Offshoring development services

Zuchathai

Software Product Development has obtained an edge by Offshoring development services. Offshoring such services increases the responsibility of Product management and Software Development. In order to ensure efficiency and feasibility of the processes and to deliver a customized product, testing and quality assurance checks are conducted. Apart from testing an important task is often overlooked, that is, documentation of software design for future maintenance and enhancement. What are the other aspects in Offshore Software Product Development that need attention in order to leverage quality and reduce time to market? Please suggest.

Berserker

Has product development obtained an edge by offshoring development services? I can give you plenty of examples where offshoring has failed and companies have ended up spending a fortune getting software departments up and in running back here in Ireland. Aside from the issues with documentation, code quality, the need to have full time developers here babysitting offshore developers (it ended up being their/my full time job) and testing, the biggest barriers were cultural by nature. I'm working for a company that is trying to re-build it's development team here in Ireland after many unsuccessful and costly attempts to make it work.

smacl

Berserker wrote: »

Has product development obtained an edge by offshoring development services?

I think it depends very much on the type of service. For high-end niche development I think that it is very much the way to go, where you can avail of a world-wide skill set that is unobtainable locally. As a cost cutting measure, it is highly questionable, as to work you need to have excellent local QA, typically specifying testing and acceptance criteria prior to commencing coding along with good code review on delivery. If you already have these kinds of skills in-house, chances are you already have an efficient development team. If not, off-shoring is liable to be a disaster with reduced upfront costs slaughtered by ongoing maintenance costs. In my opinion, off-shoring can work well or short sharp projects with limited scope but is not a good basis for product development.

Berserker

smacl wrote: »

If you already have these kinds of skills in-house, chances are you already have an efficient development team. If not, off-shoring is liable to be a disaster with reduced upfront costs slaughtered by ongoing maintenance costs.

Bang on. The software development managers I dealt with often viewed offshore resources as a mechanism to resolve issues within their existing development processes, ways to save money or as a way to speed up software development. If your development process is not rock solid, in the area of testing and requirement gathering in particular, off-shoring is going to be a struggle.

My current employer linked up with a company which had unlimited I.T. resources, with the belief that they were going to get major releases every two weeks. Ended up getting bits of software released every few weeks which never met their requirements and they failed to understand the challenges that working over different time zones would bring also. The manager here seemed to think that he could bully the existing development team into being available 24/7 to support the offshore teams. Most of them left (all but one) and he had to hire in a bunch of expensive daily rate contractors, from the same outsourcing firm (win-win for them), to keep the show on the road. One permanent member of staff, poor fecker, is still here and we've advised him to ask for a huge salary increase in his upcoming review, given the position he is in.

Agree 100% that it's a good option if you need specialist skills that you are going to struggle to get here.

devlinio

Please don't.

My previous company did this. They offshored to India. They got cheap work initially, but it ended up being so buggy, they spent more paying on wages for their Irish based developers to fix it, then the client was paying. I think they lost 8-10K on that project, as they had to hire a dedicated developer just to manage that site.

They will never outsource work again. Everything is to be done inhouse.

Franz Von Peppercorn

If you are going to offshore then you should interview all candidates rather than allow a company to send you untested people.

14ned

devlinio wrote: »

My previous company did this. They offshored to India. They got cheap work initially, but it ended up being so buggy, they spent more paying on wages for their Irish based developers to fix it, then the client was paying. I think they lost 8-10K on that project, as they had to hire a dedicated developer just to manage that site.

India does provide world class offshoring, but its cost is about 90-95% of a team over here. That can still work out well, they have much deeper pools of readily available talent than over here, but the key point is that it's not going to save you money directly. Cost will be the same, but indirect costs such as not being able to find developers with exact skillsets you need may be avoided.

Trying to do development cheap gets you cheap development.

Niall

L.Jenkins

I see too many companies doing this nowadays. The company I work for does it and I'd prefer if we didn't. The language barrier itself is troublesome and all too often leads to miscommunication.

We have 2 separate teams working on a system providing different functionality and it's a nightmare, as both are usually in conflict with each other code wise, which has caused too many breaks in the system.

dotsman

Zuchathai wrote: »

Software Product Development has obtained an edge by Offshoring development services.

What crock. I've never seen a single example of this. Time and time again it is a disaster. At best, it is a slightly more expensive, frustrating experience. Usually it is a hugely more expensive process with $hite quality and delivery.

Oh, and I currently work for a company that sells "offshore development"!

beauf

Zuchathai wrote: »

....Please suggest.

I think this might be homework. Certainly a College mindset.

MyPeopleDrankTheSoup

beauf wrote: »

I think this might be homework. Certainly a College mindset.

i assumed he was just going to plug his indian offshoring company in his second post

Buford T Justice

beauf wrote: »

I think this might be homework. Certainly a College mindset.

Sounds like a college question

odyssey06

Interesting reading:
https://economictimes.indiatimes.com/tech/ites/cognizant-sued-by-us-client-over-implementation-issues/articleshow/68515641.cms

WiproNSE was sued by client National Grid and it paid $75 million to settle the case in 2018. In 2016, Tata Consultancy Services paid $26 million to settle a case with US district Orange County.

BrokenArrows

Our company setup a large development office in India about 5 years ago and it has been a success.

The difference is that the team was initially managed locally by a management team who already worked for the company for many years and agreed to relocate for a few years until they had everything running smoothly.

By having experienced managers already in place to hire local talent they dictated the office environment and the type of person who worked for the team.

Anyone who didn't work well with the existing teams across Europe and the US was let go and they hired someone else. Pure English was a requirement in all communication while at work, written and spoken. Not the English/Hindi combo that most Indian teams communicate in.

After a few years the result is a highly efficient team working out of India who are well integrated with the existing teams around the world and you cant really tell the difference of where the code came from apart from the names on the repository checkins.

Now that the team is established its just a matter of the higher level management keeping an eye on the remote team to make sure they stay aligned with the company policies and ethics etc and long term it will save money. Short team it obviously cost a lot of money to setup and get right.

Keeping an eye on the team ethics are a big MUST. India has a lot of cultural problems and minor corruption is wide spread. Regular audits of the team and promotions are a MUST. We had a local manager their "hire" a receptionist who turned out to be his wife and never actually went to work. Another case of friends being promoted without having anywhere near the required skillset and in office bullying due to caste system discrimination. These issues were quickly identified through regular audits and harshly punished.

moycullen14

BrokenArrows wrote: »

Our company setup a large development office in India about 5 years ago and it has been a success.

The difference is that the team was initially managed locally by a management team who already worked for the company for many years and agreed to relocate for a few years until they had everything running smoothly.

By having experienced managers already in place to hire local talent they dictated the office environment and the type of person who worked for the team.

Anyone who didn't work well with the existing teams across Europe and the US was let go and they hired someone else. Pure English was a requirement in all communication while at work, written and spoken. Not the English/Hindi combo that most Indian teams communicate in.

After a few years the result is a highly efficient team working out of India who are well integrated with the existing teams around the world and you cant really tell the difference of where the code came from apart from the names on the repository checkins.

Now that the team is established its just a matter of the higher level management keeping an eye on the remote team to make sure they stay aligned with the company policies and ethics etc and long term it will save money. Short team it obviously cost a lot of money to setup and get right.

Keeping an eye on the team ethics are a big MUST. India has a lot of cultural problems and minor corruption is wide spread. Regular audits of the team and promotions are a MUST. We had a local manager their "hire" a receptionist who turned out to be his wife and never actually went to work. Another case of friends being promoted without having anywhere near the required skillset and in office bullying due to caste system discrimination. These issues were quickly identified through regular audits and harshly punished.

So, why did the company do it? It seems that it is only a success because of a serious amount of effort and management. As you say, managing the cultural differences - never mind the geographic and time differences - is not trivial.

If you factor in all the costs - direct and indirect - is it much of a saving? Or was there another reason for doing it?

The whole issue of 'auditing' seems like a huge management overhead.

Not having a go, genuinely interested

beauf

This I assume.

BrokenArrows wrote: »

....and long term it will save money. Short team it obviously cost a lot of money to setup and get right....

The only issue is it requires a higher level of on going support than the alternative. That may be the weak link at some point.

moycullen14

beauf wrote: »

This I assume.



The only issue is it requires a higher level of on going support than the alternative. That may be the weak link at some point.

In my experience, the financial analysis rarely goes beyond 'developer here = $100 per hour, India = $50 per hour => India better'

The hidden costs are rarely factored in and are frequently huge.

There is no shortage of IT talent anywhere. What there is, is a shortage of talented, experienced IT professionals willing to work for low money. Cheap beer syndrome.

Berserker

moycullen14 wrote: »

In my experience, the financial analysis rarely goes beyond 'developer here = $100 per hour, India = $50 per hour => India better'

Coupled with the line that the Indian guys will get things done faster and they'll work harder. The offshore devs we work with spend more time watching cricket than working.

moycullen14 wrote: »

There is no shortage of IT talent anywhere. What there is, is a shortage of talented, experienced IT professionals willing to work for low money. Cheap beer syndrome.

Yep, one of my ex-employers contacted me last week, asking if I knew of any PSEs in .Net who were on the lookout for work. Asked them to give me some more information about the position, as I left there seven years ago. Turns out their max salary is €70K. Good look finding a PSE for that kind of money.

14ned

moycullen14 wrote: »

So, why did the company do it? It seems that it is only a success because of a serious amount of effort and management. As you say, managing the cultural differences - never mind the geographic and time differences - is not trivial.

If you factor in all the costs - direct and indirect - is it much of a saving? Or was there another reason for doing it?

The whole issue of 'auditing' seems like a huge management overhead.

Not having a go, genuinely interested

To quote myself earlier in the thread with added highlighted parts:

India does provide world class offshoring, but its cost is about 90-95% of a team over here. That can still work out well, they have much deeper pools of readily available talent than over here, but the key point is that it's not going to save you money directly. Cost will be the same, but indirect costs such as not being able to find developers with exact skillsets you need may be avoided.

The key to making offshoring, to any country, a success is to not cut direct costs. Only do it to cut indirect costs, if those have been identified as a business critical problem.

I am a good example of successful offshoring . My new employer is in the heart of Wall Street, and they simply cannot find the specific skillset they need anywhere in all of New York for any money at all. It became a sufficient threat to their business they had to go global to find very specialist needs, and hence picked up my good self.

Now, all that said, they are paying a discount for me if I were onsite in New York. I didn't push the negotiations perhaps as hard as I could have done. I was mindful that it was dreadful hassle for them to employ me, I figured they were due a discount for that.

Niall

BrokenArrows

moycullen14 wrote: »

So, why did the company do it? It seems that it is only a success because of a serious amount of effort and management. As you say, managing the cultural differences - never mind the geographic and time differences - is not trivial.

If you factor in all the costs - direct and indirect - is it much of a saving? Or was there another reason for doing it?

The whole issue of 'auditing' seems like a huge management overhead.

Not having a go, genuinely interested

It was done as a cost saving measure. Im not privy to the specifics of how much they expected to save. Maybe they even expected to be able to make some redundancies along the way, but they havent done that yet.

We were scheduled to take on a lot more work in the following years so they decided to go offshore rather than ramp up employment in Europe or the US.

Employee's salaries in the US are far higher than in Europe never mind India.
And in Europe employment costs are far higher than the base salary paid to an employee once you take into account employer tax contributions, pensions, sick leave, holidays, standard benefits like health insurance etc etc.

Then you have to take into account infrastructure costs. How much does it cost to have an employee sitting at a desk? I dont know for certain, but i assume that the cost of office space in India is significantly less than in Europe or US.
All our offices are pretty full, so the quantity of developers they hired they would have needed to get another building anyway if they wanted them all in the same place.

A quick google estimates that in the UK a 60k employee actually costs the company in the region of 120k after everything is taken into account.

14ned

BrokenArrows wrote: »

A quick google estimates that in the UK a 60k employee actually costs the company in the region of 120k after everything is taken into account.

A senior software engineer in C++ doing ordinary work as a fully remote contractor has had the going rate of around US$120k for 44-46 weeks of work annually for as long as I can remember. That's a gross rate, before all taxes, and would obviously enough not include office provision.

I might add that that pay rate is the same globally. It doesn't matter where you live. A friend of mine was earning that sunning himself on the beaches in Bali. Very nice.

Niall