What Makes Pakistan The Best Outsourcing Hub? Best Practices You Might Not Know About
The following is an interview conducted by an Amsterdam-based startup blog:
Our interviewee today is outsourcing expert Ali Zaidi, the founder and CEO of ZEPCOM, a technology based services and consulting firm. Ali has helped ZEPCOM grow from an early stage startup to an established provider of E-Business Consulting Services and Tech-Based Solutions which help improve business efficiency.
At ZEPCOM he is also actively involved in building, growing and investing in startups that have a potential for growth and an ability to generate traction. He is currently working on startups that are focused on mobile, social gaming, crowd funding and big data.
You have been in the offshoring industry for the past 7 years. Please give us a little background about yourself?
I have been in this industry since 2008 when I started my company (ZEPCOM) while still in college. Over the years, our company has been involved in providing IT outsourcing services, consultancy and project management services to clients across the globe. We have worked across many domains including custom enterprise software applications, e-commerce, mobile, digital strategy and corporate intranets. Along with this, I am actively involved with startups in the local e-retail, discovery and mobile payments market-spaces, both as an investor and as a team member. I also undertake consulting assignments focusing on remote workforce management and change management domains.
Your development office is in Pakistan. It’s not the most common choice. Tell us what makes Pakistan attractive as a destination?
One of the most important factors that made Pakistan an ideal destination for us and our clients was the considerably less competitive market dynamics when it came to going after a tier-1 workforce. Pakistan’s IT industry is not as robust and developed compared to other Asian IT outsourcing destinations however the country still produces a significant number of STEM graduates both from local and international universities and colleges.
Compared to other offshore locations, there are limited job opportunities available in Pakistan’s IT industry. This makes it easier for mid-market service providers like us and our clients to attract top level engineers with a solid intellect, sound problem-solving skills, and great communication skills. Some of them have their education from top tech schools in North America, Europe, and Australia.
In other outsourcing destinations the top level talent usually ends up with larger global corporations having delivery centers in those countries. The ones that end up with mid-market providers are always difficult to retain as tier-1 companies keep attracting them. In Pakistan, it is not that difficult, and we have managed to hire and retain high-quality talent that is at par with high-quality engineers anywhere in the world.
Another factor that adds value is the English accents that most Pakistanis have been able to adopt, and it is not as thick as some of the other destinations. This could be a subjective observation, but we have found this to be the case.
Because of less competition in the talent market we have been able to hire engineers and retain them while having them work during the evening shift i.e. 5:00 p.m. — 2:00 a.m. PKT (GMT+5). This duration overlaps completely with the working hours of our North American clients. Our engineers have chosen to work during the late shift due to the growth and exposure facilities we offer as a preferred employer in the market-space. Another factor that has worked to our advantage is the cultural attitude amongst our target employees towards their work.
A lot of young, educated Pakistanis feel that they miss out on a lot of growth opportunities because their country is not a top business destination. We offer our talent a chance to work with international clients in a global work environment, and they take it as an opportunity to prove themselves individually and also collectively. They want to give their best and as a return some of our engineers have become very important team members for our clients’ teams and have built strong relationships with them based on friendship and trust. It is not uncommon for our clients and their team to exchange gifts, greetings and a laugh now and then.
Having said all that, yes Pakistan as a destination has many challenges that need working around. Over the last 5 years, we as a team have built systems for our cultural development — investing in infrastructure, mapping out risk management protocols and building a management team that knows how to deliver.
You have a collaboration with an American offshoring provider. Can you give us some background on that?
Sure. We have been working as a white-label partner for a top American offshore services provider for a few years now. We own and operate the offshore software delivery centers in Pakistan for them. We are responsible for HR Management (Including Recruitment, HR Operations, Training, and Development), Technical Leadership, Infrastructure Management and Support Functions. All software engineers, technical team leads, IT & network support teams, HR teams and support teams are based in our service centers in Pakistan. Whereas all the client relationship, sales, marketing and project management teams are based in the US in our partner firms office.
The relationship has been great all this time, and we have grown more than 400% since we started. We had to work very hard to get where we are today, but we have managed to break the code for an effective IT outsourcing relationship. We have built our model on cultural understanding, translating it into an effective delivery model that works for the many client-developer relationships we manage to ensure a 98% client satisfaction rating.
What are the silver bullets for a US — Pakistan collaboration?
The most important thing would be to build trust between the American team and their Pakistani augmented team. Treating each other with respect, keeping to your commitments and understanding cultural differences helps build this trust. Once a trust is built, the sky is the limit for any relationship.
Cultural understanding needs special emphasis in any cross-cultural management situation. We have invested time and effort heavily over the years in achieving that. Our corporate communications have helped our clients understand the Pakistani cultural dynamics whereas we have initiated many activities within the Pakistani team to help them understand the American and Western culture better. Regular visits for developers to meet and work on-site with their American team helps a lot too. We look for Pakistani youth in their 20’s and 30’s to be our software engineers and in this age demographic we have found many similarities between Pakistani and Americans by way of pop culture.
You will often find our American clients and their Pakistani software engineers talking about the latest Game of Thrones episode, the latest Leonardo Di Caprio movie or the latest Beyoncé hit single and how much they love it. Our key team members also visit international exhibitions and conferences like Cebit and IAOP summit to get industry exposure that helps them gain a broader perspective of the industry and its professionals.
Other than that, it helps having an American client liaison team in the U.S. which acts as the bridge between the American client and the Pakistani team. This has been extremely beneficial for us, and I would count it as another silver bullet.
What would you say are the 3 biggest cultural differences between the US and Pakistan and how to overcome them in a collaboration?
I would rate the following as the 3 biggest cultural differences
Americans are very strict on working time management. It can often be said of American business meetings or shift schedules that if you’re on time, you’re late. Being early and prompt is important to an American business relationship. But not all international business cultures are like this with time management, and when outsourcing with many countries, this can cause cultural clashing and disagreements. So is the case in Pakistani culture, but we have figured out a 2-step hack for this.
Firstly, we look for individuals who have prior experience working in American markets or have studied at an American or a comparable location; these employees will already understand and easily adapt to this method of time management. For those who do not have experience, it’s important to explain why it’s important to be on time and be prompt, particularly in terms that are relatable to the other working country. Secondly, we help instill a sense of pride in keeping up with any difficult time demands by rewarding those individuals for making extra efforts to do so.
Gone are the days when offshore providers had to work intensively on improving English language fluency amongst their workers. With all formal education taking place with English as the medium of instruction, most of the employees have working level fluency that gets improved when they communicate in an actual business scenario with their clients. However, there are still a lot of gaps when it comes to communication etiquettes between the American and Pakistani culture and it is important that the offshore team is trained to reduce this gap.
The first of such etiquettes would be that Americans are very upfront with their communication. They will not hide concerns about things they are not clear upon. Pakistanis tend to not be as up-front and at times avoid asking questions that they feel are elementary concerns, and asking them would be embarrassing. However not asking questions at the right time can affect productivity and increase costs.
Another cultural difference in communication is with commitments. Sometimes American clients can be demanding and ask for tough requirements to be met on a tight deadline. But before finalizing any deliverables they ask their offshore team members if this is workable. Due to a cultural mismatch, Pakistani developers commit to such tight deadlines even when they are not realistic and think that they will work beyond their means/skills and be able to deliver. In the end, they are unable to meet the deadline even though they worked to their optimum level; it is only because of setting unrealistic expectations that they end up under-delivering.
In order to avoid such problems, the team needs to be trained well on the importance of being upfront with questions, discontent or any issues that could hamper future results. Also, they must be made to understand the importance of setting the right expectations.
Family plays a major role in Pakistani culture and affects the professional life in more ways than it would in the American culture. For instance, if someone from our American office has their parent admitted to a hospital, they would not feel the need to visit them until after the work hours end. But in Pakistan an employee would feel the need to be present at the hospital or take their parent to the hospital to get them the needed medical attention even though it might not be an emergency scenario. This can get difficult for American clients to understand. However, some of it also has to do with the way health care system works in U.S. as compared to Pakistan where it can be quite challenging at times.
By default, Pakistanis have the tendency to put family first and then work, however, it also depends on the family background they have. This is one issue/cultural mismatch that needs attention. We have done that by educating our employees about the importance of letting the minimum external factors affect their work. And how such composure helps them grow professionally and in the longer term be more providing to their families. At the same time, we keep educating our clients about such practical realities that their developers might face in Pakistan which are difficult for them to relate to. So far, we have been quite successful in making the employees and the clients understand their parts, and this has helped reduce this cultural gap. Our HR team in Pakistan and the Client Liaison team in U.S. play a vital role in ironing out this factor.
How does a typical software development process look when you serve a US based client?
Most of our clients are following the agile methodology for managing their software development processes. The most common agile framework we are using is SCRUM. However, we have some enterprise level clients that have internal agile frameworks in place, and their teams are following those protocols. Most of our clients also have project management stateside and our developers, QAs and DBAs work as extensions to their agile teams. In some instances, our technical team leaders head up the projects as scrum masters, and there are also some clients that are working on traditional waterfall processes. Our offering means that clients can hire development teams with us that can adjust to their working methodologies. Generally speaking though, we would be most comfortable with SCRUM. In terms of communications, our clients have direct access to their teams and our client liaisons act as the cultural bridge between the two teams. We use all sorts of collaboration tools like GoToMeeting, Skype, Asana, Basecamp and Podio. We also use some custom tools that we have built internally for our enterprise level clients.
What advice would you give companies that plan to start an offshore collaboration?
My suggestions would be:
- Always focus on working with a team. Outsourcing requires a system to flourish, and individuals need support processes around them to be able to get the best out of them. A services company can help build that ecosystem that is important for a positive ROI.
- Focus on a hybrid team that has a local presence. This helps in communication and cultural understanding along with providing you legal protection since all contracts are in place with a firm that has a physical presence in your country.
- Try to have at least one in-person meeting with your key offshore stakeholders annually. This will help in fostering the relationship ten folds.
- Take advice from all experts in your eco-system but work with the provider/team that matches your wavelengths. Finding just the right match is key to a long term offshoring relationship.
- Invest time to understand your team and help them understand you. Again, beyond a transaction exchange of services and compensation, outsourcing is all about relationships. When you have a strong relationship, then you can scale your venture immeasurably.