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In
the current global economy, companies are evaluating outsourcing
and globalized development options, to reduce costs and
increase productivity. But companies are rapidly
learning the inherent risk of distributed development,
especially with pure offshore outsourcing. To ensure quality
and on-time successful project delivery with offshore teams,
a lot of management overhead can be expended. And even
before that, there is the difficult choice of appropriate
vendor selection, from providers far and wide.
SurroundApps On-Demand Blend Model tackles these two risks head-on
- by locating on-shore resources in close proximity with the clients,
SurroundApps takes on the offshore resource management task itself.
No language or cultural barrier needs to be encountered by the customer,
and for urgent issues they can directly communicate with reputable
local resources.
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chooses the right
blend of off-shore and on-shore resources according to the following
criteria:
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What ODBM does is allow a blend of on-shore and off-shore resources to
maximize project success. Based on the following three main criterias,
the right blend of off-shore and on-shore resources are chosen:
Cost
Sensitivity
Access
to Skilled Resources
Degree
of User Interaction
Also in the middle of a project if necessary on-shore resources are applied
to ensure high-quality on-time delivery.
Cost sensitivity
Obviously all projects will have cost sensitivity - the need to deliver
at the lowest cost possible. The key here is how the cost sensitivity
relates to other factors in its importance to the project team. For example,
is the project team willing to expose itself to higher risk in order
to lower project costs? Is the project team willing to work with the
time-difference and other logistical issues inherent in working with
an offshore team. Are they used to calling a remote help desk? Are there
language barriers? There are many factors to consider before just looking
at inexpensive labor.
Availability of skilledresources
Sometimes cutting edge skills are in short supply among the off-shore
resources. Attosoft takes care of this issue by its strong team of US-based
developers. The offshore-onshore balance is found by asking the following
type of relevant questions:
Does the technology require specialized resources that may be difficult
to find?
Does the Attosoft on-shore team have the full-resource team with adequate
skills?
If not and if still very low cost is desired, then is it possible to
do the project in phases, as additional resources are hired and trained.
Degree of user interaction needed
Requirement gathering, Scope definition, etc tasks rquire heavy user
interaction and has to be done....
What degree of user involvement is necessary? Those projects or segments
of projects with a higher need for user interaction are best suited
to be performed onsite. Those projects with high requirements for user
interaction tend to increase the communication complexity on offshore
projects, thus increasing your risk. In some cases, we have found that
if the degree of user interaction is high, but cost pressures still
remain, you can use a blended model of onshore resources to interact
with the business and user community, and then send the back-end development
and support to a lower-cost nearshore or offshore option.
Scope clarity and maturity
How clearly is the project scope defined? How mature and stable is your
IT environment? The better defined the scope of the initiative, the easier
it is to move it from the client’s location to a development center
based either in the United States, nearshore, or offshore. Also, it is
critical that your IT environment be in a stable and optimized mode before
considering any move to one of the three options.
All Applications Are Not Created Equal–Sourcing Criteria must align
with the right drivers.
Quick project start-up/speed to deployment
How quickly does the first iteration of the product or support need to
be delivered? Remember, you will incur a significant ramp-up time in
order to transfer your firm’s knowledge to an outsourcing provider.
This transfer phase is considered to be the most critical phase by outsourcing
professionals because this is where all the knowledge is passed to the
service provider. If you don’t implement this transfer correctly,
you could jeopardize your entire outsourcing contract.
Other questions you need to answer center on deployment: Do you need
a provider that can develop and deploy your application? Do you have
regionalization issues? If so, you may find that a provider with a
network of centers in multiple countries or locations is better equipped
to handle speedy development and deployments. Again, look for providers
that have a network of centers with an existing infrastructure to ensure
a quick project start up.
Overall project duration
Offshore development and support is better suited for projects with a
longer duration, as it will provide better economies of scale. For example,
if you are looking to outsource a
back-end support process with a three- to five-year window of coverage,
you will find the pricing model for this type of work to be much more
competitive than if you are looking to send nine months of work out of
house.
In some cases, it is better to take a nine-month development project
and simply send the work to an outsourced center based in the United
States. This U.S.-based center will make the decision during the development
cycle if all project tasks are staying on U.S. soil or if some of the
activities (24-hour shift-testing tasks, for example) can move to nearshore
or offshore.
Strategic nature of the work
What is the strategic nature of the project? Both strategic and tactical
projects can be performed using an onshore, nearshore, or offshore model.
However, the best nearshore or offshore candidates for development projects
are those that are more tactical in nature. For example, in developing
and supporting back-end batch processing, some elements of testing and
minor bug-fixing can be done outside the United States fairly easily.
However, if I were in the initial stages of scoping and developing a
single, corporate-wide instance of a direct procurement tool that was
going to link into all my suppliers, I would want to run the project
onsite wherever the client’s headquarters and business users existed.
Top management sponsorship
One of the key factors in successfully using an outsourcing model is
to make sure that this is a top-down management decision in your company.
You will have a lot of pushback from internal organizations that will
spend their time explaining that your outsourcing strategy will not work.
You must communicate clearly in your organization that the decision has
been made and that people should spend their energy making this decision
work.
Reversibility and User Training
The single most critical element that I find overlooked is the consideration
of reversibility: What if you decide to bring the application, development,
or process that you outsourced back in-house? Does your outsourcing provider
have a process for reversing the knowledge back to your company, and
more important, has the provider done this in the past for other clients?
Service level agreement....
Summary
Transition and ongoing support of applications using an onshore, nearshore,
or offshore model requires a business-aligned approach to balance the
ensuing benefits with their risks. The size of your application, its
complexity, business criticality, and other factors require you to consider
a number of different parameters when you are exploring the suitability
of a sourcing channel.
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