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Common blunders in outsourcing
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All over the country—all over the globe, rather—offshore partnerships are on the rise, spurred by the chokingly tight IT labor market in the United States, the zero-time-to-market demands of the Internet economy, the promise of cost differentials that can go as high as 60 percent and, lastly, a sizable aggregate of high-level, midcareer IT executives with significant offshore experience under their belts. The quality of overseas labor is up at the same time the level of projects being moved offshore is becoming more sophisticated
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India remains the premier country of development. But Pakistan, Northern Ireland, Israel and Middle Eastern countries are all up-and-coming destinations of choice, in addition to Mexico, the Philippines and so-called near-shore facilities in the maritime provinces of Canada.
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Companies interested in investigating offshore opportunities must be able to tackle challenges in three areas: cultural, geographical and political. The very places where foreign development is hottest are also at times home to earthquakes, typhoons, floods and shaky infrastructures that can knock out communications and political instability. Companies working offshore must be willing to invest time and money in building processes to ensure proper project management, effectively evaluating and training personnel, and establishing meaningful metrics to make sure projects stay on track.
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To prevent your offshore projects from bobbing aimlessly on the high seas, or sinking in stormy weather, follow the golden rule of any outsourcing project: Don't assume anything, ever. Specifically, companies must pick their projects with care; spend an equal amount of consideration choosing the right offshore company with which to partner; commit to communicating early and often with their foreign counterparts; and come ready to invest in the relationship, both strategically and financially.
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Choose Your Projects Cautiously
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There is no longer any single type of project that companies deem more acceptable for travel offshore than high-level applications such as website design, and product-line enhancements now make the trip alongside the legacy-system maintenance and customer-service contracts that were initial candidates for outsourcing. But there are general characteristics that make a project more likely to succeed away from home.
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Clarity and containability are the two watchwords of choice. Consider projects that can be sharply defined and specified, and those that can easily be snapped out and back into the larger application—a particular concern because integration points are often a source of trouble and confusion.. Outsource those tasks that have a specific build-and-release cycle that doesn't require daily interaction between developers and Humana's own IS staff.
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Offshore projects work best when requirements are well-known and success is easily defined and understood. Onshore works better where the opposite is true: if you have an iterative development cycle or when the end point is a moving target. Onshore is also more expensive when it involves importing offshore talent. You will need to pay to bring developers over, for their [H1-B work] visa, their housing and board, and you pay a premium to entice the people to come here in the first place
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Pick Your Partner With Care
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Any successful offshore relationship must begin at home—in the corporation's home office. Remember If it won't work onsite, it won't work offsite ! On the flip side, some managers at some companies go onsite to evaluate working conditions and the strengths of the outsourcer's remote management team, which plays a critical role in keeping communications open and milestones met.
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With offshore companies in particular, workforce issues can be sensitive and politically charged because of local labor or cultural situations. Beyond basic social responsibilities lies a much more subtle but crucial element: corporate culture compatibility. In offshore partnerships, companies can be almost hyper- aware of ethnic cultural differences such as language barriers and differing work hours but can miss red flags that might point to significant problems later on. It can be pretty hard to pay attention to corporate culture at the outset and most PR companies don't want you to see the whole picture. One good litmus test is to determine how bad news is communicated or how problems are discussed. "What do they call bugs?" for example.
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Corporate culture is the biggest challenge, more so than regional culture or language. Simply being removed can exacerbate any differences in corporate culture. You have to be careful not to assume anything even when you think there shouldn't be a problem.
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Commit To Communicating Early And Often
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Offshore veterans recommend that companies use every technological tool at their disposal to keep the lines of communication as open as possible, including e-mail, fax, voice mail, teleconferencing, videoconferencing and even face-to-face meetings both at home and in the offshore location. Different people communicate in different ways. Some engineers are uncomfortable with videoconferencing, others like to see the other person's face.
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The goal in offering an array of communication options is to mimic the kind of bumped-into-you-in-the-hallway discussions that aren't possible when half the team is in India and the other half is in Chicago. Not only do frequent e-mails and videoconferences help build the team cohesion that is crucial to offshore success, they're an important way to pick up casual progress indicators that often don't come out in a formal meeting yet may be crucial to a project downstream.
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That said, formal meetings can't and shouldn't be ignored. In addition to capturing those water-cooler moments it is important to set a schedule of regular meetings between onshore and offshore workers, with the interval determined by the nature of the project and the employees' level of responsibility—engineers may need to conference call weekly, with marketing experts getting together once or twice a year for a longer, more in-depth planning session.
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With communication so crucial to the success of an offshore partnership, it's essential that organizations appoint a single person to act as a go-between, a manager who has a strong command of both the project at hand and the bigger goals of both companies. You need to have a project manager who can operate effectively in both worlds and it's important that person have authority and responsibility for the project in both places
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Anticipate and Accommodate Cultural differences
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Language differences would seem to be a natural first concern when sending work overseas, but in fact misunderstood work habits most frequently derail offshore arrangements. Even in countries that have what Americans consider to be a strong work ethic, hours are generally shorter and vacations longer and more frequent, and coworkers are more reluctant to receive calls afterhours or during the weekends. And while most international business travelers are already aware that handshaking, table manners and other staples of standard business interaction can unwittingly offend people of another culture, managers need to pay special heed to miscues that can have a direct impact on an overseas project.
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