Getting it right: offshoring cases

Came across couple of recent articles on offshore successes.

The first a product engineering outsourcing case by Jeff Angus describes how eProject, a Seattle based SaaS provider of project management systems has had unabashed success partnering with an outsourcing firm located in the Ukraine and in Redmond, Wash.

"We went out and got references for offshoring partners. The qualifications we were looking for were unusual," says Chris Lynch, eProject's vice president of engineering. "We were looking for quality of work rather than lower costs ... I was hiring locally, so costs were budgeted," he says.

"Quality was always the biggest need. Our specs called for a partner that as technically competent and independent, [who] would tell us what they thought we were doing right or wrong, and who would function as an extended part of our team. We
wanted a peer who had enough expertise of their own to recommend content and coding techniques as well," Lynch explains.

Interestingly the article cites a recent Deloitte Consulting report on outsourcing that about 66 percent of projects fail to achieve most or even any of the benefits the client was aiming for, while 78 percent of buyers end up cutting the engagement short. Report also states that 70% surveyed stated cost savings as primary reason for outsourcing.

The article describes the key aspects of this case that made it a success. One of the primary that the right reason for outsourcing is not cost. It is amazing to see how many decisions to choose a vendor is primarily based on the pricing in today's outsourcing marketplace. Outsourcers are finding it difficult to differentiate between outsourcees and even though many are trying to focus on specific technologies or vertical industries.

The second case by Leonard Lobel describes best practices for ensuring a productive outsourcing experience. He gives tips on effective communication with an offshore team from personal experience.

Even though outsourcing has matured over the years, there is still a need for outsourcing companies to educate and guide their customers in the mode of engagement. The onus is on the outsourcing firms to learn from mistakes and help engagements succeed especially when it comes to outsourcers who are new to the model. At the same time, project managers in who outsource should also understand the quirks of offshore outsourcing and be prepared to manage the project in a manner geared for success.

It will be beneficial to see more workshops and training specific to offshore outsourcing engagements to help make them a success. I have not come across many that gives practical guidance to offshore outsourcing. This is an opportunity for consultants to offer such services.

New Technology: Microsoft Surface

I'm sure you have see the new technology from Microsoft called 'Microsoft Surface'. This is the coolest innovative product to come out from Microsoft after Google and Apple started hogging the news with their innovations.

Microsoft Surface uses the HCI technology called multi-touch first popularised by Apple on its iPhone. Even though Apple beat them to the market with multi-touch, Microsoft's Surface is an innovative product that can open up a whole new market.



As a product engineering services provided when one sees a new technology like Surface, you start to think of applications for this technology. We have a role to play as a technology evangelist in understanding the applications of new technologies and demonstrating its usage to technology firms and eventually help integrate or bring new products based on new technologies. Offshore product engineering firms especially brings a key benefit to technology adoption in reducing the cost of technology adoption in the marketplace.

Open Source & Outsourcing

Continuing on the open source theme, here is a question for you.

How does open source play out in the outsourcing world?

• I think outsourcing companies have been delivering somewhat of an open source code to their customers for years. The offshore outsourcing companies delivered custom software and products to clients with source code on a work for hire basis. Of course it is not same as free open source software developed by a community. And the software is not open to the public. Neverthless I think it is close to the commercial open source movement at present. And a lot of times the rationale given by outsourcing companies, particilarly the offshore ones, for build vs buy was that they gave source code ownership to companies and delivered customer software at the same or lower cost as licensing. And this is still the model to a large extent in outsourcing.
  
  
• At the same time, open source is disruptive to the whole software industry and therefore can immediatly affect outsourcing firms especially in the product engineering space.
  
  
• Outsourced vendors & SIs offering IT solutions implementation and support services are likely to see more opportunities with open source adoption in enterprises. A number of companies have already taken up open source implementation and support services as a key growth area.
  
  
• There is also open outsourcing that can be a threat to outsourcing companies. Open outsoucing can eliminate the need for outsourcing companies again in the product development space.
  
  
• I see commercial open source as an opportunity for outsourcing firms to enter product space rather than being stuck being pure service firms. It is also an opportunity for outsourcers to give back to the community by participating and developing truly open source software free for all while continuing to grow their outsourcing services. Infact being an active participant in the open source community can be a key competitive advantage in the not so distant future.
  
  
• Product engineering outsourcing firms have been using open source software to and building/integrating them in to products and applications. One of the key factors to be aware of is the licensing issues associated with integrating open source code into products you deliver to clients. Read the licensing agreement for any open source code you decide to use and make sure your client is ok with the licensing agreement.
  
  
• Companies that makes commercial open source software are very sensitive to the licensing and copyright surrounding open source code they make available and therefore reluctant to outsource.
  

What say?