Expecting huge cost savings right at the beginning

It is surprising that a lot of companies offshoring their software development needs expect huge cost savings right at the very beginning and get disappointed when they see the reality. Yes, offshoring surely helps you see the arbitrage advantage but not immediately as you expected. It takes time.

What people fail to consider is the learning curve of the offshore vendor to become as productive as expected. It might be two to four months before an offshore team can become as productive as an onsite team and sometimes even more depending on the complexity of the project.

The time and effort spent on transferring the knowledge to the offshore vendor is seldom taken into consideration. Companies might witness a 20% decline in productivity as to what is expected, in the initial stages, primarily because of the time spent on knowledge transfer.

Companies should also take into account, things that are not in their control like employee turnover, which affect the time spent on transferring the knowledge and training the new ones, which in turn again affects the productivity.

An ideal budget should cover for the learning curve & knowledge transfer and also the other indirect costs involved.

Offshoring is definitely a cost saving option but you won’t see enormous savings overnight. It takes time and you will see the real benefits of offshoring only over a period of time and you could be surprised how much you could be benefitted from offshoring on a long term. With improvements in the process & methods over long term, you will see the cost savings and quality of service delivered reach greater heights.

 

Misconception of the Cultural Gap

If language is the only thing that comes to your mind when you think of the cultural gap that will crop up while dealing with an offshore vendor, then you ought to do some more research before going into offshoring.

Culture is a much broader and complex term than just language and communication is not just being able to converse in good English. In fact, you will find a lot of offshore vendors being as good as the native speakers in their command of the language. With people being exposed to a lot of English content, speaking good English is not an issue that you will see very often in businesses.

But just because you don’t see any problem conversing with the offshore vendors in English doesn’t mean, your ride will be smooth.

Culture as I said is not just about language but include acceptable norms and behavior, gestures etc. Without proper understanding of the culture, things could go wrong so easily. How people react to what’s been said differs from your culture. Even a small gesture could mean different things. You might have cracked a good joke during the course of a phone conversation but sometimes you might not get a great response from the other end. Doesn’t mean they meant to offend you, it’s just that they didn’t catch your joke.

Unspoken assumptions are an issue that you might come across quite often. A lot of developers, especially the junior ones might never question you back during the calls. You shouldn’t assume that they have understood everything. They might not have clearly understood the requirement or they might have had some doubts but still remained silent just because their manager was there with them. Also you are more likely to hear ‘Yes’ for a lot of your questions and never a ‘No’, though that might not be the real case. Give them the freedom to express themselves and always encourage them to question you.

Always make sure the offshore vendor has clearly understood everything, be it a requirement or a task or a briefing, especially if it’s a one sided call. It’s only fair that you expect the offshore vendor to understand your culture. At the same time, there’s nothing wrong in trying to learn a few things about their culture as well, it could only benefit you.

 

Starting off with bigger projects in offshoring

Okay, you have decided to offshore your software development needs and have also zeroed in on an offshore vendor. What then? How will you start giving out your works? What is the ideal method to start off with?

Starting off with critical and big projects is a mistake that you should avoid. The problem with offshoring a critical project is any hiccups or issues arising might directly affect your current business operations and bigger projects will incur you big costs and losses, in case the offshoring company were to fail you.

Always start off with a small, simple and non critical project when offshoring. This gives you the time to put all the critical elements in place and make them work smoother. It gives you a fair idea of how this works, to get the common issues sorted out and how to best utilize the offshore vendor to your benefit. Once you have built a rapport with the offshore vendor and as your trust grows on them, move on to bigger and critical projects. Now that you have a better hold over all the process, you and the offshore vendor both will be more confident of developing bigger projects.

 

Tags: Offshore Software Development, Offshoring, Software Development | Comments Off

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