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Managing Offshore Software Development Projects Presented by Orlando Moreno email: [email protected] Phone: 408.656.2498 web: http:// members.tripod.com/omoreno

Managing Offshore Projects

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Managing Offshore Software Development Projects

Presented by Orlando Moreno

email: [email protected]: 408.656.2498

web: http://members.tripod.com/omoreno

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What Is It• Offshore Development is the term most often used to

describe the outsourcing of software programming and engineering services to facilities located in foreign countries with lower labor costs

Offshore outsourcing is a viable sourcing option for IT departments

Early 90’s Mid to Late 90’s Present

Mundane work: mainframe

maintenance

Time critical: Y2K, re-

engineering

Business critical: sophisticated

new applications, integration

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Where Is It• India is the major player in offshore development

• Ireland, Israel, China, Philippines are also key players

• Russia has stepped onto the world stage as a source of highly skilled, low cost developers

Each generation of outsourcing countries has its own advantages and shortcomings

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Why Do It

• Execute projects at significantly lower cost

• Leverage large pool of highly skilled resources

• Accelerate project delivery schedule

• Reduce on-site contracting

• Ability to scale up/down quickly

Produce more and faster for less

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Why Not Do It

• Language nuances

• Cultural differences

• Geographical distance

• Time difference

It is not simple…

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Companies Doing It

• Intel, American Express, Lucent, Aetna, U.S. Healthcare, Compaq, General Motors, Home Depot, IBM, Microsoft, Motorola, Philips Semiconductors, Shell, Sprint, 3M, Sun Microsystems, Boeing, Northern Telecom, Target, Xerox, …

• Synxis, Videos.com, Smucker, The Principal Financial Group, Farmer's Insurance Group

And many more, and smaller ones too

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What they outsource

• R&D

• Development

• Maintenance

• Support

• Help Desk

• Operations

All kinds of projects and services

HighSize

Complexity

Low

High

OffshoreOffshore

In-House Simplify

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Should You Consider It

• Do you have a perfect need for offshore outsourcing? Tight budgets Not enough people Backlog of projects

Business is changing Competition demands agility Management expects delivery Technology is evolving

Maybe you should…

AND AT THE SAME TIME

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If You Decide To Do It

• Senior management buy-in

• Right offshore vendor/partner

• Win-win long term relationship

• Clear project scope and requirements

• Strong project management

• Well defined and documented processes

• Effective communication

Remember these success factors

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How To Select It• Define requirements for offshore outsourcing• Establish evaluation criteria• Research potential candidates• Identify initial list of candidates• Prepare RFP• Request proposals• Evaluate responses• Check references• Select short list of candidates for face-to-face meetings• Conduct vendor meetings• Visit vendors’ offshore development centers• Make final selection• Negotiate a win-win contract

Carefully, with all possible attention

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Evaluation criteria

• Are they a viable vendor/partner? capabilities and services, location, political stability, culture, size,

financials, references

• Do they have required delivery capabilities? staff skills and experience, resources availability and retention, ability

to ramp up, software development process, infrastructure, knowledge management, quality focus

• Is their pricing model competitive? fixed price vs. time-and-materials, offshore and onshore rates used for

estimations

Three major areas of assessment

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Relationship Models

Outsourcing individual projects

Offshore development center with dedicated resources

Joint venture with offshore

vendor

Wholly owned offshore

subsidiary

Benefits

Level of EngagementAdditional “bodies”

Start small, but think long term…

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Managing Vendor• Senior management champion is critical

• Separate vendor/contract management from project work

• Put in place an effective process to manage the relationship

• Require single point of contact from vendor

• Clearly define roles and responsibilities

• Start small, learn to work together

• Understand cultural differences

• Involve vendor in planning process

• Measure vendor performance

• Provide feedback

Establish win-win relationship

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Managing Projects• Assign dedicated project manager

• Require single point of contact from vendor

• Establish “one team”

• Maintain a positive environment

• Clearly define projects scope and requirements

• Follow well defined and documented processes

• Control scope

• Use appropriate collaboration tools

• Communicate, communicate, communicate

It is all about people…communication…and deliverables

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Offshore/Onsite Mix

Offshore

Onsite

More

More

Small team from the vendor

company is located at

customer’s site

Vendor’s project

manager is located at

customer’s site

Vendor does not have any

onsite presence

Development team is always offshore

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Offshore/Onsite Mix (cont.)

Onsite:

1. Planning

2. Analysis

7. User acceptance

8. Training

Offshore:

3. Design

4. Coding

5. Testing

6. Documentation

Implementation

Project management

ONE TEAM

All good project management practices apply…

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Q&A

Are you ready for offshore outsourcing ?