Jim Honerkamp, an outsourcing consultant in Cincinnati, says senior executives are quicker to use offshore resources than
IS staff. "The IT people really need convincing. They look at it as a control issue and see a possible threat to their positions,"
he says
Starting small is one way to build trust within the IS department and create a model for the right mix of onshore and offshore
development resources. In his former role as vice president and chief information officer at an Ohio door manufacturer, Honerkamp
started using Sierra Atlantic on discrete "Oracle housekeeping-type projects," the first being an upgrade from Oracle 10.7
single organization to multiorganization implementation. Sierra Atlantic is based in Fremont, Calif., but most of its development
staff is in India. "In general, it's best to start with self-contained projects like upgrades of technology, things that don't
require a lot of end-user interface issues," he says.
As organizations increase their use of offshore resources, they can use their experiences to help put in place project management
processes that can be reused and serve as guidelines for new projects. In addition, the most experienced offshore services
vendors have developed mature program management methodologies. Sierra Atlantic, for example, recently announced its nShore
methodology, which incorporates best-practices guidelines, project management software, and reusable code. For its part, Epam
plans to commercialize its own methodology, which LasVegas.com's Maccubbin uses on a daily basis to track how projects are
going .
"You can't just surrender your project and say, 'Tell us how it's going every four weeks,' " Maccubbin says.
Many users of offshore services also endorse service-level agreements, which can involve penalties for defects or missed deadlines.
"In the end, who cares what kind of methodology a provider has if he can't get the work done?" Honerkamp notes.
In addition, no matter how qualified the offshore provider is, an onsite project manager with good communications skills is
necessary for larger projects.
"You might have a project manager from the offshore provider who is an excellent business analyst, but he can't be shy about
going into people's offices and talking to them about how they do their business," Honerkamp said.
The Big Picture
The largest users of offshore resources need centralized program-management capabilities as well as a multilevel approach
to control of the development facilities. Cisco Systems started outsourcing software development to Indian companies in the
1990s. As it moved to high-end, core product development work in India, Cisco needed a new outsourcing model, and it set up
a wholly owned development subsidiary.
"Over time, we realized that there was much more value to doing work in India than mere cost savings," says Samu Devarajan,
managing director of Cisco's Indian subsidiary. In addition to a staff of about 600 employees at its facility, Cisco has approximately
2,400 people working on its projects at dedicated offshore development centers set up for the company by Indian software providers.
Ultimately, the benefit derived from offshore outsourcing by companies big and small, from mighty Cisco to midsize Hannaford,
is much the same.
As Cisco's Devarajan says, "We couldn't have done a quick ramp-up if we had to do everything in-house."
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