Managing Offshore Software Development Projects Presented by Orlando Moreno email: [email protected] Phone: 408.656.2498 web: http:// members.tripod.com/omoreno
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Managing Offshore Software Development Projects
Presented by Orlando Moreno
email: [email protected]: 408.656.2498
web: http://members.tripod.com/omoreno
What Is It• Offshore Development is the term most often used to
describe the outsourcing of software programming and engineering services to facilities located in foreign countries with lower labor costs
Offshore outsourcing is a viable sourcing option for IT departments
Early 90’s Mid to Late 90’s Present
Mundane work: mainframe
maintenance
Time critical: Y2K, re-
engineering
Business critical: sophisticated
new applications, integration
Where Is It• India is the major player in offshore development
• Ireland, Israel, China, Philippines are also key players
• Russia has stepped onto the world stage as a source of highly skilled, low cost developers
Each generation of outsourcing countries has its own advantages and shortcomings
Why Do It
• Execute projects at significantly lower cost
• Leverage large pool of highly skilled resources
• Accelerate project delivery schedule
• Reduce on-site contracting
• Ability to scale up/down quickly
Produce more and faster for less
Why Not Do It
• Language nuances
• Cultural differences
• Geographical distance
• Time difference
It is not simple…
Companies Doing It
• Intel, American Express, Lucent, Aetna, U.S. Healthcare, Compaq, General Motors, Home Depot, IBM, Microsoft, Motorola, Philips Semiconductors, Shell, Sprint, 3M, Sun Microsystems, Boeing, Northern Telecom, Target, Xerox, …
• Synxis, Videos.com, Smucker, The Principal Financial Group, Farmer's Insurance Group
And many more, and smaller ones too
What they outsource
• R&D
• Development
• Maintenance
• Support
• Help Desk
• Operations
All kinds of projects and services
HighSize
Complexity
Low
High
OffshoreOffshore
In-House Simplify
Should You Consider It
• Do you have a perfect need for offshore outsourcing? Tight budgets Not enough people Backlog of projects
Business is changing Competition demands agility Management expects delivery Technology is evolving
Maybe you should…
AND AT THE SAME TIME
If You Decide To Do It
• Senior management buy-in
• Right offshore vendor/partner
• Win-win long term relationship
• Clear project scope and requirements
• Strong project management
• Well defined and documented processes
• Effective communication
Remember these success factors
How To Select It• Define requirements for offshore outsourcing• Establish evaluation criteria• Research potential candidates• Identify initial list of candidates• Prepare RFP• Request proposals• Evaluate responses• Check references• Select short list of candidates for face-to-face meetings• Conduct vendor meetings• Visit vendors’ offshore development centers• Make final selection• Negotiate a win-win contract
Carefully, with all possible attention
Evaluation criteria
• Are they a viable vendor/partner? capabilities and services, location, political stability, culture, size,
financials, references
• Do they have required delivery capabilities? staff skills and experience, resources availability and retention, ability
to ramp up, software development process, infrastructure, knowledge management, quality focus
• Is their pricing model competitive? fixed price vs. time-and-materials, offshore and onshore rates used for
estimations
Three major areas of assessment
Relationship Models
Outsourcing individual projects
Offshore development center with dedicated resources
Joint venture with offshore
vendor
Wholly owned offshore
subsidiary
Benefits
Level of EngagementAdditional “bodies”
Start small, but think long term…
Managing Vendor• Senior management champion is critical
• Separate vendor/contract management from project work
• Put in place an effective process to manage the relationship
• Require single point of contact from vendor
• Clearly define roles and responsibilities
• Start small, learn to work together
• Understand cultural differences
• Involve vendor in planning process
• Measure vendor performance
• Provide feedback
Establish win-win relationship
Managing Projects• Assign dedicated project manager
• Require single point of contact from vendor
• Establish “one team”
• Maintain a positive environment
• Clearly define projects scope and requirements
• Follow well defined and documented processes
• Control scope
• Use appropriate collaboration tools
• Communicate, communicate, communicate
It is all about people…communication…and deliverables
Offshore/Onsite Mix
Offshore
Onsite
More
More
Small team from the vendor
company is located at
customer’s site
Vendor’s project
manager is located at
customer’s site
Vendor does not have any
onsite presence
Development team is always offshore
Offshore/Onsite Mix (cont.)
Onsite:
1. Planning
2. Analysis
7. User acceptance
8. Training
Offshore:
3. Design
4. Coding
5. Testing
6. Documentation
Implementation
Project management
ONE TEAM
All good project management practices apply…
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