Other Concerns in Offshore Development
Other articles on this website address the specific concerns involved in selecting an outsourcing vendor while paying attention to the country and personnel issues, but there are many additional concerns. This article presents the most important issues that our business should address when considering offshore outsourcing. With early and thorough consideration, your company will maximize the benefits of outsourcing.
- Flexibility in the Work Environment: The teams working on your project need training and preparation, regardless of whether they’re working at your onshore facility or for the offshore vendor. Many onshore teams have misperceptions about outsourcing and those concerns must be addressed very early in the project. You must thoroughly prepare your personnel for the changes that lie ahead in their work environment and ease their fears.
- Cost-Benefit Analysis: Offshore software development can save your company significant costs, but probably not right away. Expect that it will take some time to fully realize the potential cost savings of outsourcing. Also, be aware of the costs that lie hidden in the evaluation and selection of a vendor, the transfer of your project overseas, your employees’ transition to a new way of working, potential layoffs of onshore employees, and the time spent managing the project and communicating with the offshore team.
- Relationship Building: It is unrealistic to expect that the offshore vendor will take your project and run with it without any further input from you. You need to build a strong businesses relationship with the selected vendor and appoint someone on your staff to manage the project and communication flows. This is the best way to improve communication and coordination between the onshore and offshore teams.
- Intellectual Property Rights: Make sure that outsourcing doesn’t make your business lose its invaluable proprietary and confidential business information. Insist that your trade secrets be bound by full confidentiality and shielded from misuses and abuse.
- Roles and Responsibilities: Clearly define the roles and responsibilities of the onshore and offshore teams before the work begins. Both your business and the offshore vendor must have clear policies and procedures for daily work, and clear guidelines about how that work will be evaluated.
Your business should also ask the following broad questions before beginning to outsource a project.
- For a given business function, should we outsource it entirely, or should we use a mixture of offshore and onshore capabilities?
- Should we contract one vendor or many vendors? If we choose to contract with many vendors, should they be based in one country or in many different places?
- Can we build a long-term relationship with one offshore vendor, or should we first proceed one project at a time?
Once your business has chosen an offshore vendor, developing an appropriate contract is critical. This agreement is known as an SLA (Service Level Agreement) and it clearly defines the scope of the work that the offshore vendor will perform, and when. It defines the deliverables and when they should be delivered, and helps to ensure that you and your vendor have the same goals in mind. Performance measurement techniques should be agreed to in advance in order to make sure that the final product is indeed what you are looking for. The greater the clarity of the SLA, the more likely it is that your project will succeed.
You should also consider the amount of the time that the contract should cover. Be sure to include not only the full anticipated length of the project, but also time for transition and contingencies for the specific type of services, delays in information gathering, and changes in the marketplace during the course of the project.
Your contract should also include assurances that the offshore vendor has all the necessary licenses to conduct business in the offshore company, as well as an insurance policy that would cover all potential losses. The contract should also establish a warranty for the quality, specifications, and ownership of the final product.
Orient Software’s delivery model is based on these and other key elements of an SLA and is a proven tool for maximizing the success of offshore outsourcing projects all over the world.