Outsourcing Software Development Offshore

The trend to offshore outsourcing is continuing at pace, with Gartner estimating that a quarter of all technology jobs will be based in low-cost countries such as India by 2008. These are the lessons learned from a year of offshore outsourcing.

When starting any offshore outsourcing venture:

1. Make an effort to understand the cultural issues
2. Concentrate a lot of effort on communication
3. Start small and build up, try a model office and when its working take it offshore
4. Pilot what you want to do
5. Expect work to take 2-3 times longer while you develop your processes
6. Don't underestimate the management effort required to make the venture work
7. Document your processes in detail and make sure everyone understands them
8. Involve the offshore team from the beginning of a project and in the planning process
9. Don't assume implicit understanding of "the way things are"
10. Make an effort to understand why things aren't working, don't assume you know

These are some of the other important findings:

1. Make sure you have strong project managers offshore. Indian developers are not good at managing themselves and grind to a halt if they do not have clear goals and objectives set for them
2. Expect around a 30 per cent staff churn. Loyalty does not seem strong and employees seem to have no compunction about going down the road for a few Rupees more
3. Almost all of the companies seem to exaggerate their capabilities and worry about it later. Do not take industry certification (Capability Maturity Model etc.) as a sign that they actually operate according to it. Agree in advance the processes and procedures necessary for your business
4. Don't be blinded by the claims of huge financial savings. Sure, the costs are low, but you will spend a lot managing the relationship and man managing the Indian resources remotely
5. Outsourcing is suitable for large well-defined projects. Do not consider it for smaller pieces of work it is not worth it
6. Do not put all your eggs in one basket. Keep some internal resource, you will need them believe me

Offshore outsourcing can work given the right conditions and plenty of forward planning, but don't be fooled into thinking it's a bed of roses. There are plenty of thorns on the way to success.