Companies face significant challenges when outsourcing development work offshore. For example, they must ensure that the offshore workers possess adequate technical skills, that outsourcing firms retain qualified workers, and that projects sent overseas present minimal risk to the organization, according to a panel of experts at the IBM Rational Software Development Conference 2007 in the US.
Cisco Systems has struggled with the attrition of workers at outsourcing firms in India, Israel and China that develop software for the firm, said Jan Roberts, Cisco's senior director of its Central Engineering Tools & Services group.
The successful companies . . . have taken second-tier projects and experimented with those being offshored first. Then [they have] gone across with their largest projects
Cisco first used outsourcing firms to supplement teams in the US, she said, but found that the attrition rate was "terrible". After that, she said, Cisco sent core projects overseas, so that developers at outsourcing firms "don't feel like we are giving them work we don't want to do". Since then, she said, the attrition rate has been cut significantly.
The company now is struggling to ensure that its intellectual property is protected in projects sent to outsourcing firms in China, Roberts added. Cisco, based in the US, is working to create an automated process of separating key pieces to ensure it is not sent overseas, she said.
The IT operation at Pitney Bowes, in the US, has long outsourced the bulk of its work overseas, said Nanette Brown, director of architecture and quality management at the manufacturer of mail and postage equipment. On the other hand, she added that the company's product developers use offshore firms more as an extension of domestic, internal teams.
To help streamline communication between the internal developers in the US and those at outsourcing firms offshore, Pitney Bowes relies heavily on IBM Rational's ClearCase version control tool, Rational ClearQuest defect tracking software and a home grown test management tool, she said.
"Those three tools have very tightly defined workflows, [and] by using them it enables us to feel like we have a little bit more control, more insight," she said. "It gives both sides of the organization a common vocabulary so we are all doing things the same way."
Brown noted that Pitney Bowes is finding that its outsourcing partners are having a difficult time retaining top developers, who often opt to take on project management roles after a few years writing code, Brown added. The company is aiming to help its partners forge a career path where workers stay hands on in development for longer, she added.
Dave Lubanko, principal consultant at Rational, noted that many companies struggle to decide when to send a project to offshore developers. New projects can be more difficult to manage, while sending mature software for updates could adversely impact quality, he noted.
"The successful companies . . . have taken second-tier projects and experimented with those being offshored first. Then [they have] gone across with their largest projects," he said. "The bulk of the companies keep testing close to their quality organization, and their development goes offshore."
Daniel Sabbah, Rational's general manager, said that Rational takes that tactic when it sends work to outsourcing firms offshore. The company will first send a firm projects at the back end of the lifecycle and then slowly — over three to five years — send them projects that require a deeper understanding of the lifecycle.
"[Overseas workers] start having to understand the products themselves without being overstressed in trying to innovate at the same time," he said. "You want a sense of ownership at the end of the day."
But, Lubanko added, regardless of the type of work companies opt to send offshore, they should expect to wait six to 12 months to begin to see a return on the investment.
The panellists agreed that it is important to devise metrics to measure the performance of overseas workers, but Brown noted that managers must tread carefully when interpreting the metrics.
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