Abstract
There is concern in the Western world
that the surge of offshore outsourcing
IT projects to overseas locations in India is threatening jobs in
the IT workforce. There is also an interesting train of thought
that questions various issues with outsourcing and many of them
are rational. The contents of this page are intended to describe
how we address these issues and why outsourcing to Icreon makes
perfect business sense.
Introduction
Many Western companies are sizing up the benefits of outsourcing
their IT development to overseas countries with the view that it will
significantly decrease the cost of IT development. Outsourcing companies
have expanded rapidly in countries like India, who are considered
to have the Lion’s share of the outsourcing market. The outsourcing
surge began in the late 1990’s when the cost of IT development
in the Western World soared amidst the hype of the Internet. It is
true to say that the market at that point was not sustainable. People
were earning too much for knowing very little.
Issues & Resolutions
Lack of Face To Face Communication
Issue
The most effective form of communication is face to face. People can
use speech, facial gestures, gesticulate, draw pictures, and express
emotions. We can engage in dialogue and ask questions and respond
to each other. It is rich with signals to which we are all exceptionally
tuned. The next best form of communication is over the phone. It isn’t
great, but it is the next best. We lose all visual clues, ability
to gesticulate, and show expression. After the phone the next best
is pictures, and after that the written word. In outsourcing face
to face communication gets replaced by the written word which can
be heavily misinterpreted and is a much slower medium in which to
communicate understanding. If you outsource your development work
to a foreign country you lose the most effective form of communication
which inevitably slows you down.
Resolution
The answer to the above really lies with our clients and their comfort
levels (sometimes read budget allocations). If effectiveness is the
main criterion that drives communication and thereby, an IT project,
doing so through e-mails can prove very effective indeed. Written
communication is also much less arbitrary and certainly less prone
to errors. It is also a much more cohesive and tangible form of communication.
Even in a local environment, we strongly encourage documentation and
communication through e-mails. This helps both our clients and Icreon
to orient ourselves precisely to the proposed tasks at hand, both
immediate and otherwise.
However, having said that, outsourcing to Icreon does not imply ‘No
Visual Contact’. We utilize technologies and tools such as WebEx,
QuickBase, NetMeeting etc which not only makes visual contact possible
but also facilitates a whole lot of other rich features.
Click HERE for more details on Communication.
Additional documentation overhead
Issue
Because of the poor communication factor requirements need to be detailed
clearly in documentation which requires significantly more work than
if it was done locally using a lightweight approach. A considerable
amount of work needs to be done to ensure the written specifications
are water tight and understood. There is a balance between spending
time writing instructions for someone else to carry out correctly,
or just doing it yourself.
Resolution
A detailed document is not an alternative to good communication. It
is complementary. Yes, a considerable amount of work needs to be done
to ensure that the written specifications are crisp and clear. But
that is something that we recommend to all our clients - both native
and overseas. A 'lightweight' approach to a software development task
greatly magnifies the possibilities of errors.
The philosophy that goes behind any form
of offshore outsourcing, especially software
development outsourcing is that offshore IT development is a more
cost-effective option to take. If a client subscribes to that school
of thought, getting it done certainly makes more business sense.
Only a small part can be outsourced
Issue
The only part that is cheaper is the actual coding and unit testing
part. There is a great deal of work that needs to be done that cannot
be done overseas. For example: business analysis, system specification,
requirements specification, user acceptance testing, installation,
training and project management. The part that can be outsourced is
a small part of the project. The companies that provide offshore outsourcing
who live in the expensive economies also have to manage the project
themselves. The margins are thus very high to cater for the work they
need to do at their end and also to cover the risk of problems arising
in the project, particularly for fixed price work.
Resolution
Not true. At Icreon, when a customized project development task is
undertaken, the only thing that needs to be understood carefully and
correctly is the business logic of the proposed software. Icreon provides
all the inputs that go into making a successful software application.
Subsequent to our understanding of the business logic, we effectively
suggest corrective measures, improvements, enhancements, and subtle
variations in modifying business processes that prove to be more effective
and manageable.
We completely leave the choice of managing a project in the hands
of our clients. If our client requires managing the project from a
remote location, we make suitable arrangements to facilitate this
(Click
HERE). Conversely, if our client requires us to undertake
project management at a fulsome level (as is the case, most of the
time), Icreon performs this with ease and efficiency while ensuring
timely deliveries and maintaining crisp communication with our clients.
Questionable support
Issue
Longer term the support of the application is an issue. Can it be
supported in a cost effective manner from an overseas location in
a different time zone? Do you need to pay for support in this country?
What is the cost of handing over the code base to a local team?
Resolution
IT projects do not end with implementation. Support is an integral
part of our methodologies and indeed, one of our core values. A good
example to cite to counter the time-zone argument is our National
Geographic Channel project. We work across six time zones to keep
the NGC family of websites up and running.
Cost structures for any support are subjective. Support and Warranties
can be 'free' for certain durations for certain software development
projects, while attached to a price tag in others. Either way, costs
for support are arrived at after mutual consensus.
Handing over the code base to a local team is a breeze. Exact costs
of these are again, arrived at, subsequent to mutual consensus - however,
the costs of a customized software application along with the source
code could still be substantially lesser than what they would be in
a client's native country. |
