Building Efficient Distributed Teams with a Nearshore Partner

March 1, 2016 White Papers

You will learn:

  • Risk mitigation strategies for successful work with distributed teams
  • Best practices in nearshore team management
  • How to instil rich communication practices in your process

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Building distributed teams is often a necessity in today’s fast, globalized economy. When a company faces talent shortage, tough deadlines for product release, and requires cost optimization, distributed teams are the best option to achieve all of the objectives. Indeed, in majority of cases distributed teams are the only answer, or there is a very good chance that a project won’t happen at all. While it is often the best choice, managing distributed teams can be its own challenge. Chiefly, it requires early investment in communication and development of a systematic communication process. Despite the early investment, working with distributed teams with a process designed to mitigate the risks will lead to more efficiency and better results.

Risks of distributed teams: Causes, effects and mitigation strategies

One of the biggest deterrents of working with a distributed team is limited communication. Lack of proper communication often results in low quality products, management overhead and inefficient teams with overall reduced business value. That is an unacceptable result for executives whose primary goal when outsourcing is to derive more value and optimize efficiency and cost.

The issue of the risks of distributed teams has been around for quite some time. The interest in how to properly manage a global team mirrors the growth of the outsourcing industry – as executives found themselves working with teams across the world, the need for different kind of management increased.

The topic gained recognition in 1997, and really took off in 2005. As the global labor market continues to grow, so does the need for properly managing distributed teams.

The biggest risks associated with distributed teams can be roughly categorized into three categories: geographical distance, socio-cultural distance and temporal distance.

Geographical distance risk

Distributed teams are separated by physical distance, which causes certain challenges when managing a team. Most notably, the effort to communicate must be increased. Since effort has to increase, the quality and frequency may decrease. Second, people become more dependent on information and communication tools. Face to face meeting time is naturally reduced, as traveling to meet teams is inefficient and often expensive. Finally, there is a lack of group awareness: who is really on the team, who is working on what, and so on.

Typical examples of a geographical distance risks are lack of face-to-face contact and lack of trust. Lack of face to face contact is caused by having limited availability to the actual remote site: it is hard to know whether the work is actually being done, when one isn’t there to see it. The second cause is traveling costs. If the reason for outsourcing was to reduce costs, then constant travel to the site could erode any potential gains (though some travel will actually maximize business value). This is the number one risk when working with distributed teams, because it can lead to lack of trust, reduced personal investment and reduction in informal communication – all of which can reduce the quality of the end result.

Another geographical distance risk is lack of trust. Having limited knowledge of the people and the space means that there is less trust between team members and managers. Trust is usually created naturally in a workplace, but in a distributed setting, it must be created consciously. The causes for lack of trust are limited visibility of remote site, unpredictable communication, and lack of interpersonal or quality relationships within the team. This can lead to relationship break down, not having a sense of a team and difficulty coordinating tasks.

The best way to mitigate geographical distance risks is by:

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This article was originally published in the German Outsourcing Association’s Outsourcing Journal: Nearshoring Edition.

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