Over the past 10 years or so I have been more and more involved in the use and management of off shore resources. Companies in the US and Europe are looking for opportunities to save money by using resources in India, China and Eastern Europe. I have had the "pleasure" of leading teams in each of these locations and would like to share some of my thoughts and experiences on the topic.
Off shore resources are surely, from a purely dollars and cents perspective, less expensive to use. You can get a very low rate on resources especially in India and China. The challenge is that we don't generally look at the "loaded cost" of using these resources. Many factors must be included to assure that we do understand the true cost of resources prior to diving in.
First, what will it cost per off shore resource? As I stated earlier that is generally very manageable. Next we must look at what kind of management overhead the off shore team will take. This is where it gets a bit sticky. In my experience you will find excellent coders but not architects or business analysts off shore. This introduces cost on the US side of the ledger in management overhead. I think a real life example would be helpful here.
I ran a project using resources from China to develop an Account Open process for a customer portal. The project in the executive team's mind was very simple and clearly understood. "Everyone knows how to open an account on a portal and set up a credit profile", said one executive. So with my project assignment and a ticket to Beijing I was off.
As I started debriefing the team on the project and setting up the business process storys I became more and more concerned with the "glazed eyes" in the room. I started questioning in an attempt to check for understanding and found that I was in trouble!! You see they have no real sense of credit, credit reports, accounting 101 and the like in China. They are educated very differently than we are here, very technically focused.
I spent the next two weeks teaching basic double entry bookkeeping, credit profiles and reporting and credit authorization processes. I was able to relay the information to the team and get the project moving but it was two weeks that was not considered in the budget. There was no problem with their coding capabilities they just did not understand what they were coding or why.
The next major issue that needs to be addressed when using off shore resources is that you MUST understand that they will do EXACTLY what you tell them to do; not more. I have found that the ability to be creative thinkers is lacking. In both China and India they are extraordianary technical thinkers and in many way superior to us in the US. They simply don't think outside the box or even much about the box itself, just about what is inside of the box. Let me clear it up with an example.
I was managing a team in India to develop an enterprise application using ASP.net and C#. I gave the team business process flows, technical narrative documents, classified business terms documents, use cases and interaction diagrams as a starting point. I then had calls every other day with the team asking questions to check for understanding. "Yes we understand, we will take care of it." was the answer I continually got. When I got the first drop of the code I knew that I was in trouble. I take responsibility here for not being detailed enough in my documentation. I had to revisit all of the documentation that I provided and move from macro design to micro design in a big hurry. This introduced a significant cost that I had to eat as I could not pass it along to my customer. To my defense I found that they were not even reading the stuff that I had provided in the first round.
There are many more issues like the ones above that need to be addressed when using off shore resources. Would I do it again? YES. If you have a good leadership team and know where the pitfalls are you can really save a lot of money and deliver excellent products to your customers.
If you need a company to help you with your off shore project leadership give us a call.
John D. Sanders
http://www.seitmc.com/contact.aspx
Strategy Consulting | Application Development | Operational Support
Integrity is doing what is right when no one is looking. Character is what you are willing to stand up for when everyone is.
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