1. Far Fewer Savings than Expected
One of the biggest risks associated with the offshore outsourcing of CAD conversion involves the inflated expectations that the internal organization has about how much the savings from offshore CAD conversion outsourcing will be. Unfortunately, many executives assume that outsourced labor will yield savings comparable to a person-to-person comparison (e.g., a full-time equivalent in India will cost 40% less)
without regard for the hidden costs and added internal management efforts and operation modifications required for outsourcing. In reality, many organizations save far less than they had anticipated with CAD outsourcing.
2. Lowered Accuracy and Performance
A significant risk of outsourcing the CAD conversion function is that the vendor may not be able to perform as promised. This may be as a result of language barriers, differing cultural expectations, delays in response due to time zone differences or lack of understanding of the work involved. For example, Although English is one official language in India, pronunciation, and accents can vary tremendously. In addition, cultural differences include religions, modes of dress, social activities, and even the way a question is answered. Most leading vendors have cultural education programs, but executives should not assume that cultural alignment will be insignificant or trivial.
3. Offshore Vendor Unfamiliar with US Government Oversight/Regulation
Most US organizations face various degrees of government regulation and oversight. While at first glance, this may not seem to be an issue when discussing CAD Conversion outsourcing, the issue of transparency is becoming more significant as requirements such as the USA PATRIOT Act and the Sarbanes-Oxley Act place greater burdens of accountability on all American corporations. So whether it’s a building code issue in a CAD drawing to required security measures for sensitive aircraft drawings, If the offshore vendor is not sensitive to industry-specific requirements and the vendor’s ability to: 1) comply with government regulations; and 2) provide sufficient “transparency” showing that it does comply and is thus accountable , then this could create legal ramifications for the US corporation.
4. Turnover of Key Personnel
Rapid growth among offshore CAD outsourcing vendors has created a dynamic labor market, especially in India. Key personnel is usually in demand for new, high-profile projects, or even at risk of being recruited by other offshore vendors. While offshore vendors will often quote overall turnover statistics that appear relatively low, the more important statistic to manage is the turnover of key personnel. Common turnover levels are in the 15%-20% range, and this usually refers to the most knowledgeable of the CAD specialists. The impact of high turnover can directly affect the quality of CAD conversion work.
5. Effect of Offshore Outsourcing on Americans’ Lives
Whatever the product or service, even CAD Conversion, if there is an effort to ship it outside America to cheaper labor, then the effects of this are hurting many aspects of Americans’ industrial and personal lives. It doesn’t matter what you are doing, whether you manufacture low- to high-tech products, build houses, or create the next generation of microprocessor chips: Outsourcing is affecting American industry and it will only become a larger issue.