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The Challenge of Offshoring: Management |
So you've decided to build your own software . Now it's time to evaluate cost.
For coding, you'll find that it's significantly cheaper to outsource programming to developers in India, Russia or the Far East. Overall, however, offshore development efforts may end up costing more than keeping the work at home.
Dale Polekoff, director of IT at Jacob Stern & Sons, an agricultural products company in Santa Barbara, Calif., learned this lesson first-hand. This spring, Polekoff sent a small (sub-$5,000) development project for his ERP system to China.
Though the price was right, the project cost Polekoff several hours per day directing overseas developers on what to do and how to do it.
Equally expensive was the quality assurance procedure. Because of the language barrier, Polekoff had to give some directions two or three times to be clear.
"Sending smaller projects overseas, despite the great quality of work, is just not practical," he says. "I would do it again for the right project, but I think it'd have to be a more substantial project where I could spread some of the management over more development hours."
Peter Sterpe, senior analyst with Forrester Research, says these and other problems are common for CIOs who turn to offshoring for development work. Pertinent ramp-up questions should include: Who looks after offshore staff? Who manages them? How many insiders are necessary overall?
Another issue for CIOs who offshore is managing change at the partner overseas. Sterpe says he's spoken with some CIOs who have been victimized by turnover when nobody stepped up to train the new employees at the offshore site.
"There are a lot of variables when you send development work overseas," Sterpe says. "It's not necessarily a bad idea, but it's something a CIO must think through thoroughly before committing to it."
--MV
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3. Going Agile
Agile is a conceptual framework for software engineering projects that embraces and promotes evolutionary change throughout the lifecycle of a project. To veteran developers (and business-savvy CIOs), this strategy might seem like common sense. But the framework has created some controversy due to its lack of structure compared with traditional methods.
Most agile development methods attempt to minimize risk by developing software in short time frames called iterations, which typically last one to four weeks. Each of these iterations is like a miniature software project and includes all of the tasks necessary to release the mini-increment of new functionality: planning, requirements analysis, design coding, testing and documentation. While a particular iteration may not add enough functionality to warrant releasing the product, most agile projects result in the release of software at the conclusion of every minor milestone.
"Agile development refers to teams that are nimble, flexible and responsive to business needs, using a variety of iterative development processes," says Liz Barnett, principal analyst at EZ Insight in Bedford, N.Y., and editor of AgileJournal.com. "It's as much a philosophy as a way of life."
Technically speaking, the notion of agile software development refers to a specific set of processes that have evolved over the past 15 years and include Extreme Programming (XP), Scrum, Feature-Driven Development (FDD), Crystal, DSDM and Lean Software Development, to name a few. The Agile Alliance (www.agilealliance.org), a nonprofit organization created by the thought leaders behind most of the agile processes, promotes the "Agile Manifesto," which emphasizes a core set of values that all agile processes must follow, such as valuing individuals and interactions over processes.
Granted, agile isn't right for every project. Particularly with large development efforts that require an overarching structure to make sure everything gets done, the laid-back atmosphere of agile can lead to chaos. Barnett herself warns that because agile, by its nature, requires programmers to deliver frequently, this, too, can create problems for a development team that may be all-too accustomed to taking its sweet time. Still, Peter Sterpe, a senior analyst at Forrester, says the benefits of this framework far outweigh the potential negatives.
"Because agile shows working results quickly and frequently to stakeholders, you get a lot of benefits knowing if you're on track or off track sooner," he says. "If IT is all about delivering the code, it has to be code that meets the need and is truly on target and valuable for the business, and agile helps you get there with lower risk."
Matt Villano is a freelance writer living in Half Moon Bay, Calif. Write to him at editor@ciodecisions.com.
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