Outsourcing and Offshore Development

1
Outsourcing and Offshore Development

• Massachusetts Software Internet Council
• May 1, 2003

2
Agenda

• Who we are
• The project
• The approach
• Achievements and lessons learned
• Where do we go from here

3
About Lightbridge

• Lightbridge is a global enabler of mobile
  business solutions, offering essential software
  and services that are designed to drive down
  costs and increase the lifetime value of the
  customer.
• Pam Reeve, CEO, Lightbridge

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Company Snapshot

• Founded 1989
• IPO September, 1996
• 28.4 million shares outstanding (06/30/02)
• 2001 Revenues 177 M, Cash 120 M
• Headquarters Burlington, MA, USA
• U. S. offices in Massachusetts, Colorado and
  California
• International offices in Latin America and Asia
  Pacific
• 700 Employees
• More than 70 telecommunications clients worldwide

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Revenue by Business Segment
Consulting Services 24
Hardware 2
Transactions 64
Software 10
Chart is based on year-to-date financial results
as of June 30, 2002 Information source
Lightbridge publicly-filed 10-K and Annual Report
documents
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The Project

• Licensed software application Retail Management
  System
• Eight releases in 12 months
• PowerBuilder Client/Server to Java/J2EE
• Use outside firm to do functionally equivalent
  redevelopment
• Use Lightbridge staff to continue client-specific
  work

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The Approach

• Ten week process
• RFP -gt Team on-site
• Evaluated 15 potential providers
• Short list of 3
• Negotiations with 2
• Intent was to build a relationship with a
  partner, not simply to select a vendor

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Achievements

• Project completed under budget
• Project completed on time
• Timeline was renegotiated
• Solid relationship established between the two
  companies
• Regular communication
• Open and honest communication is key, especially
  about staff and quality issues
• Ability to discuss respective business issues

9
Lessons Learned

• Letting go is hard to do
• We tried to own too much
• Split ownership of architecture and technical
  design
• Lightbridge QA and performance testing
• Maintains checks and balances
• Does not give partner opportunity to address
  quality and performance issues prior to code
  delivery
• Fixed Price Aggressive Date Scope and quality
  compromises

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Where Do We Go From Here

• We have engaged Virtusa for additional projects
• Strategy as well as execution
• Core product areas
• Always considered an option when discussing
  development time and cost

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Outsourcing Observations

• Managing the risks unique to geography should be
  discussed and negotiated
• Make the time difference work for you, not
  against you
• Leverage cultural differences, dont ignore them
• Communication, especially documentation, is key