal cues. Be aware of how people around you interpret your body language. Depending on cultural conventions, the meaning of body language might occasionally change.
• Exchange stories. Sharing experiences that transcend culture is a terrific method to communicate through storytelling. Share a personal story or experience to open up the dialogue.

Key issues in everyday outsourcing software development projects

Here are specific of the key issues that occur in everyday software outsourcing relations:

Directness of Communication

Communication is the essential link between you and the outsourced team member. Thus it needs to be concise, straightforward, and easy to comprehend.

You need to research and understand the different communication styles of your outsourcing partner.

Take the example of Indian Teams. In Indian culture, people avoid giving negative responses. Junior individuals may not speak on an issue without permission from a supervisor.

Therefore, if someone asks an Indian counterpart if the task can be completed by the end of business tomorrow, and the answer is “yes,” it does not mean “yes, it will be done”. Therefore, the results might be unpleasant if you depend on this "yes" and have an urgent project.

The individual states that he will see what he can do because it would be impolite to announce that something is impossible in some cultures.

As a result, the project is delayed, and everyone is under strain since the individual team member cannot immediately communicate what cannot be done. It's more likely that they try my best.

Solution

Make sure to have clear written and verbal communication with your outsourced personnel regularly and clearly. Although it might seem obvious, outsourcing companies often forget how crucial consistent and transparent communication is.

Emails are great, but instant messaging applications are also handy, especially if you want to communicate instantly with a remote team. Additionally, your workers can ask you questions and swiftly receive the responses they want. The workflow will also be quicker, and possible problems or errors may be corrected immediately. Make sure to communicate clear ideas to the entire team.

When scheduling meetings, consider your management style, the structure of your team, and the variations in your time zones. Some people prefer holding weekly meetings. While others like to gather at the end of the day to review the day's successes, others prefer daily roundup meetings.

There is no one ideal timing or frequency. The goal is to find a meeting time and frequency that works best for the outsourcing company and your team.

Once a communication schedule has been established, commit to sticking to it. You will find monitoring your offshore team's performance simpler and spot possible problems or misunderstandings early on if you arrange regular meetings with them.

Different life/business experiences mean different assumptions

Remember that the end used of the software will be your customer. The offshore team may not know your client's preferences or the best ways to convey messages or design screens. Never assume they are experts in everything. It is crucial to create a detailed brief of your requirements and development methodology before hiring an offshore software development team.

Solution

Always be explicit when giving directions, even though dialect and cultural variations exist.

Clarify all of the things you want to be done. Make sure that your outsourcing partner and you are on the same page. Use resources like charts, graphs, visual aids, or anything you need to communicate if it helps. Never presume that your offshore team members are already aware of what needs to be done, that they have the same opinions as you, or that they can interpret nonverbal cues. Be upfront to prevent future misunderstandings.

Additionally, remember to inform your offshore team if there are any changes needed. You can utilize messaging programs like Slack, ideal for real-time communication, collaboration, and file-sharing, and Skype, good for one-on-one audio conversations and instant messaging.

Native language differences

Differences in native languages give rise to concepts as low-context and high-context communication, which refer to the importance that different cultures place on indirect and direct communication.

High context communication emphasizes is on nonverbal clues and implicit communication. Understanding a message in this type of communication requires significant prior knowledge. Asian, African, Arab, Central European, and Latin American civilizations are all high-context cultures by definition.

Low-context cultures, on the other hand, rely on explicit communication, where the message is clearly stated and defined. Low-context cultures include those with roots in Western Europe, such as the United States and Australia.

Solution

To prevent any misunderstanding related to the language barriers, it is crucial to reconfirm the meaning of your message and ensure that it is accurately and completely conveyed to the offshore team.

Another option is to utilize translation services or software to translate text and documents between languages to clearly defined tasks. Additionally employing an interpreter, who may facilitate communication between personnel from other nations can be beneficial. By employing these technologies, businesses and overseas suppliers may surpass the language barrier and take advantage of offshore outsourcing.

Hierarchy and status

Separations between social groups can be rather rigid in some countries. These beliefs impact how we address individuals, whether officially or casually. When a consumer calls a business with a question, Western society dictates that a corporate representative will frequently just use the person's first name.

It would be considered unfriendly for a caller to introduce themselves only by their first name if the caller was a member of a culture with rigorous rules of social behaviour. This suggests too much familiarity.

When a deadline or bottleneck is communicated by a subordinate without the manager's or supervisor's consent, as in the example of an Indian culture provided in point #1, it is regarded as impolite, and you may receive incorrect or incomplete information.

Solution

The best solution to this issue is to assign ownership of tasks to a responsible individual on the offshore team. The accountable party will be required to convey daily progress in a formal report, together with any bottlenecks and deadlines.

Business decision making

Offshore outsourcing may encounter difficulties due to a lack of transparency and control. Communication, quality, and timely delivery of issues are common when businesses outsourcing teams.

Additionally, it's possible that the client won't have direct access to the people conducting the task, preventing them from observing their work.

Customers should not anticipate initiative and improvement recommendations and should not be dissatisfied. A person's ability to take the initiative is frequently valued in many Western cultures, and we do not want our behaviour constrained by excessive bureaucratic processes, which is another crucial point to comprehend.

Other cultures have considerably more constrained freedom of choice and value following well-defined rules above acting independently and taking a chance.

Solution

Businesses must be clear about what they anticipate from their offshore outsourcing provider to address this difficulty. Additionally, they should ensure that the outsourcing partners are well aware of their company's operations and the project's particular requirements.

Finally, frequent lines of communication should be set up to allow for the appreciation of input and initiatives from those involved in the development.

Individual vs group

In Western society, freedom of expression and the individual are valued, but in many other cultures, the emphasis is much more on the group. People are cautious about what they say because their right to free speech is regarded as subordinate to the interests of the collective.

Therefore, humour, frequently used to break the ice and help people unwind, may be dangerous, especially comments regarding politics, religion, other nationalities or groups, or even general humour.

Solutions

The best approach to overcome the cultural barrier is to understand cultural differences and values by conducting research before hiring the outsources team.

Time

Cost saving is not the only thing to consider. Given that there are several offshore outsourcing locations to pick from, time zone variations might be a problem. For instance, depending on the offshore employees an American corporation chooses for a contract, there may be a 10-hour time difference if they work on the East Coast. Simply put, this can make communication and remote collaboration challenging.

Scheduling meeting is another issue caused by time zones. It might be challenging to plan a meeting that works for both sides if one team works during the day while the other team is asleep.

When several teams are working on various project components dispersed across various time zones, it can also be challenging to keep track of the work that has been finished.

Solution

Consider the time zone differences between your business and the business you are outsourcing to. To do this, you can use an online time zone converter, schedule fewer meetings, and keep time sheets updated to facilitate faster asynchronous communication.

Poland is well situated in the middle of Europe, with a time zone relatively near the United States and Asia Pacific. Consequently, Selleo can be a fantastic alternative if you seek an offshore outsourcing site with less time zone difference.

Management style

Although it's not impossible, project management for offshore outsourcing might be difficult. The most crucial thing is ensuring that everyone participating in the project understands the aims and objectives and that there is a solid communication channel so that any difficulties or issues with the offshore operation can be dealt with immediately.

Solution

Another crucial element is having a competent project manager who is familiar with the complexities of overseas outsourcing and can handle any possible issues that can emerge with offshore contractors. The administration of projects by offshore teams may be successful with the correct preparation and communication.

Mum effect

A situation of no communication is known as the "Mum Effect." It refers to when one or more stakeholders choose to remain silent and allow a project to proceed despite knowing that the project is failing. Their findings suggest that the danger of the mum effect is more serious in Asia than in the West due to cultural dimensions.

Solution

The easiest approach to deal with these issues is to establish clear communication channels, time-sheets, and protocols early on and ensure that everyone involved adheres to them.

Additionally, it's critical to foster an atmosphere of mutual respect and trust amongst the teams and provide many possibilities for communication and teamwork.

Major cultural circles of software development services providers

Some of the best countries and their pros and cons of outsourcing software development projects are below:

Offshore Software Development in Eastern Europe

More and more global organizations consider Eastern Europe a suitable option for hiring from abroad.

The best countries for offshore software development projects are:

• Poland
• Ukraine
• The Czech Republic
• Romania
• Bulgaria

Pros of Eastern Europe Software Development Teams:

• Over 1.3 million developers work in the enormous industry of Eastern Europe, which is expected to keep rising over the coming years. Additionally, between 4,500 and 6,500 suppliers in Eastern Europe provide outsourcing for software development.
• JavaScript (65.3%), HTML/CSS (55%), SQL (49.3%), and Python (48%) are among the computer languages that software engineers in Eastern Europe use the most often.
• Because Eastern European developers are fluent in written and spoken English, they offer effective communication. East Europe is a more attractive option for international organizations because of its strong technical educational background, high English ability, and commitment to work.
• The time difference between businesses based in the United States, Canada, and European nations is essentially nonexistent, which is advantageous.

Cons of Eastern Europe Software Development Teams

• Eastern Europe is known for having higher costs compared to countries in Asia when it comes to software development. However, despite the higher costs, Eastern European countries often provide good value in terms of software development quality. This quality can be a deterrent for some startups or medium-sized companies due to the associated expenses, but it can also serve as an incentive for those who prioritize quality and are willing to invest
• Holidays are a difficulty for projects that must be completed on time since Europe has more of them than anywhere else in the world. Western Europe software development teams

Offshore Software Development Teams in Western Europe

The best countries for offshore software development projects in Western Europe are:

• Germany
• UK
• Netherlands
• Finland

Pros of Western Europe Software Development Teams

• Because of the superior education received in Western Europe, its IT experts generate work of the highest quality.
• Employers may anticipate informed, well-trained personnel who can provide work of a quality that is on par with or better than industry norms.
• Offshoring businesses to Western Europe doesn't cause a problem with the time difference.

Cons of Western Europe Software Development Teams

• Western Europe has the highest recruiting costs for software development companies among all regions.
• Software developers are in short supply in Western Europe; therefore, they hire workers from overseas to fill the gap. A stack developer with Indian ancestry will likely work on your project.

Global Software Development Teams of Asia

One of the finest corporate tactics ever for cutting operational costs is outsourcing, made possible by the low rates offered by Asian software outsourcing teams without compromising quality.

Major Hubs for Software Development in Asia:

• India
• The Philippines
• Singapore
• Vietnam
• Malaysia
• Taiwan
• China

Pros of Asian Software Development Teams

The labor cost is very low in Asian countries compared to the European Market.

• Asian software development outsourcing teams excel in two areas: innovation and talent variety. Companies may find professionals in nearly every industry in Asian cities like Bangalore, from cybersecurity to IoT, telecommunications, and banking.
• Early in the 1980s, Asia accounted for less than 20% of global exports, but by 2021 that percentage had increased to 36.3%. Additionally, increasing foreign direct investment (FDI) flows from companies like Nike, Amazon, Google, and other IT giants have produced a quick and steady economic expansion that has shown sturdy enough to withstand the economic downturns that have negatively impacted Western countries.
• Most Asian nations do a decent job of matching the ideals of the nations they do business with their corporate principles.

Cons of Asian Software Development Team

• One of the main drawbacks of working with Asian companies is the time difference between those in the USA, Canada, and Europe.
• Asia is home to many scam businesses that fail to fulfil their promises. A thorough search and user reviews might be helpful to avoid these frauds.
• Another problem that might cause deadlines to be missed in many Asian nations is slow internet.

Read also: IT outsourcing contracts I A Simple Guide To Complex Legal Matters

Summary

Are you considering outsourcing software development? If so, vendors that have a good understanding of cultural differences and effective ways to address them from the beginning will be your best choice.

Trust and understanding are crucial aspects of team formation, particularly in agile or DevOps implementations.

Selleo offers offshore software development to many partners worldwide. We provide outsourced development teams to our clients, equipped with the necessary elements to ensure success. This includes team-building approaches tailored to your specific situation and project.

Our teams have shorter geographical distances and more working hours compared to offshore providers. We would gladly discuss your next project and how we can assist you