#2 Ignoring Timezone Differences - 10 Ways to Fail at Outsourcing

In what is perhaps THE MOST CRUCIAL and FAILURE CAUSING item on this list, many forget that software development is HARD WORK and requires real-time collaboration much of the time. Regardless of the improvements in VOIP, development platforms, and people's willingness to start early and work late, the rip in communications caused by time zone differences is practically immeasurable. Just look at how many hours India and the US are separated.


The working hour overlap is NILL between San Francisco and Bangalore for example. Click on the image to plan your meetings with another time zone.

With the old Waterfall project management styles you would find that a team in the US would need to write out every minute detail of what the application should do and how it should function and deal with every contingency in advance so documents could be turned over to the development team to work on and whalah, overnight you will have working software. Didn't happen that way.

Some Indian companies are adopting Agile project management. Yahoo! This will improve the expectations factor but still communicating will be quite difficult.

What ultimately will need to happen is 1) the Indian team will need to work odd hours to communicate with the US team and 2) visit the US periodically to close communication gaps, while the 3) US team will need to visit the Indian team 3-4 times a year to deal with attrition, team morale issues, and productivity problems. Each time someone visits another 2-4 days are lost in travel time and jet lag, not to mention families destroyed because of all the travel. And each trip will cost a minimum of $2000 for airfare and hotel, etc.

In all outsourcing cases each team should visit the other but with greater physical distance, comes greater communication gaps and higher expenses. Ultimately this leads to a higher Total Cost of Engagement, which is NOT reflected in the rate per hour. Those who makes their decisions primarily based on the hourly rate deserve to lose sleep.

All of this points to doing business with nearshore providers to take advantage of the cultural similarities and cost savings. Did we mention that Mexico is a great location for application development outsourcing?

Back to: 10 Ways to Fail at Outsourcing

#1 Underbidding to win the deal - 10 Ways to Fail at Outsourcing

Underbidding to win the deal - so why should you as the enterprise IT manager responsible for choosing an application development partner care that your vendor is underbidding to win the deal? After all, if your project is fixed bid, there is no risk, right? Wrong

First, let's admit that a sizable share of IT projects fail and that any number of factors can cause a project to be considered a failure.

When a single vendor low bids to win a deal, you might choose that vendor over the next cheapest vendor because they were cheaper, not because they were better. You might even renegotiate with the 2nd cheapest vendor that is better, letting them know you like them but that someone else is cheaper. How can you justify spending 15% more even though the quality is expected to be more, right? This is the IT equivalent to dumping.

Here's what happens behind the scenes: Vendor A low bids the deal to win it. Perhaps they lack the maturity as a company to accurately estimate the effort required to deliver hte project. Perhaps they lack the technical skills to foresee the complications. Perhaps they know well that they are losing money on this deal and hoping to make it up by putting entry level developers on the project.

In either of these cases, they will most likely fall behind schedule and /or deliver a poor quality solution which will cost YOU frustration and extra money as you have to spend more to maintain a solution which was poorly built. We see it ALL THE TIME!

So, you saved on the initial project cost but ended up delivering late which may have cost you market share or revenue or just plain frustration. The final application quality is lacking which will cost you extra in maintenance.. Do you get it?

Unfortunately most IT managers making these decisions will NOT heed the warnings and advice and will make this mistake on their own a few times before they become wiser. Human nature I suppose.

Back to: 10 Ways to Fail at Outsourcing

10 Ways to Fail with Outsourcing

What would happen to you and your company if you choose the wrong development partner? Perhaps you already have, perhaps you are about to. There are several intricacies of working with an outsourced product development or application development provider that every company should be aware of. Each one of these factors below can have an impact on your project, either causing it to be late, over budget, or a technical mess to manage. Most of important of all is that focusing on the cheapest rate will probably NOT get you the best results. Companies seeking outsourced software development partners should be aware of these issues and tactics:


1. Underbidding to win the deal

2. Time zone differences

3. Cultural differences

4. Low skilled or under qualified resources

5. High turnover

6. Lack of experience with a particular technology

7. Unexpected overhead / expenses

8. Attempting to Fix the Price, Scope, and Timeline

9. Poor quality in architectural design and coding

10. Poor quality in documentation


In the following weeks, I will post more details about how the factors above can affect your IT project and how you can avoid such issues with your outsourcing partner.

Nearshore Software Development in Mexico

Scio Consulting a Nearshore and Agile Software Development Company with expertise in SaaS

Nearshore Software Development in Mexico

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IT Trends for 2010

IT Trends for 2010 say that despite of the ecomonical crisis from 2009, American technology companies will start hiring more IT workers this year but with caution.

"Current predictions of a fragile recovery for 2010 don't reveal the necessary strategic business changes and tough decisions that will be needed to make that happen across all sectors," said Cliff Lineker, BCS strategic business development director.

According to a Robert Half Technology Study to 1,400 CIOs, the 7% will be hiring IT staff in the 1st quarter while 4% will be decrease its workforce. The net 3% increase is up 3 points from last quarter’s forecast. However, IT Executives seem to be careful about hiring because they need to go slow.

BCS says that one of the key priorities for IT Heads in this year are “…to know exactly what skills their IT team possess going into 2010” and “…making sure they have the skilled staff in the right roles to exploit the value of IT consistently and effectively to move the business forward”. After knowing their needs about the IT Staff they could decide to remain the same or add more personnel.

However, many CIOs have recognized that hiring new people has more risks than expanding with an outsourcing partner. When you hire someone directly, you incur in all the overhead that this implies: recruiting processes, benefits, equipment for the workplace, training, payments, etc. with the latent risk that at any time the employee could decide to leave the company.

In the other hand, if you decide to go with an outsourcing partner, you can afford to choose whom to hire, depending on the benefits, qualification and the proposition that is given to you and the one that better fits your needs. In some cases, outsourcing partners can be responsible for the entire process and project, with SLA-like rewards and penalties that are difficult to implement with employees.

The options of outsourcing software development are: Onshore, Offshore or Nearshore. The disadvantages of outsourcing offshore are time zone differences, jetlag when a travel is required and total cost of engagement, etc.

While Nearshore Software Development to Mexico or LATAM Countries give many benefits for the IT Team, especially with regard to software and agile development referred. Indeed CIO magazine has identified 6 IT outsourcing HotSpots for 2010, which includes Mexico.