The Offshore Outsourcing Series: Questions Answered

Intro to Series:

Historically, many U.S. companies have viewed offshore outsourcing as affordable, but not reliable. In an effort to improve reliability, this four-part series overviews different factors, challenges, tools, and processes that are all involved in offshoring—all from the perspective of both the client and the offshore service provider. We hope this series alleviates the mystery that some feel about offshore, and provides an alternative way of thinking for those who may have tried it and had a bad experience.

These solutions are based upon my experience at EC Group and previous engagements.

Part 1: Factors that Affect Offshore Development Model

To begin the series, I’ll do a brief overview for four major factors affect the offshore development model:

Organizational Development Factor

Software Applications play a major role in organizations which follow a defined business process. The requirements are different types, ranging from normal application, website, multimedia solutions, all the way to enterprise portals. Time, cost, and technical knowledge are the most important aspects, and impact the achievement of company goals. Often, there is a lack of qualified workforce to manage the software development activity, as the management is more concerned with business development activities. Adopting IT outsourcing methodology enables achievement in quality, availability of a large pool of expert software developers, and huge savings in labor costs.

Financial and Cost Factor

To sustain today’s highly competitive market with short product lifetime, software development projects need to stay within budget, be innovative, and deliver according to the end-users expectations. As many projects run over budget, reducing production cost is essential. One popular and effective means to cut cost is outsourcing. An offshore-outsourced software development model is a frequently used means of cost reduction. However, certain company processes might have to change before incorporating an offshore vendor into the mix.

Skills and Technology Factor

Technical knowledge and the urge to complete the job faster is the bottom-line of any organization which requires a Software Solution. (Eg: When the Agile development methodology is followed and SCRUM practices are implemented, then it should be mandatory that at least the leader be a Certified Scrum Master. Whether the certificate is a proof of the knowledge or not, it definitely proves that the leader is fond of learning and exhibiting latest processes and technologies.) Technology and business needs change dynamically; the offshore technical team should be well equipped with the latest framework, methodologies, and technologies which could prove to be one of the core reasons for success of the offshore software development team.

Revenue Factor

The ultimate goal of any business or new product is to generate revenue for the organization. Your offshore partner should be providing you with solutions that deliver the first phase of  your product with minimum features to meet business goals. This way your revenue can be started the earliest possible. Onsite teams use multiple tools and techniques to measure development productivity. Similar Tools and Techniques will do well for the Offshore Development Team also.

Within these factors, I mentioned a change in processes, methodologies, and helpful tools which can contribute to success in offshore outsourcing. The upcoming emails of this series will cover these topics and provide insights into best practices for a successful offshore relationship.

By Sudesh Nadesan: Sudesh is the Senior Project Manager at EC Group Datasoft. Onsite in India, he observes all EC Group development teams, and supports them with tasks, project delivery, planning, and makes technology suggestions.

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