In an effort to reduce software development costs, more companies are looking to outsourcing.
However, all too often, despite every effort to choose the right partner, IT executives find themselves stuck in a nightmare. In the beginning all seems to be a honeymoon; low prices, qualified people, etc. but further into the relationship, once you are committed, suddenly everything changes.
Maybe it sounds repetitive, but focusing only in the price could be the biggest mistake ever. Besides cultural differences or time zone difference, the absence of relevant technical expertise has been a key factor in the failure of software development outsourcing.
Dean Davison – Vice President of Service Management Strategies at META Group writes in "The Hidden Costs of Offshore Outsourcing" offshore vendors often lack developer experience. On average, IT organizations going offshore will experience a 20 percent decline in application development efficiency during the first two years of a contract as a result of such differences”. We have clients that say they had productivity losses of 50% when they went offshore.
When building software products not only is experience, but also specialized knowledge is required. The right expertise can mean the difference between success and failure. The offshore vendor’s lack of experience represents a significant risk to the Client.
American companies have been struggling with the lack of technology knowledge and experience of offshore teams. We can assume that all offshore teams have been already trained in the common technologies (e.g. C#, .Net, Java, etc), but the truth is that most of the time they are trained at the client’s expense, without their knowledge. When coupling the rate of attrition with the growth rate of the company, it is fairly easy to see that experienced resources move up or move out and leave inexperienced resources in their place.
The most common areas where a team will have to be trained are:
• Cutting edge technologies
• Client’s development environment
• Client application architecture, design, tools, etc.
• Client specific domain knowledge
What does it mean?
When you partner with an outsource provider you may need to provide domain training in conjunction with project kickoffs. Some refer to it as knowledge transfer.
In many cases, the client’s team may go offshore to visit the offshore partner, and/or some senior members of the offshore team may need to come onsite to get up to speed. Either way, face to face meetings will facilitate collaboration between both parties. Be aware of the vendor that suggests their offshore team come onsite for months at a time. That suggests they have a lot to learn and there may be another partner out there with more relevant experience.
Back to: 10 Ways to Fail at Outsourcing
However, all too often, despite every effort to choose the right partner, IT executives find themselves stuck in a nightmare. In the beginning all seems to be a honeymoon; low prices, qualified people, etc. but further into the relationship, once you are committed, suddenly everything changes.
Maybe it sounds repetitive, but focusing only in the price could be the biggest mistake ever. Besides cultural differences or time zone difference, the absence of relevant technical expertise has been a key factor in the failure of software development outsourcing.
Dean Davison – Vice President of Service Management Strategies at META Group writes in "The Hidden Costs of Offshore Outsourcing" offshore vendors often lack developer experience. On average, IT organizations going offshore will experience a 20 percent decline in application development efficiency during the first two years of a contract as a result of such differences”. We have clients that say they had productivity losses of 50% when they went offshore.
When building software products not only is experience, but also specialized knowledge is required. The right expertise can mean the difference between success and failure. The offshore vendor’s lack of experience represents a significant risk to the Client.
American companies have been struggling with the lack of technology knowledge and experience of offshore teams. We can assume that all offshore teams have been already trained in the common technologies (e.g. C#, .Net, Java, etc), but the truth is that most of the time they are trained at the client’s expense, without their knowledge. When coupling the rate of attrition with the growth rate of the company, it is fairly easy to see that experienced resources move up or move out and leave inexperienced resources in their place.
The most common areas where a team will have to be trained are:
• Cutting edge technologies
• Client’s development environment
• Client application architecture, design, tools, etc.
• Client specific domain knowledge
What does it mean?
When you partner with an outsource provider you may need to provide domain training in conjunction with project kickoffs. Some refer to it as knowledge transfer.
In many cases, the client’s team may go offshore to visit the offshore partner, and/or some senior members of the offshore team may need to come onsite to get up to speed. Either way, face to face meetings will facilitate collaboration between both parties. Be aware of the vendor that suggests their offshore team come onsite for months at a time. That suggests they have a lot to learn and there may be another partner out there with more relevant experience.
Back to: 10 Ways to Fail at Outsourcing
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