Offshore engineering and cultural differences

April 21, 2014
When in southeast Asia, do as the southeast Asians do.

When working with offshore engineering (OSE) teams in southeast Asia to assist U.S. engineering, the keys to success are to understand the team and define the project as much as possible. The result is clarity, with a reduction of ambiguity and thus confusion that would otherwise arise from cultural barriers or lack of experience. Assessing the level of detail needed in the project helps to determine whether it is appropriate to hand off to an OSE team.

A shift, however, is beginning. Rather than being a way merely to save money on U.S. projects, OSE teams offer the means to truly expand globally as contractors start to understand what that expansion means in a particular area.

Thus, to be successful, working with OSE teams on projects constructed in their own countries will require even more depth in:

  • understanding the team and its cultural differences and field experience
  • assessing the level of detail required
  • providing sufficient detail to correctly complete the job.

Understanding the team

The No. 1 concern in understanding an OSE team is cultural differences. It is hazardous to assume that everybody everywhere works the same as people do in the United States. Increasing interaction with China, India, Malaysia, and other southeast Asian countries will likely make the differences more apparent. As a result, a goal as simple as completing a project phase by the end of the month may have a very different interpretation in another country.

Dealing with hierarchy is another major difference. Subordinates in other countries are careful about asking questions, for example, because they don’t want the boss to look as if he or she failed to provide the right information in the first place. On one project in India, for example, a drawing was missing a dimension and was marked to show that that dimension needed to be added. The staff in India drew a line showing a dimension, but copied it exactly as was requested without numbering it. The difference in understanding arose because culturally teams in India are expected to do exactly what they are asked to do and not make their own decisions.

Cultural differences greatly impact how the team receives information and, therefore, how it’s provided. The U.S. leader is in charge, so the OSE team won’t do anything they deem disrespectful. They will avoid putting the leader in a position of appearing not to have done the job correctly, even if the leader left out a piece of important information. This is changing as teams in India and other southeast Asian countries are becoming autonomous, but progress will require time.

Cultural differences impact communication in other ways, too. An example involving ground compacting for a new building in India demonstrates this. The drawings provided showed the proper specifications. To complete the job in the United States, dump trucks, bulldozers, and compactors would have been brought in to level the soil to the required degree. In this particular instance, the job was approached with wheelbarrows to carry out soil, which was then manually compacted with handheld power tampers. The lack of cultural understanding had a costly result. Through partnering with the client, SSOE was made aware of this situation, to help with future offshore projects.

Lack of field experience

A high percentage of offshore staffing is well-educated, with many holding master's degrees in engineering. This makes them very experienced in running theoretical calculations. The shortcoming with a lot of time spent in school, however, is that these workers often have much less experience in the field. As a result, they potentially have less understanding of a project's real impact or demands.

In addition, the frequent high turnover rate within OSE teams can also lead to a lack of available experience. Turnover is increasing as southeast Asia grows into a more competitive market and higher pay rates are available. The staff on the job one day may not be the same the next, and it can’t be assumed that all team members are current on project information. Those with field experience may ask the right questions, but those lacking the necessary experience more likely will not know how to request needed information, leading to issues.

The building with the settling foundation is also a good example of the problems that can develop when a team lacks field experience. It was assumed there were construction managers on the work site, as there would be in the United States, who would know about soil compaction and the steps required. In reality, the team on the ground didn’t have the same experience as their U.S. counterparts. Unaware of this, the U.S. engineers provided a North American level of detail, assuming the construction manager was knowledgeable of normally accepted practices in the United States.

Even working with teams that have been used before, it’s important to have an open discussion about the staffing plan. If a single point person is offered, find out what kind of support he will have and whether his team will be available throughout construction. If a single point person is not offered, it’s critical to get one. When a project’s leadership is changing frequently, costs can quickly escalate and end up tallying as much as if a U.S. company itself undertook the job.

Assessing the level of detail

The amount of detail needed determines the return on investment (ROI) of working with an OSE team. When preparing details to send to get the work done, think of the OSE team’s viewpoint, having never seen the site, not having pictures, and not knowing the client. Give the team permission to ask questions, in order to determine the necessary level of detail. Ask them whether they have everything they need and what else you can provide to make the job successful. Once you understand the OSE team and its skill set, judging a project's value is totally situational. If a detailed project can be sent over with no special problems and no extra effort, ROI will be high. When a site job in the United States is a quick and simple $20,000 project, but takes $10,000 to detail it, take pictures, get clarifications, provide field work, and prepare laser scans and background to send overseas, 50% of the total value will have been invested and the ROI will be low.

In judging ROI, obvious offshore projects include the creation of 3D models, greenfield additions, detailing red to black, and anything that does not require a lot of explanation. Conversely, any project done on the fly or in an unpredictable environment isn’t going to be cost-effective. If the detail required for the OSE is bordering on the design level, after one or two series of changes, the ROI is a loss.

For example, drawings were provided for an unloading area, also in India, but the unloading areas varied. The project called for additional unloading spots to four existing spots placed in this order from left to right: two that were two years old; one was 15 years old; and one seven years old. The new spots were to be added to the right of the seven-year-old spot. Direction had been provided to duplicate an existing unloading spot for the design of the new spots. Instead of duplicating design details from one of the newest spots, the offshore team duplicated the spot nearest to the new site, the seven-year-old spot. By the time the design package arrived in the United States, the schedule didn’t permit it to be returned to India for revision. A U.S. engineer had to be hired. Because one or two details were missing from the original direction, the project doubled in cost. With sufficiently detailed background, the OSE team could have based the design on the newest area. The ROI should have been high, but the result was blown budgets and schedules due to lack of necessary detail.

Again, the investment in what it takes to prepare determines ROI. If the cost is heading toward 50% of investment to send a package over, it will only be worthwhile if looking to train a team overseas. If you understand the team, such an investment is for long-term partnering. The first time working together might be painful, but the second will better, and by the third time there will be savings. A high investment is only worthwhile if a partnership is being established with a consistent team. 

Providing detail to the team

Being literal and very detailed in what needs to be done with a project is critical. The process can be very time-consuming, so it’s important to be selective and look at the amount of time needed to fully explain a project versus doing the project in the United States.

The expansion of a tank farm demonstrates how literally a situation needs to be described. The initial information given included drawings showing all the fiberglass tanks and the platforms the client wanted to put on the tanks after they were installed. However, the drawings did not show the conduit around each tank.

John Stauffer, PMP, is a senior project manager at SSOE Group, a global engineering, procurement, and construction management firm, in Lima, Ohio. With 23 years of experience, Stauffer specializes in custom equipment and commercial modification. He can be reached at (419) 222-7794 or [email protected].

Normally a contractor would want to know everything going on around the tanks, including platforms, bridges, and interferences. Instead, the OSE team poured a foundation and installed the tank, but because they didn’t know there would be any existing obstruction — the conduit — they designed platforms that cut straight through the conduit.

In this case, the team did exactly what was asked to install the tanks and build a good foundation, but they didn’t consider what was around it or how to replace the valve at the top. The situation went from the client’s needing to be more detailed to the OSE team’s lack of understanding the necessary maintenance and construction. By having a better idea of the team's skill sets and experience and the level of detail needed, the client could have avoided these problems from the start.

In looking at working with overseas teams, hiring an experienced liaison can help assess a potential partner and train people about cultural differences. A consultant can help the U.S. team understand what needs to be done in the long term and how to determine ROI, along with the value of working with an offshore team.

With the increasingly global economy, the shift continues from how to use offshore to make money in the United States to understanding offshore and truly going global in those regions. While offshore work started as a way to save money because of labor rates, now economies overseas are growing so fast that it’s becoming a better way to invest in those countries and figure out how to expand and work there. In all instances, being culturally considerate and aware is essential.

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