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CAD outsourcing is big business today, with many off-shore firms offering low hourly rates. For many engineering firms, it’s tempting to see only the perceived cost savings associated with off-shore outsourcing without considering potential problems that CAD off-shore outsourcing can bring. In fact, inflated expectations about cost savings constitute much of the “buyer’s remorse” that engineering firms have once they engage in an outsourcing campaign. Often management assumes 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. In addition to looking realistically at the anticipated cost savings, there are other considerations that need to be addressed before your company sends CAD work overseas.
How Important are 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 management should not assume that cultural alignment will be insignificant or trivial.
Is the Offshore Vendor Able to Meet Industry Oversight and Regulation Requirements? Most U.S. organizations face various degrees of industry 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 or a required security measures for sensitive aircraft drawings the ultimate liability will be with the U.S. company that contracted for the outsourcing service. If the off-shore vendor is able to meet the industry-specific requirements, then this could create legal ramifications for the U.S. corporation.
Are you Ready to Deal with 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 off-shore vendors. While off-shore 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 work.
The low quoted prices of off-shore CAD outsourcing can be when all considerations and potential problems are taken into account. Often, there are U.S. based companies who are able to provide price quotes that are comparable to off-shore pricing and that eliminate the drawbacks of dealing with an off-shore company.