Case study: how TRW copes with culture clashes

Western companies new to outsourcing in India are often stunned by the problems that cultural differences can cause to their long-distance relationship. “The Indian culture is one in which they want to say everything is OK even when it obviously is not,” says Gregory Bryan, European IT director for TRW Automotive, a large automotive supplier.

TRW, the US engineering group, began working with Satyam Computing Services in 2000 after signing a five-year $200m contract, hailed at the time as the largest single order received by an Indian software outsourcing company. In 2002, TRW split into two and the contract was inherited by TRW Automotive. Last year, it awarded a new modified contract to Satyam for a further five years.

TRW Automotive has around 350 IT staff across Europe, although its largest presence is Germany, where its main data centre is located. These staff take care of TRW’s day-to-day IT operations while a dozen or so Satyam’s offshore workers are dedicated to TRW for specific projects, such as implementing a new enterprise resource planning (ERP) module or redesigning its website.

Mr Bryan says the technical skills of Satyam’s workers are excellent. They are particularly strong in SAP’s ERP software, which is almost an industry standard in Germany’s automotive industry. “They can compete with the Germans, who know SAP inside out,” he says.

They are also a lot cheaper. Mr Bryan says the cost of using software developers located offshore is between 30 per cent and 50 per cent less than if they were recruited to the payroll.

While India has become a punching bag for US IT workers fearful for their jobs, in Europe, the picture is more complex. It is costly to dismiss workers in countries such as Germany and France, so TRW was reluctant to recruit IT staff to undertake new projects. Using Satyam’s offshore workers, it gains access to a pool of skilled labour that is not just cheaper but can be turned on and off, according to demand.

Indian workers may win on flexibility, but Mr Bryan says they may not understandwhat the customer wants. But the problem gets hidden because Indian workers are taught that the customer is always right. “They will do exactly what you put in the [project] specifications, mistakes and all,” he says.

TRW adopted several measures to reduce the misunderstandings. First, it insisted that Satyam stationed an Indian worker “onshore” in Germany to act as a liaison across the cultural divide. Second, Satyam provided an Indian account manager to work alongside Mr Bryan. In addition, for every four Satyam workers that TRW contracts in India, Mr Bryan insists that there is an onshore employee to manage them.

These measures have helped smooth out the cultural differences. “The problems are almost non-existent now,” he says.

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