Fear, Uncertainty and DoubtOvercoming these in choosing an offshore QA & Testing

provider

April 23, 2008

Raja Neravati

Agenda

» Introduction» Why Outsource Testing?» Approach towards Outsourcing QA» Outsourcing – What to Look For?» Outsourcing – Check and Alignment» Strengths & weakness of Testing Providers» Evolving Country Decisions - Economics» Outsourcing QA - ROI Trends» Business Case» QA Shift in the Paradigm» Summary

Introduction

» We have not been successful in Outsourcing. We feel it is better to do in-house for better control & visibility.

» We have Global Roll-Outs which need significant co-ordination across various time zones. Outsourcing might not help in our scenario.

» There is lot of domain & business knowledge embedded into our systems. Outsourcing poses challenges; especially for QA.

» Outsourcing is more like a Risk-Reward Program. The higher risks, better are the returns.

» Outsourcing is a common practice and no brainier. What has changed of late?

Bottom Line – Outsourcing is a must. How to Outsource & Succeed?

» Reasons for Outsourcing Testing:

» Positively influence the bottom line

» Optimize & Gain Efficiencies

» Reduce Time-to-Market & Ability to Scale

» Lack of Professional Testing Expertise

» Improve Quality of Product

» Improve Customer Satisfaction

» Independent & Well-Defined Activity

» Improve the Behavioral Aspects of Development

Why Outsource Testing?

Approach towards Outsourcing QA

Four Stages of Outsourcing

» Beginner» Staff Augmentation

» Establish basic principles of QA

» Test the Results

» Intermediate» Outsource with onsite / offshore

model

» Improve QA Practices

» Develop basic governance models

» Gain Maturity in Outsourcing

C Client

VendorV

Beginner

C V

VC

C

C

C

C

C

C

V

V

V

V

V

Intermediate

Onsite Offshore

Approach towards Outsourcing QA

Four Stages of Outsourcing

» Advanced» Outsource projects – Low to High

Risk» Establishment of QMS» Measurement & Metrics established

» Sophisticated» Outsource all QA with Management

oversight» Explore Models like BOT, Global

Program Rollout, Multi-Sourced as applicable.

» Partnership Strategy – Win - Win Situation

C Client

VendorV

OffshoreOnsiteV

V

V

V

V

V

V

V

OnsiteOnsite

C

C

V

V

V

VA

dva

nced

V

V

V

V

V

V

V

V

V

V

V

VC

C

An example of

Sophisticated

Outsourcing with

Management

Oversight

» People» Cultural Challenges» Global Integration» Communication – Key Differentiator» Project Management Skills – Vast Differentiator

» Process» Governance & Engagement Models» Capability & Maturity» Metrics & Benchmarking» Flexibility» Test Data Protection & Privacy – Very

Important

» Tools» Expertise & Exposure» Partnership Alliances» COE & Frameworks» Open Source Adoption – Key ROI Factor

» Other» Immigration, Tax, Labor Laws

Outsourcing – What to look for?

» Does your provider have a Track Record with your type of testing ?» Approach on Manual vs. Automation Testing» Ability to provide a complete Quality Testing Framework (end-to-end)

» For example – Functional, Automation, Security, Performance, Consulting

» Expertise on the Tools you use

» Experience with companies like you» Based on the nature of your company (Product, Enterprise, ISV), check for similar

experience from Vendor» Domain Expertise matters: Knowledge of your industry, similar kind of applications,

business processes

» Flexibility in Adapting to your Processes» Check how flexible the vendor is to integrate with your development or release

models» Ability to influence the best practices without significant impact to your business –

Similar case studies

Outsourcing – Check & Alignment

Strengths and Weaknesses of Full-Service Providers

» Full-service providers bring a vast array of resources to bear» Most experience in testing, though not in standalone testing» Largest testing practices» More likely to have extensive domain knowledge

» But they simply aren’t as dedicated to testing » View testing as a market opportunity, not a core focus» Attract recruits who want to transition to other roles» Rotate staff in and out of their testing from other businesses

Strengths and Weaknesses of Test-only providers

» Niche providers attract people who really care about testing» Deep testing expertise and commitment to the space» Many have rolled their own testing tools and have built out

sophisticated testing facilities» Little to no danger of non-testers being assigned to your project» More experience with software and hardware product companies

» But niche providers bring fewer resources to the table» Unable to rotate resources from other parts of their business to meet

growing demand» Less global footprint in terms of resources – i.e. likely to have 2-3

locations rather than upwards of 6 resource centres worldwide

High

Low

Capabilities of Workforce• Wages • Education

Qualifications/Capabilities • Quality of work/Work ethic• Attrition Rates• Middle Management Talent

Location Attractiveness• Cultural Compatibility• Infrastructure

– Communication– Basic infrastructure

• Country risks• Time zone

attractiveness• Tax Incentives

Low High

Singapore

Hong Kong

Czech Canada

Australia

China

Philippines

Mexico

Ireland

India

Brazil

RussiaSouth Africa

Hungary

Costa Rica

Source: McKinsey, E-Business Strategies

Evolving Country Decision – Economics

Outsourcing QA - ROI Trends

Time 2000 - 08

# N

o.

of C

lient

s

Offshore Adoption

ROI – Monetary

Business Model – Focus on Labor

Arbitrage

Business Process – Focus on Integration &

Alignment

In-house

NetSavings

RiskContingency

ProjectCosts

ProjectCosts

RiskContingency

Net Savings

ProjectCosts

RiskContingency

Sav

ing

s

2000 Era - Savings up to 60%. 20% Allocated for

Contingency & Risk Mitigation

Savings & Contingency is almost equal. Major causes are due to increase in costs

Savings are possible only when you choose the right

Outsourcing Provider. “Zero realization of Contingency is

Key to Success”

Do it Right – The First Time !!!

Business Case : An example

QA – Shift in the Paradigm

» It is recognised that Testing, if done right, does have a positive business impact

» Testing has evolved & matured to influence SDLC as opposed to just be the tail end of SDLC.

» Technology Innovation, Tools & Processes has made Testing to be considered as a “The only Key to Success”

» Testing Industry is focused now towards Prevention vs. Detection

» Test Driven Development. Why write Tests First? Lean Principle – “Avoid Waste”

What has changed in QA over the past few years

Summary

» Move testing offshore incrementally - to suit the maturity of your organization

» Consider retaining some testers to work alongside developers

» Be careful in your selection of an offshore testing service provider

» Be careful while drafting your contract terms» Look for Risk Reward Programs» Incentive based pricing

» Multi-Sourcing and sourcing niche providers are the better models to succeed compared to outsourcing with a single “all services” vendor.

» Questions?» Write to marketing@applabs.com