Organizational Culture fit as a driver in IT outsourcing

Finding a skillful partner and crafting an agreement is just the beginning of an outsourcing journey. It’s what comes next that counts the most for project success. Bringing people and teams together is the heart of the entire process. It’s not just technical knowledge that influences the business relationship, but also the outsourced company’s culture and flexibility.

From experience, we have learned that a successful outsourcing relationship is built on adaptability and flexibility. As a professional supplier, we have developed an open organizational culture that can fit with every client’s needs, whether they are  a global bank or just a start-up. That means we are able to adapt services, workflows, and communication to any client’s organizational matrix. Besides skills, we  deliver people with the proper mindset and collaboration culture to  achieve the best fit with the customer’s team.

Is culture fit a real problem?

A simple google search can show you how tricky cross-cultural business relationships can be. There are stories about several factors acting as barriers to business success: class differences, sexism, language barriers, poor time management, laborious decision making processes, and so on.

Some even say that in Western societies, people think about time as linear, value the future more than the past, and make decisions faster. On the other hand, in Asian countries,  people perceive time as cyclical and consider that similar opportunities will come again. So it will be difficult for a Western manager to understand why an Asian partner needs more time to make business decisions.

A strategic outsourcing partner is like an extension of the client’s company, so cultural compatibility is of paramount importance. A few years ago, the UK National Outsourcing Association conducted a study on Cultural Differences in Outsourcing. The final report concluded that companies looking for an outsourcing partner should never underestimate the importance of a good business and social-cultural fit (behavior, communication, openness). Respondents who deemed their outsourcing project successful rate organization culture 3.71 out of 5, and clients who were less successful rate it only 2.69.  To clarify, when using the term “organizational culture” they do not mean the formal written content describing a company’s mission, values, and policies, but rather the informal organizational culture that consists of  communication, trust, the well-being of employees, transparency, and authenticity.

Nurturing a productive outsourcing relationship takes time. The first step is building trust and effective communication. Unfortunately, most of the companies involved in outsourcing limit their personnel training to all aspects concerned with the product and process, failing to  address issues pertaining to mindset, cultural values, pride, motivation etc. In the long run, problems stemming from cultural mismatch may cause people to become less committed to their job,lower their productivity rates, or even resign.

How to avoid organizational cultural mismatch

A lot of managers simply believe that establishing business rules and written policies ensure a successful outsourcing relationship. That does not suffice. What actually works is finding a partner that fosters an open organizational culture, values people’s beliefs, appreciates diversity, and demonstrates  flexibility.

Some analysts say that the following aspects are critical for a good organizational culture alignment:

• Ensure clear and polite communication;

• Learn about different cultures;

• Work towards accommodating cultural differences;

• Share knowledge;

• Employ diversity training.

While that’s good to know, these aspects will be easier to implement in some parts of the world and more difficult in others. For example, there is an obvious cultural fit between Eastern Europe, North America, and Western Europe. The lifestyle, social values, business etiquette, and mentality are similar, and the people have good intercultural communication skills. That is due to the shared European heritage, and the high rate of tourism among the three regions for educational, recreational, or employment related purposes.  A lot of Romanians (especially those in the field of tech), have studied or worked in other EU countries or in the US.This is why they share the same business culture. During the last decade,a significant part of the Romanian IT industry  has worked for Western countries. According to Romanian Software and Services Industry Employers’ Association (ANIS) in 2019 software and IT service exports accounted for 80% of a 5.9 billion euro total turnover,(https://www.romania-insider.com/romania-it-market-volume-2019) with 95% of the clients coming from Europe and the US.

Even in Europe, organizational culture can differ from country to country.  This is why we make it a top priority to adapt our approach accordingly. British people value politeness and it is possible that requirements can come across as suggestions or recommendations to the unseasoned business partner.  Belgian people have a deeper respect for hierarchical structures and will not criticize a solution proposed by a manager. On the other hand, Dutch employees would challenge the manager‘s decision and propose alternatives. Danish and Swedish people are very organized, so business meetings are typically governed by a predefined agenda and there is very little talk outside agreed topics. In contrast to other Europeans, Danes and Swedes are direct communicators so for them it is important to  “Say what you mean and mean what you say“.

With all that in mind, in our quest for achieving an open organization culture we value:

• Trust – we always deliver on our promises;
• Communication – we always keep you up to speed with our latest developments;
• Cooperation – we work alongside our clients;
• Commitment – we go the extra mile;
• Transparency– we love honest conversations

So if you are looking for an outsourcing partner that will be able to understand and respect your organizational culture, feel free to contact us or subscribe to our newsletter.