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Managing
the Risk of Offshore Vendor Selection
Enterprise
www.EnterpriseCM.com
:: Info@EnterpriseCM.com
Companies
considering the use of offshore resources for their next
development project need only spend 2/10ths of a second
on Google to find roughly 5,150,000 options to choose from
using the exact phrase “offshore development.”
The options are boundless and the capabilities limitless.
So why does this cause more confusion than good?
Today’s
lean organizations have little time and energy to search
through, locate, validate and negotiate contracts with a
short list of offshore firms. But nonetheless they do need
to create a short list of potential providers.
In
general there are five questions a client must ask of each
potential offshore provider:
•
Is the offshore provider dependable?
•
Do they have the necessary technical skills to get the job
done?
•
Is there work of an acceptable level of quality?
•
How will you protect your company should you have to revert
to legal channels to resolve any problems?
•
How are you going to manage the project from afar?
This
paper will help clients sort through the set of requirements
to identify that magical short list with a level of confidence
that the work stands a very good chance of being completed
on time and on budget while satisfying the requirements.
Dependability
Measuring dependability is a function of more than just
getting the nod from a reference. Dependability is often
a gut feeling you get as you begin the most basic of conversations
with the offshore provider. Are they responsive to your
emails? Does the telephone get answered? Do they have multiple
avenues of communication, such as a backup for the project
manager? Has their business development manager pulled the
technical resource into the conversation at an early stage?
Much of what you feel inside is going to give you the most
comfort as you move forward with the selected provider.
Often times it simply means you have to spend more money
to get a higher level of comfort of your ability to really
depend on the offshore provider. But keep in mind, higher
costs does not necessarily mean better or more dependable
work, it’s simply something you may have to endure
so you walk away from signing the Statement of Work with
a high level of confidence you will be successful.
Capability
The broad base of technical capabilities available in the
offshore market is staggering. Companies that take their
software development offshore will never again feel the
IT resource shortage such as were encountered in the late-1990’s.
Many companies have and continue to move into the offshore
market and as a result there are many, many new offshore
providers that have a fairly shallow pool of experiences
to draw from. This leads to the simple requirement for a
detailed list of references, including specifics about each
of the projects. Clients should demand at least five solid
references from each potential provider. Ideally, there
will be references from Western Europe and / or the United
States. Be sure to collect the size of the project, including
man months and cost. Offshore providers hesitant to provide
this should at least be able to provide a range. A company
used to 4 – 6 week projects may not have the skills
to be successful in a 2,000 – 20,000 hour project.
Clients should collect both the business solution and the
technologies applied to satisfy the business solution. This
will give clients a feel for the provider’s ability
to strategize about how to best apply technologies to meet
your unique requirements. However, do not eliminate an offshore
provider simply because they don’t have specific experience
on a project just like yours.
Quality
Quality is a term that has been thrown around for decades.
For one client it may mean that the offshore provider has
achieved a certain level of the Capability Maturity Model,
while the next customer may simply want to be assured they
are getting a “satisfaction guarantee”. Unless
there is a specific requirement for a certification, clients
should concentrate on the specific practices of the offshore
provider. Clients should ensure they have documented information
about the quality processes and environment for the offshore
providers. All respectable offshore companies will be able
to readily provide this and able to communicate it clearly,
even to the extent of providing recent examples.
How
many levels of testing will there be? Where will each testing
level occur? How will the application be introduced or released
into the client’s controlled environment? What are
the tools and processes used by the offshore company perform
change management and defect tracking?
Despite
the advent of e-time and rapid application development,
there is still a basic requirement that applications follow
a fundamental software development life cycle; the geographically
removed location of the development team does not eliminate
this (out of sight, out of mind).
Legality
The legalities of working with offshore companies can cause
any company’s legal counsel to cringe. The idea of
working directly with a company controlled by foreign laws
requires thorough due diligence to ensure any contract will
indeed be legally binding. Often, gaining this level of
guarantee can delay the start of any offshore project by
weeks, if not months.
There
are two ways to manage this risk: an independent assessment
of the offshore company or using a US corporation, which
takes responsibility for the project but uses existing relationships
it has to stream the work to its offshore partner network.
Manageability
The greatest risk associated with offshore development revolves
around management of the offshore relationship and the development
efforts. This begins in the very early stages with the customer
not being adequately prepared to do business offshore. Which
applications should be moved offshore? Who will manage the
relationship? Are our project managers trained in the nuances
of managing virtual teams, let alone one from another country
and culture?
The
most important action a company can take when considering
the use of offshore resources is to seek guidance from an
independent offshore consultation firm. These firms provide
a variety of services including conducting on-site assessments
of offshore companies, helping establish dedicated offshore
development centers, providing offshore project manager
training, and other industry-specific information.
For
More Information:
Phone (+1.480.710.0953)
Email (Info@EnterpriseCM.com
Web www.EnterpriseCM.com. |
