IT outsourcing projects: UK vs USA
Itransition is a seasoned resident of the software outsourcing market. With projects completed for more than 800 customers from over 30 countries, the company has delivered
custom software development to businesses in IT, energy, finance, retail and many more verticals.
Based on our portfolio, we are sharing Itransition’s experience with clients from the UK and the US — the two largest consumers of IT outsourcing services. Itransition has been working with clients from both countries since the company’s foundation. Now we are well-equipped to tell the difference between these two client segments and leverage this knowledge to help you manage your clients’ expectations effectively.
Let’s take a closer look at how UK outsourcing clients differ from those in the US and how to keep long-term and mutually beneficial business with both groups.
IT outsourcing profile: US clients
Typical clients from the US come from companies of different calibers — startups, high-tech companies, and multinational corporations. As a rule, the vendor is approached by a top management representative, such as a member of the board or a business owner.
Generally, when a US client makes a decision to find an outsourcing partner, it usually means they seek a long-term relationship. As they have a very positive attitude to outsourcing based on extensive prior experience, they are ready to invest big into a project and add even more when needed. However, they leave their partners little room for error. If there are any violations of an SLA, they won’t think twice to part ways in spite of the vendor’s successful track record throughout the project.
As for the project specifics, US clients describe their vision and needs broadly,
the way the company owner sees them. The decision regarding a potential cooperation is made swiftly — it usually takes about 90 days from an initial inquiry to signing the deal.
IT outsourcing profile: UK clients
When it comes to clients from the UK, we are usually approached by companies from the public sector, independent software vendors, and multinational corporations. The main difference from the US is that an initial inquiry comes from a personal assistant or a functional manager, and it takes much longer to make a decision regarding the cooperation — up to 150 days from an inquiry to signing the deal. Startup movement is also quite strong in the UK. And in these cases we deal with co-founders, typically, who are quite keen on building a relationship as they have less tolerance for failure.
UK companies also have a positive attitude to outsourcing, but they favor those vendors that have a representative office in the UK so that they could visit the vendor often. Otherwise, your chances to establish a long-term partnership are much lower. The interest in long-term relationships usually grows when the vendor is able to solve initial challenges effectively. However, even if there are some unsatisfactory issues, the vendor can be given a second chance if the overall performance has been otherwise excellent.
The project’s vision is usually narrower, and project requirements are more technical and issue-oriented. The goal is to solve a particular issue here and now, like automating a process, engineering a particular feature, developing a module, and so on. For this reason, budgets are much smaller compared to US outsourcing projects. The entire sum is usually broken down into installments.
5 key recommendations
Based on these client profiles, we’ve drawn up general recommendations that can help alleviate cultural differences and build successful relationships.
Give it more time with UK clients
UK clients usually take their time before signing a contract, so you need to account for it in your planning. Besides, consider setting up either a representative office or a fully functional operational center in the United Kingdom.
Work your way up to meet top-level UK business stakeholders
If you want to approach the most influential decision-maker on your UK project, you’ll need to prove your ability to deliver on your promises first. Only in this case you will get an opportunity to discuss your partnership with business owners or members of the board.
Expect more freedom and responsibility on the US projects
When working with US clients, you often get the set budget right away, even prior to having a detailed action plan, which you’re likely to be responsible for drawing up in the first place. With clients from the UK, you are bound to work with a smaller budget yet with a clearly defined roadmap broken down into iterations.
Bring your A-game with US partners
US outsourcing projects are like sprint competitions, while UK projects are more like a marathon. With US partners you have to start very fast and spend a lot of energy initially, with no sign of slowing down throughout the project. “You are only as good as your last performance,” Americans like to say, and they do business by this rule.
In the US, your service is treated more like a commodity than a partnership, at least at the beginning of cooperation. No matter how well you perform, you may often feel you are replaceable, so the pressure can get rather intense.
UK clients’ loyalty is forever
Even though initially you have to prove yourself in action to UK partners, if you do gain their trust you can be sure to continue the relationship and become a long-term collaborator.
The bottom line
It’s impossible to bottle the national peculiarities of UK and US IT outsourcing projects into a single infographic or a blog post. Still, this brief comparative study is a good starting point for every software development vendor who wants to understand how to approach these two cultures most effectively and reach mutual understanding.