The Secrets of Their Success

10 tips from John Doucette and David Wood

1. Determine whether your IT organisation is ripe for outsourcing to India. A centralised application development and maintenance organisation is much easier to relocate than a dispersed one. 2. Decide what is strategic to your IT department, and hold on to it.

3. Sign on multiple vendors as a way to keep costs in check and to provide access to a variety of technical skills. 4. Keep a certain percentage of skilled developers in-house to monitor offshore service and rates.

5. If outsourcing to India is a long-term plan, develop a long-term relationship. Don't manage projects one at a time. 6. Be selective about the vendor's proposed project leader, and host him locally. Make sure he is empowered to make key decisions minus the red tape.

7. Spend a month creating a comprehensive transition plan, documenting the knowledge transfer process. 8. Establish rock-solid application development and maintenance processes.

9. Create a robust in-house QA department. 10. Insist that the vendor's account owner conduct monthly and quarterly reviews, and do the same in-house.

The Guardian View

The Guardian Life Insurance Company of America took a slightly different path in its Indian outsourcing endeavour.

United Technologies and its subsidiaries have worked out a successful strategy for sending IT work to India, but there is definitely more than one way to skin that cat. There are probably more like 50. For another angle on offshore outsourcing management, we talked to IT executives at The Guardian Life Insurance Company of America, a $US7.2 billion company.

When Guardian executive vice president and CIO Dennis Callahan began outsourcing to India two years ago, his goals were similar to those of UTC's CIO John Doucette: Replace high-priced local consultants, increase quality, expand the resource pool and retain control through vendor aggregation. And he had just as much experience in India as the people at UTC did.

But rather than begin in the piecemeal project-by-project fashion that UTC chose, Callahan dove right in, setting up a dedicated development centre of more than 100 people at Mumbai-based Patni Computer Systems. "Usually it's better to negotiate the first project and then get a master agreement in place that allows some flexibility. But today some companies are comfortable with setting up a dedicated centre right off the bat," says Marty McCaffrey, executive director of Software Outsourcing Research.