The Importance of Process

If you want to know how important Wood thinks application development and maintenance processes are to working well in India, all you have to do is listen. In the course of an hour-long discussion of offshore outsourcing, Wood uses the word process 48 times, sometimes up to four times in one sentence. "You cannot underestimate the importance of structuring and defining your processes, putting tools in place to measure the performance of those processes, and having processes in place to improve those processes," he says. Sounds simple, yet complicated. Which, Wood found out, it is.

Indian companies have spent years honing rigorous development methodologies, and many are certified Level Five, the highest level of Carnegie Mellon University's Capability Maturity Model (CMM). That means they've moved ad hoc, chaotic software processes (Level One, where the average company is) to mature, disciplined software processes that allow for continual improvement in quality. But the CMM level of your Indian vendor means nothing if it is not complementing similarly rigorous processes in-house. "The vendor can only operate, at the most, two levels higher than the customer," Meta Group's Davison explains. "If you continue to run at a Level One, the vendor will have to put more people on-site to compensate for your inadequacies, and they'll spend all of your savings."

Wood didn't begin investing in defining and implementing those all-important processes until the end of the transition phase, which was much too late. "It should have been the first thing we had done," Wood explains. "We should have had the basic processes well-thought-out, documented and understood by everyone before the team went offshore." If Otis's offshore development centre was larger - say, 200 people rather than 20 - that mistake would have been fatal; cost savings and quality would have been sacrificed completely, Wood says.

Also vital to a viable Indian outsourcing relationship is having robust quality assurance processes. "When you're outsourcing to India, you need the rigour in your QA organisation to be 10-fold over what it was before to make sure what gets built is what was agreed upon," Beaver says. That's something that's still being developed after the fact at Otis, according to Beaver, largely because skilled QA employees are tough to find.

Continuing to invest in the Indian outsourcing relationship on an ongoing basis in order to catch mistakes and improve processes is key. As it is, Wood is automating many of the new processes as well as the metrics to monitor them using software that captures and analyses data such as cycle times and defects. "It's one thing to have good processes in place, but if you don't have another process to constantly monitor and improve those processes, they will be out of date in a month," Wood says.

Even with the maturity of the Indian market, understanding the continuing high cost of ongoing management is important. "It costs a lot to keep a relationship alive and functioning properly, and that's the biggest challenge CIOs face right now," Davison says. "You do have to expect to pay some money going forward, usually 5 per cent to 7 per cent, just to keep it functional."