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Quick Link Index Outsourcing Strategy > Critical Success Factors > Selecting an Offshore Partner > Introductory Phase > Managing Offshore Projects > Time Zone Difference > Legal Concerns > Local Presence >
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1) Outsourcing Strategy - Examining Opportunities for Success
Outsourcing of all or some of your company's IT or operational functions is a business critical mission that requires a strategic approach by top management that percolates through the organization. New outsourcing models are opening new opportunities for success. The gamut of outsourcing options can translate into significant benefits in cost control, application availability and in freeing staff from routine chores to work on strategically important projects. Offshore Success Redefined: Discovering the Science of Offshore Development, Zinnov, Aug 2003>
To Develop an offshore strategy for the organization answer the following:
| Simple Strategy Matrix | Cost | Quality | Risk | Control | Organizational objectives, long term strategy and the impact of outsourcing? | | | | | What to outsource? | | | | | Where to outsource? | | | | | When to outsource? | | | | | How to outsource? | | | | | Ownership Options (Buy, Build or Source)? | | | | |
The "Offshore Roadmap to Success," complete with analyst reports, case studies, articles and more is available to prospective clients:
Aligning IT operations with business goals Understanding the variety of outsourcing models Cost savings expectations with outsourcing Potential service level improvements with outsourcing Effective change management Evaluating and mitigating risk
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2) Critical Success Factors The following success factors are critical for any application development and importantly for outsourced ones: Clear statement of requirements Availability of competent resources User involvement Executive support Proper planning and benchmarking
3) Selecting an Offshore P artnerThe following criteria are typically applied by corporations when evaluating outsourcing providers: What type of relationship do your wish you establish with an offshore company? This will depend on size of your company and your projects and the nature of your outsourcing strategy:Continuity: If you expect a steady flow of work using consistent programming languages and operating systems, an offshore team dedicated exclusively to your company will be ideal Versatility/Flexibility: If you require a wide range of programming languages and platforms you would not require a dedicated team
Company size: The quality of the few people that you work with on your project is more important than the overall size of a company. Thus the team working for you is essential.Size of existing customer base Customer mix based on revenue size Number of large or key accounts Global reach National reach
Financial stability International certifications (ISO-9001 or SEI-CMM Level 3 or 4) Certification is no guarantee that the firm can deliver high-quality software It means that the firm understands quality assurance concepts and has gone through a process to implement company-wide standards.
Examine a work product Review code samples: commenting, naming conventions, well-structured SQL statements, etc.Check references
Employee churn/turnover: Watch for low project manager turnover, as individual programmers are mostly less important than the project managers. Business focus: History of providing outsourcing services - The ideal firm would be one committed to the offshore model and focus on programming only. Other customers supported by this provider in its vertical market segment
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4) Introductory Phase
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| 5) Managing Offshore ProjectsInvolve the offshore team in the technical architecture decisions (choice of programming language, server, etc.) at the beginning. Tapping their expertise could improve the architecture; and they get involved early on. If you are a software development firm and concerned that strict internal standards will be met, provide a coding standards document for every project. It should comment style, the naming conventions, and the code formatting style. Your documentation and mock-ups need to be thorough. Use is a web-based bug-tracking tool - which could be provided by your offshore team. It is a good idea to implement the software on a test server for testing purposed and give your offshore teams Telnet or pcAnywhere access to the test server. Use a version control system that runs over the Internet. Typically, however offshore teams should have their own version control system that they use during development. Meet your own deadlines for delivering specifications to the programming team
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| 6) Time Zone DifferencePros (Staggering):
Projects can progress swiftly with teams working on US and Indian or Russian time schedules. In the debugging phase the offshore team would send you new code at the end of their workday which your programmers can install and test in what is the early morning for them. At the end of the workday your test results would be delivered to the offshore team before they return to work the following day.
Cons:
On rare occasions, critical programming problems cannot be addressed immediately.
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| 7) Legal ConcernsAs a rule, your intellectual property is secure. After all, it is in the interest of offshore partners to sustain long-term business relationships. However, the higher the intellectual property value of the software itself, the greater the reason for concern will be. "With offshore moves realistically taking anywhere from 24 to 60 months or more, McCarthy suggests that successful management of offshore resources requires governance capable of adapting to the changing needs of the business relationship. "How well aligned are business and IT; are they at each other's throats all the time?" he asks. "How sophisticated are your IT processes? How rigorous are they? Are you used to things like service-level agreements? These all dictate how easy or relatively easy it'll be to manage the offshore provider." (InformationWeek: Offshore Outsourcing Often Still More The Exception Than The Rule, Report Dec. 15, 2003) What recourse do you have if your offshore partner steals your intellectual property? Although contracts with your offshore partners give you some security, getting a judgment, and then also enforcing the title abroad can become a two-tier problem. As a rule the more immature an offshore market is, the weaker the rule of law will be. Therefore, offshore firms, that have incorporated in the US or the EU should be given preference.
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| 8) Local Presence In addition to the added legal peace of mind, local intermediaries are often responsible for gathering requirements from the client, designing the software, developing the specifications, testing the software, and implementing the software. The design phase of the software development process is the most difficult one and the most important. Second, the communication, cultural, and distance challenges would make it very difficult for an offshore team from India or Eastern Europe to design a software application for a US or EU client.
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