Managing Offshore Software Development Projects

1
Managing Offshore Software
Development Projects

• Presented by Orlando Moreno
• email omoreno_at_hotmail.com
• Phone [phone]
• web http//members.tripod.com/omoreno

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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

Business critical sophisticated
new applications, integration
Time critical Y2K, re-engineering
Mundane work mainframe maintenance
Early 90s
Mid to Late 90s
Present
Offshore outsourcing is a viable sourcing option
for IT departments
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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
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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
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Why Not Do It

• Language nuances
• Cultural differences
• Geographical distance
• Time difference

It is not simple
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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
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What they outsource

• RD
• Development
• Maintenance
• Support
• Help Desk
• Operations

All kinds of projects and services
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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

AND AT THE SAME TIME
Maybe you should
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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
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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
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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
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Relationship Models
Benefits
Wholly owned offshore subsidiary
Joint venture with offshore vendor
Offshore development center with dedicated
resources
Outsourcing individual projects
Additional bodies
Level of Engagement
Start small, but think long term
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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
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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 peoplecommunicationand
deliverables
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Offshore/Onsite Mix
More
Small team from the vendor company is located at
customers site
Vendors project manager is located at customers
site
Onsite
Vendor does not have any onsite presence
Offshore
More
Development team is always offshore
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Offshore/Onsite Mix (cont.)
Project management
Onsite 1. Planning 2. Analysis 7. User
acceptance 8. Training

• Offshore
• 3. Design
• 4. Coding
• 5. Testing
• 6. Documentation

ONE TEAM
Implementation
All good project management practices apply
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QA

• Are you ready for offshore outsourcing ?