Offshore service providers faced with high demand and pressure margins, leveraged skilled, customer-facing resources to win deals and then assigned the work to low skilled resources that were simply order takers with little or no relevant experience.
Following the Waterfall development lifecycle, companies spent months producing detailed functional and technical requirements documents that were then thrown over the wall to vendor teams.
The results were often catastrophic. Projects took twice as long and cost twice as much. Quality suffered as buggy software plagued the release plans. The delivery resources were unable to provide insight and guidance to customer teams who believed their expectations were perfectly clear. Many vendor team members feared looking bad in front of their peers or the clients and would keep quiet about project challenges and delays. Extensive travel by both teams (customer and vendor) was required to put projects back on track.
Typically the results showed that projects cost 40-50% more than anticipated and there was a 30-50% loss of productivity caused by time zone and cultural differences, and the lack of experience, which goes to show, you get what you pay for.
Some companies, fearing the loss of control and poor quality, decided to setup their own captive development centers, hoping to get better results.
Even Google had some problems finding skilled development resources as they were competing for the best software talent. The company's Founder and Director Kavitark Ram Shriram admitted: “Google, which is considered to have a very low attrition rate even in the high-job-hopping Indian IT space, has found it more challenging to hire certain talent in India as compared to other parts of the world”.
Apple in April of 2006 commenced operations in India, but one month later shut down. Some of the reasons cited were: India isn't as cheap as it used to be, the turnover is high, and the competition for good people is strong. In the end, Apple felt it could do it more efficiently elsewhere.
How to Avoid Unskilled Resources
Later, wiser companies choosing to outsource to Asia, turn to outsourcing consultants to help them prepare RFIs, RFPs, and select responsible vendors. RFI questionnaires typically ask for the number of resources with a specific skill set, forgetting to ask how many might be available when their project is set to commence. Really savvy customers with more mature vendor selection processes choose to visit the final contenders and individually interview each resource that is tentatively allocated.
Finally, customers demand fixed bid project engagements with performance based compensation to incentivize the vendors to get it done right the first time. While this helps the customers control the costs, the delivery deadlines still get pushed out and the vendor is just happy they got the deal.
Ultimately, the best way to ensure that you will not get under skilled resources on your project is to do all the above and check with recent references.
Back to: 10 Ways to Fail at Outsourcing
Following the Waterfall development lifecycle, companies spent months producing detailed functional and technical requirements documents that were then thrown over the wall to vendor teams.
The results were often catastrophic. Projects took twice as long and cost twice as much. Quality suffered as buggy software plagued the release plans. The delivery resources were unable to provide insight and guidance to customer teams who believed their expectations were perfectly clear. Many vendor team members feared looking bad in front of their peers or the clients and would keep quiet about project challenges and delays. Extensive travel by both teams (customer and vendor) was required to put projects back on track.
Typically the results showed that projects cost 40-50% more than anticipated and there was a 30-50% loss of productivity caused by time zone and cultural differences, and the lack of experience, which goes to show, you get what you pay for.
Some companies, fearing the loss of control and poor quality, decided to setup their own captive development centers, hoping to get better results.
Even Google had some problems finding skilled development resources as they were competing for the best software talent. The company's Founder and Director Kavitark Ram Shriram admitted: “Google, which is considered to have a very low attrition rate even in the high-job-hopping Indian IT space, has found it more challenging to hire certain talent in India as compared to other parts of the world”.
Apple in April of 2006 commenced operations in India, but one month later shut down. Some of the reasons cited were: India isn't as cheap as it used to be, the turnover is high, and the competition for good people is strong. In the end, Apple felt it could do it more efficiently elsewhere.
How to Avoid Unskilled Resources
Later, wiser companies choosing to outsource to Asia, turn to outsourcing consultants to help them prepare RFIs, RFPs, and select responsible vendors. RFI questionnaires typically ask for the number of resources with a specific skill set, forgetting to ask how many might be available when their project is set to commence. Really savvy customers with more mature vendor selection processes choose to visit the final contenders and individually interview each resource that is tentatively allocated.
Finally, customers demand fixed bid project engagements with performance based compensation to incentivize the vendors to get it done right the first time. While this helps the customers control the costs, the delivery deadlines still get pushed out and the vendor is just happy they got the deal.
Ultimately, the best way to ensure that you will not get under skilled resources on your project is to do all the above and check with recent references.
Back to: 10 Ways to Fail at Outsourcing
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This is nice informational sharing about nearshore development. Its really helpful sharing and I need this types of information, Thanks for sharing it and keep it on…
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