7 challenges you will face when buying engineering services abroad (and how you can manage them)

7  CHALLENGES  YOU  WILL  FACE  WHEN  BUYING  

 ENGINEERING  SERVICES  ABROAD    

(and  how  You  can  manage  them)    

Eurosia™  Engineering  Insight  #2  

CHALLENGE  #1:  UNKNOWN  ENVIRONMENT  

Eurosia™  Engineering  Insight  #2  

You  believe  far-­‐away  Asia  is  unstable?    

So,  what  do  you  think  of  France…  

…  Belgium  …  

…  the  Netherlands  …  

…  or  even  Germany?  

SOLUTION:  wherever  you  go,  Iind  a  partner  with  the  countries  coverage  and  knowledge  you  lack  

CHALLENGE  #2:  UNMET  EXPECTATIONS  

Eurosia™  Engineering  Insight  #2  

•   Invalid  assumptions  

•   Unarticulated    expectations  

•   Incomplete  and  ill    though  out  speciIication  and  contract  

•   Loss  of  control  

•   Inadequate  service  

•   Out-­‐of-­‐scope  charges  

•   Constant  renegotiations    and  disputes    •   Full  or  partial  termination  

Source:  Cullen,  Seddon  and  Willcocks  (2005)  

SOLUTION:  invest  time  to  communicate  and  align  with  your  partner  upfront  and  along  the  way  

CHALLENGE  #3:  LOW  QUALITY  

PROCESSES  

MEASURES  

PEOPLE  

TOOLS  

Use  quantitative  metrics  (Key  Performance  Indicators)  to  measure  the  quality  of  the  output  delivered  by  your  partner.  

Formalize  your  processes  and  tasks.  Document  them  so  they  can  become  the  base  of  your  requirements  and  RFP  and  can  be  communicated  to  your  partner.  This  is  usually  a  difIicult  task  for  small  and  mid-­‐sized  companies.  Solutions  exist.    

Get  to  know  the  people  you  work  with.  Ensure  that  your  team  has  the  opportunity  to  get  to  know  their  counterparts  at  the  partner’s  location(s);  this  will  increase  engagement  and  performance  on  both  sides.      

Use  monitoring  and  management  software,  and  other  tools  to  keep  track  of  your  and  your  partner’s  progress    

QUALITY    

Enable  and  encourage  (even  though  it  means  investing)  continuous  employee  development  &  trainings  both  in  Europe  and  abroad  .    

Source:  Eurosia™  team  experience;  Aron,  R.,  Singh,  J.  (2005);  “Getting  Offshoring  Right”  (Harvard  Business  Review)    

SOLUTION:  deIine  your  requirements  &  standards  well,  then  measure,  reIine,  and  keep  controlling  

CHALLENGE  #4:  INTELLECTUAL  PROPERTY  (IP)  

Eurosia™  Engineering  Insight  #2  

….and  refer  to  our  speciIic  upcoming  Eurosia™  Engineering  Insight:  “WHICH  ACTIVITIES  TO  OUTSOURCE,  WHICH  ONES  TO  KEEP  INTERNALLY”  

SOLUTION:  keep  your  core  Research  &  Development  internally  in  Europe…  

CHALLENGE  #5:  FEELING  OF  LOSING  CONTROL    

SOLUTION:  shift  from  doing  &  controlling  tasks  to  measuring  &  controlling  partner’s  output  

…  and  keep  a  plan  B  in  your  back  pocket  to  keep  some  smart  pressure  on  your  partner  

CHALLENGE  #6:  HIDDEN  COSTS  

Eurosia™  Engineering  Insight  #2  

Low  Hourly  Rates  

Travel  Costs  

Risk  Management  Cost  

Productivity    Losses  (at  beginning)  

Cost  of  Transition  

Cost  of  Management  Overhead  

There  are  hidden  costs  to  be  aware  of  and  account  for…  

…  still,  90%  of  outsourcing  initiatives  are  deemed  highly  efIicient  at  reducing  operating  costs  

Source:  HfS  Research  2013,  n=  399  Buy-­‐side  Enterprises    

CHALLENGE  #7:  RESISTANCE  TO  CHANGE    

Eurosia™  Engineering  Insight  #2  

Guess  who  is  the  only  person  who  likes  change…  

…  a  wet  baby  

Resistance  to  change  from  team  members  is  one  of  the  greatest  challenges  you  may  face…  

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This  topic  will  be  addressed  in  our  next  Eurosia™  Engineering  Insight:    

SUBCONTRACTING  ENGINEERING  SERVICES:  HOW  DO  SUCCESSFUL  MANAGERS  DO?  

E U R O P E A N S E R V I C E . A S I A N P R I C E

TM

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