With so much interest in the opportunities afforded by virtual teams and international execution, one big question is just why do company’s and individuals undertake projects using multinational or international teams. There are a great number of drivers that influence the approach both positively and negatively. Some are quite obvious, others less so.
I have discussed a few of the most common reasons for international project delivery below, they are; access to skills, client pressures, local government pressures, cost and, globalisation of organisations. Many of these drivers overlap and while I have tried to cover them separately, there will be a substantial level of leakage from one to another.
- Access to skills – For many organisations, it is often extremely difficult to access the skills they need to perform the entire project scope in one single location. This may be driven by a shortage of skills in their home country, in the country the project is being delivered into or elsewhere in the project delivery cycle. Regardless of the location of the shortage of skills, these company’s must consequently execute some of their work away from their home base location, driving them to an international model.
- Client pressures – Where clients are from another country to the project execution organisation they may, for home country social or political reasons, or to satisfy a shareholder or stakeholder commitment, mandate that some of the project is executed in their home country. If this home country is also the country the project is being delivered into, this could have been a project necessity regardless of any client drivers. However, if the project is being delivered into a third location, the added complexity of the alternate location can cause unexpected consequences for all concerned.
- Local government pressures – many national or regional governments have mandated or advisory local content guidelines and targets for prospective projects to strive to achieve. Such targets can include the requirement to execute portions of many phases of projects in the host country. There are a number of ways in which the local content may be calculated, either on money spent, orders placed, hours executed, etc. All these criteria will drive projects to explore options and opportunities to put pieces of the project into the host country or region. These drivers can become problematic for projects when the local workforce or industry does not offer the skills or services required by the project, in which case the project must either try to support the local capabilities in developing the required skills, or devise ways of satisfying the local content requirements through other methods and execute the rest of the work in more suitably skilled and resourced regions.
- Cost – Many modern projects are costed on quite marginal figures that drive them to seek the lowest costs for both skilled labour and manufacturing. For many organisations, this involves sending portions of the project into developing nations where the cost of labour is typically lower than in the more costly developed countries. This offshoring of work can include everything from design centres, manufacturing, prototype development, software production etc. These are all activities that, in past times, would have been performed in the company’s home country but changing costs have driven the work elsewhere.
- Globalisation of organisations – Many companies are now serving global markets and opting to distribute many phases of their operations and projects into the country’s in which they operate. This serves a number of purposes for the organisations it allows them; to balance project costs across their global operations; bring different perspectives to their project cycles and; customise their project portfolio to best address their world wide customer base rather than focusing on the one they would have traditionally served in their home country.
Simply put, many nations where complex projects would typically have been executed are now too expensive and incapable of fielding teams large enough and with all the skills needed to undertake the volumes of work they would a few years ago. To remain competitive and perform the work, organisations based in these countries are now looking to other countries where the volume, skills and cost of labour are more conducive to delivering the volume of work required. This is then driving personnel in countries on both sides of the equation to need to become better at understanding one another and working cooperatively. They now need each other equally, so the days of one dictating terms and cultures to another are, in my opinion, well and truly gone, which is a good thing for everyone.
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