Thursday, 2 October 2008

The problems of going off-shore

The Register has an interesting poll on the “off-shoring backlash”. With my own experience of off-shoring, initially poorly due to our naivety/inexperience, then very successfully once we understood how to work offshore effectively, I can sympathise with most of the comments, such as:

“2 years of excuses, laziness, constant turnover (complete waste of training time when the guy/girl buggers off and leaves you with a new muppet).”

“This informal communication is completely lost when parts of a project are outsourced. Sending the same spec to another country to be evaluated by a developer who has never met the author and who must route all queries through an account manager just does not work”

This is no doubt that off-shoring can and does work, but only if it is done properly. Like any market, there are good off-shore suppliers, and bad off-shore suppliers – and both small and large off-shore suppliers can fit into each category. Staff turnover is a major problem for many off-shoring suppliers – in a good company, this should not be a major issue. The biggest issue is the management of risk – all too frequently, the off-shore supplier seeks to move to a “body shopping” contract where the deliverable is a number of “warm bodies” with minimal risk on the supplier, and most of the risk remaining with, or returning to the customer.

Not surprisingly there are also good and bad customers for off-shoring. First-time off-shorers can be the worst – their expectations seem to be sky high, soon to be brought down to earth by reputable suppliers – but then they are tempted by better financial offers from other suppliers who perhaps do not supply such good services – leading to a poor project, and the customer gets a bad experience of off-shoring. Another type of poor customer is one who has had a poor methodology in his IT operations to date (poor/non-existent documentation, poor statements of requirements, non-existent specifications, etc ...), and expects to continue in the same way when working off-shore – a 5,000 mile gap between customer and supplier will only accentuate the problems of this approach.

The Register’s articles, and most other commentators on off-shoring, agree that communication is the key to good off-shore projects. I absolutely agree with this – and it doesn’t necessarily have to be by putting staff face-to-face in each other’s countries (although this is one solution) – modern communications, and the use of relevant software development methodologies, together with splitting responsibilities properly between the on-shore and off-shore teams are also key.

However, it is also necessary for both customer and supplier to recognise that different types of projects need to be contracted and managed in different ways, and differently for different customers.

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