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Establishing and Managing Risk factors in Offshore Software Development

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Outsourcing software development is usually done with the intention of lowering the cost of a project. The decision to outsource is also taken to redirect and conserve the competent skills of a particular business, or to utilize the more efficient skills of the outsourced company, its technology, and its resources.

In outsourcing a software project, traditionally, the onsite company hands over the management and the day-to-day functions of the project to be developed to a company established offshore. The onsite and the offshore companies enter into a contractual agreement. This agreement provides the terms and conditions agreed between the two companies related to the transfer of services. By this agreement, the offshore company acquires from the onsite company the documentation of the project to be executed, along with transfer of people, assets, and other resources. Such project outsourcing usually includes:

1. Information Technology.
2. Human resources.
3. Facilities.
4. Real estate management.
5. Accounting.

There are many onsite companies who outsource customer support, and call center activities, such as, telemarketing, customer services, market research, manufacturing and engineering.

The decision to outsourcing a project is usually taken by the high level management of an organization, and at some instances, the decision requires to be endorsed by the Members of the Board. The contract entered into by the onsite and the offshore companies brings about a sort of divestiture of a particular business function, in this case software development, made by the onsite company to the one situated abroad. Once the decision is taken in the matter of outsourcing, the search for an offshore partner would start.

The most important criteria in setting milestones offshore software development is to take care of the risks involved. The management of risks should start at the very initial stage, and as such, there are several risk factors to be taken into account. Risk management is as follows:

➢ Take early actions on identifying the risks.
➢ Determine the ways to mitigate those risks.
➢ Decide on when to mitigate the risks.
➢ Assign responsibilities to your staff to manage the various risks.

Usually, the teams involved in software development are “can do” groups, and it is not advisable to talk to them about process failures. There will be likely resistance from such groups, and you would need to overcome this attitude of resistance. You would need to plan for contingencies and also identify potential risk areas. In establishing such a procedure, the approach will yield the following:

➢ You will have a prioritized listing of all the risk that you envisage.
➢ You will have estimation of the probability of each of the risks occurring.
➢ You will be able to gauge the potential impact of the risks as regards the project or company.
➢ Contingency plans.
➢ Assigning responsibilities to individuals or groups for managing risks.

Further to the above, the following would make your risk management more efficient, minimizing and resolving the risk factors as identified by you in your offshore software development project:

➢ The software development life-cycle (SLDC) should be well defined between you and your offshore partner, remembering that SLDC is not only a project management tool, but also a risk management tool as well. Establishing the development life-cycle enables both the sides to set the time of completion of the project, and identify quality goals, deliverables and key milestones.

➢ Two project managers need to be identified, each from both the sides, who will be responsible to maintain the process as laid down in SLDC.

➢ For the critical areas in the project, you would need to set up the groundwork for “critical path management”, and front end load. This needs to be established as much as possible, for the critical path as identified in the project, becomes a crucial factor.

➢ As you define the milestones, you would need to define perceptive goals for each one of them. If this task is taken at the end, there could be drastic set back in the whole process of the development activity.

➢ You would need to plan for any deviations that can occur in the process of development. This is an important task, which allows you and your offshore team to highlight deviations, track the deviation properties, and learn from it.

➢ It is important that IP protection is in place and is mentioned in the contract drawn up between you and your offshore partner. When making a decision to outsource your software development, this is one important factor to be taken into that decision.

➢ The implementation of the enactment and enforcement of IP laws are different in different countries, and even if you adopt US related laws, enforcement still becomes difficult.

➢ Effective business relation and partnering would be the best way to mitigate the IP enforcement and enactment law. This could be done by effective maintenance of disciplines and auditing features.


How to Implement Agile Offshore Development

Development of software is always a team effort and is best accomplished with the teams working close to each other. The discussions that take place amongst the teams in real time, moves the project forward to its implementation. However, the practice of relying on Agile offshore development has brought about a powerful marriage between the repeated rapid processes, and multiple offshore engineering teams, the combination of which is marked with improvement of market response, its trends, and customer requirements. In here, there are suggestions as to how you can manage this collaborative process across the length and breadth of 8,000 miles that separates the Scrum teams of the multiple shores.

Agile methodologies such as XP, Scrum and DSDM have been adapted by the extended teams of successful global organizations, thus improving their customer needs and time to market. In the process, the organizations gain faster experience of transfer, training, transition planning, goal setting, governance, including the method of reviews which are necessary to achieve results. Deployment of Agile development methodologies in multi offshore environment can be challenging, and research has shown that with the required modifications, the adaptation of the development process in multi-locations and time zones, offshore engineering has been able to deliver quality and productivity compared to the established Agile teams in the US, and that too in just three months. This achievement includes reduced calendar time in incorporating new features, feedback from the early stage of development, along with the ability to make critical course corrections.

Agile methodologies are a new process adapted in today’s software development processes and practices, which introduce the changes in requirements by delivering the software in small releases. This has kept high the customers’ confidence, who can now relate their business requirement changes much faster. Agile methodologies have introduced a new set of software development processes and practices, which provide requirements change through delivery of the software in multiple modular releases. This increases the confidence of the client and enables them to relate any of their requirements of business changes much faster. The global economic situation has changed software development strategies, and the larger IT organizations are changing over to offshore development at a much faster rate.

In an offshore development process it is not necessary for the offshore and onshore developers to be in constant touch and communicate regarding the progress of the development of the project, and its specific feature or function. To give you an example, it is a waste of time for the onshore and offshore developers to check the same codes in the same section of the code repository, and eventually affect the work by checking each other’s code. With the offshore team having competent self-sufficient business analysts, programmers, QA staff, and technical writers the work can be conducted indecently by them without the necessity of much communication between the offshore on onshore developers.

The important thing in any team work is the interpersonal relationships within that team. With the Scrum teams distributed throughout the US, and the offshore locations, there are few interpersonal working understandings between the teams with few or none live contacts between them. This can invariably affect the software development progress in the quality of its production, and there could be questionable deliverables. To solve this situation, basic team building exercises need to be taken up. In doing this, the offshore Scrum team could be sent to the US for few weeks, where they can observe the dynamics and other typical working characteristics of the US teams situated at different places, and this could help in building the much wanted working relationship between the Scrum teams. In practice, it is found that a US based engineer visiting India every two months, and inter-acting with the offshore team in India. There-after, a tram of Indian engineers is lead to visit the US every six months to interact with the team members in the US. This brings about an understanding between the two teams, in working relationship and from a cultural and morale-building perspective as well.


Good and Bad Week for Offshore Software Development

At first, I considered it a bad week for my offshore software development efforts. But, then after further thought, it was actually quite positive.

As mentioned before, I find it efficient and cost effective to offshore software development work when the deliverable is clearly defined. This past week, projects I’ve been working on had some very specialized functionality requirements. I won’t bore you with both sets of requirements. One of the requirements involved translating a HTML to a differnet structured format.

I turned to RentACoder a coder for both projects and found what I considered competent developers within 48 hours. Of course, I received the generic, impersonal bids as well, so those were immediately removed as contenders.

I engaged one developer from China and another from Poland. I had not worked with either in the past. In under 24 hours, both developers said they would not be able to complete the project as originally estimated and asked to cancel. At first, I was bummed and considered it a bad week… cursed the lost time. But, I soon came to realize the alternative was worse.

The alternative of working with a local developer would have taken much longer to find, setup and actually start developing before discovering the project could not be completed on time/ under budget.


Thinking Offshore Web Design? Think Again!

Offshore web design firms promise ultimate convenience and savings to businesses around the world. Many companies even decide to hop aboard the outsource wagon and hire these design firms. In many cases, they get more than they bargained for.While it is true that many offshore web design firms promise low, low prices for web design services, far too many companies learn that you get what you pay for. Many companies based outside the US simply cannot offer the services and quality of a home-grown business. When dealing with overseas companies, businesses need to adjust to time zone differences, which often make contact and meetings virtually impossible.

Editor’s note: the previous sentence was italicized for emphasis

Sending money to pay for services is often time-consuming and expensive. Wiring money and sending overseas transfers to pay for web design is not even always safe and can leave company owners vulnerable to identity theft.

Overseas companies often do try hard to compete on the global stage, but the truth is that any US company needing web design for the competitive North American and European market needs top quality. Many companies who hire overseas web design services often have to spend extra money to repair sloppy, ungrammatical copywriting. Unfortunately, not every offshore company can deliver professional web design - in many cases, fly-by-night overseas firms deliver amateurish, unusable work. After all, anyone can set up a company half-way around the world and promise design services. There is often no way for you to verify their qualifications.

Even when an offshore web design company tries very hard, the truth is that someone based half-way around the world simply cannot know North American marketing thoroughly. Even major companies are finding that their offshore outsourcing isn’t working - the experienced web design talent is simply not there. In far too many cases, companies look at the bottom line and hire these web design services only to realize after the fact that they need to pay to have their web redesigned all over again. Does your company really want to pay TWICE for web design services?

Before companies sign on the dotted line and hire an overseas web design service, they also need to think twice about the “deal” they are getting. In many cases, offshore companies offer an impressively low hourly charge, but take longer to finish a project. Even though a web design company only charges a fraction of its US counterpart in terms of hourly price, it can easily end up charging a similar amount, simply by taking longer to complete the same amount of work. Since your company could end up paying just as much for an overseas web design service, doesn’t it make more sense to hire a US-based firm and get guaranteed, quality work for the same price?

The biggest problem with overseas web design services is that offshore services come with no legal protection whatsoever. Laws are simply very different in other parts of the world and when a company decides to choose an overseas firm, they are in effect resigning themselves to no legal protection. If a web design company turns in a plagiarized product or a product that violates intellectual property laws, the company that hired the web design service will have a very hard time finding legal redress. Worse, it is the US company that may have to face the US legal system if any laws have been violated. In many cases, offshore companies operate only via email, which means that when there is a problem with a delivered service, there is no way to get a fast response. Companies may simply disappear when there is a legal problem. Buying offshore is buying “as is” - not the way you want to hire the web design services that will make your business succeed!

About the Author

Ciplex is committed to provide the best services below market prices. Our Los Angeles professional web design company has real offices our clients can visit, and we have phone lines that work during US office hours.


Challenges Indian Offshore Teams Face in Working with Americans

As the foremost “hot spot” for America’s offshoring and offshore outsourcing of technology and business services functions today, India presents an important case study of differences in business culture. In the course of years of giving seminars to both American and Indian teams working together, I have found recurring themes and incidents that point to underlying cross-cultural differences in mindset, values and approach to business interactions.

Once you get past the more obvious mutual adjustment issues of time zones, logistics, work and holiday schedules, accents, names and language (American vs. Indian English), there are five elements of American business culture that pose special challenges for Indian teams interacting with their American counterparts - whether in the ITO, BPO or call center environment.

1. Mindset about Management Hierarchy In American business culture, rank and title aren’t as important as they are in India. Hierarchical forms of behavior are frowned upon. The expectation is that subordinates will speak up, offer suggestions, push back and take initiative rather than just do what they’re told. Decisions tend to be less top-down, authority is more delegated, and managers expect team members to take responsibility and assume ownership of results.

2. Attitudes Towards Appointments and Deadlines For Americans, strict adherence to time commitments is seen as a basic principle of professionalism and courteous behavior. Because everything tends to be strictly scheduled, delays in one appointment or deadline can have a serious ripple effect on a colleague or customer’s other work commitments. The more flexible and open-ended approach to time of Indian business culture can create tensions and unfavorable impressions on American counterparts.

3. Meaning of Agreements and Commitments Americans have a preference for clear, detailed agreements and are uneasy with vague expressions of general commitment. In business interactions, commitments are taken literally and seriously. Failure to follow through on them precisely is viewed as a sign that a person isn’t trustworthy. Indian business culture tends to view agreements more flexibly as intentions and guidelines for future action.

4. Results vs. Process Orientation In Indian business culture, following the rules and implementing correct processes is highly valued, but in American business culture, it’s all about results. There is impatience with individuals who come across as more concerned with following established processes correctly than with achieving the desired goal. Americans don’t like to be told all the procedural reasons why something can’t be or hasn’t been done.

5. Directness — Especially in Addressing Disagreements The American style of communication is characteristically direct, candid and relatively unconcerned with face-saving or the avoidance of conflict. The expectation is that questions will get answered with a clear “yes” or “no,” and that disagreements will be dealt with openly and straightforwardly, in a “tell it like it is” manner. Indians and people from other cultures that tend to avoid conflict and loss of face often find it hard to say “no” or raise problematic issues effectively with their American counterparts.

Cultural awareness and the ability to adapt effectively to another culture’s way of doing things are complex skills - whether you’re a programmer in Bangalore or a project leader in Sunnyvale. Everyone tends to take their own cultural ways of doing things for granted and to assume they are self-evident to others.

In recent years, American companies offshoring or outsourcing to India have shown growing awareness of the hidden costs of cross-cultural mismatches in work-related behaviors. They have been willing to invest in general and region-specific cross-cultural training for their onshore employees and those who are asked to travel to India. They have also learned to devise process accommodations to circumvent the negative effects of certain cultural tendencies in their offshore teams.

What these companies seldom undertake to address directly is the need to seriously educate their offshore teams in the fundamentals of American business culture - the attitudes, thought patterns and behavior norms that Americans expect. They’re missing a golden opportunity to improve the productivity and experience of their onshore-offshore teams.

Dr. Karine Schomer is President of Change Management Consulting & Training, LLC, and leads the CMCT India Practice specializing in cross-cultural training and management consulting for doing business with India. For more learning resources check the CMCT Articles Archive.

About the Author

Karine Schomer of CMCT