Tag Archives: Time Zone

How Do You Handle Demands for Faster Delivery? Four Options

Situation: A company’s clients are demanding increasingly faster response times, particularly in areas that historically have not been considered mission critical. Clients also want faster answers to technical questions. Is this a common occurrence, and would you adjust pricing in response? How do you handle demands for faster delivery?

Advice from the CEOs:

  • If clients are demanding faster delivery, it’s entirely reasonable to tier your rates for different levels of service and delivery. Create cost / ROI breakdowns for different options, and let your clients make a business decision about the level of responsiveness that they need.
  • When brining on new clients, do a worst case down time analysis for the prospect as part of your evaluation process, then provide price options and let the prospect evaluate what is important to them. This is similar to different price / deductible levels with health or car insurance.
  • You will need to educate your current client base on what you are doing for them, and when they are reaching the upper levels of service provision under their current contract.
    • When you provide remote service, communicate what you have done.
      • Email individualized update reports to client contacts.
      • When you meet clients face to face, have a printout of service provided and toot your own horn about your service and delivery.
  • Be aware of the needs of clients who have distributed locations across time zones. A two-hour response time on the West Coast at 8:00 in the morning, translates to a half day for an East Coast location because they can’t call you until 11:00am Eastern time.

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How Do You Satisfy a Difficult Foreign Customer? Three Factors

Situation: A company has a long-term relationship with a Japanese distributor that is also an investor in the company. Due to time zone differences and language difficulties, communications are very difficult. This leads to significant cost overruns for the company. How do you satisfy a difficult foreign customer?

Advice from the CEOs:

  • In working with a difficult partner, it is critical to set expectations, establish ground rules and repeat these at the beginning of each conversation or teleconference until it is clear that both sides understand each other. Even at this point, these should be repeated and reinforced any time a new individual is participating in the conversation.
    • Do you want us to give you (a) our honest answer, or (b) do you want us to tell you what we think you want to hear? – They would be foolish to choose (b).
    • Preface each critical response with this choice to reinforce the agreement at the beginning of the meeting.
  • In a situation where you are losing money under a fixed price contract, you may have to have a “Come to Jesus” meeting. During this conversation, you want to understand and establish:
    • Whether this relationship is profitable for both of us, and
    • Whether this project is doable by each of us.
    • Usually this will result in a radical shift in the model.
    • If it does not they it is better for both if you part ways. You are unlikely to reconcile the situation.
  • The bottom line is to establish, mutually, whether you can satisfy your partner through your efforts. This is critical to your future with this customer.
    • If you cannot find an acceptable solution you must abandon the effort.
    • It makes no sense to take on business that is not profitable to you, even if the revenue is important to plan achievement.
    • At the current rate, you will not make up the loss in profitability through additional volume.

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Do You Expand Domestically or Off-Shore? Four Thoughts

Situation: A company is rapidly expanding and is considering the pros and cons of domestic versus off-shore expansion. One of the appeals of off-shore expansion is the availability of good talent at lower costs overseas. However there are appealing counterarguments for domestic expansion. What is your experience, and how would you advise this CEO?

Advice from the CEOs:

  • This is a challenging question. Based on others’ experience, success off-shoring depends on your ability to be disciplined and rigid in your design specs. If this is the case, then off-shoring can work. However, if either you or the partner changes the spec then delays and difficulties result. You have to make sure that the off-shore labor force possesses the skills that you require to successfully complete your projects and that your specs are sufficiently detailed to overcome challenges of language and understanding of usability.
    • Tightly specify each job that you want to have done off-shore, and develop performance metrics so that shortfalls will become obvious quickly.
    • Some large technology companies operate off-shore centers not to save costs, but because they actually find better talent overseas. India and China are producing excellent engineers, and given the size of the populations, the top percentile of talent can product a large number of talented people.
  • Some companies contract through off-shore entities, and tightly integrate the work of off-shore and domestic engineers. This is a perk for the off-shore engineers and helps to produce value.
    • One large company sends US Indian employees to India for 2-years stints to oversee their Indian operations.
  • Maintain strict hiring policies for your off-shore operations. Some companies have encountered difficulties when the managers of off-shore entities hired relatives because of family ties as opposed to talent or qualifications.
  • Over the past five years, the differential in pay for off-shore and domestic talent has shrunk. A large number of companies have found that domestic talent is easier to manage and in many cases is more productive. Further, there are no language challenges and time zone differences make working with domestic talent easier.

Key Words: Expansion, Domestic, Off-shore, Talent, Cost, Design, Spec, Skills, Integration, Hiring, Policy, Language, Time Zone

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