Getting it right: offshoring cases

Came across couple of recent articles on offshore successes.

The first a product engineering outsourcing case by Jeff Angus describes how eProject, a Seattle based SaaS provider of project management systems has had unabashed success partnering with an outsourcing firm located in the Ukraine and in Redmond, Wash.

"We went out and got references for offshoring partners. The qualifications we were looking for were unusual," says Chris Lynch, eProject's vice president of engineering. "We were looking for quality of work rather than lower costs ... I was hiring locally, so costs were budgeted," he says.

"Quality was always the biggest need. Our specs called for a partner that as technically competent and independent, [who] would tell us what they thought we were doing right or wrong, and who would function as an extended part of our team. We
wanted a peer who had enough expertise of their own to recommend content and coding techniques as well," Lynch explains.

Interestingly the article cites a recent Deloitte Consulting report on outsourcing that about 66 percent of projects fail to achieve most or even any of the benefits the client was aiming for, while 78 percent of buyers end up cutting the engagement short. Report also states that 70% surveyed stated cost savings as primary reason for outsourcing.

The article describes the key aspects of this case that made it a success. One of the primary that the right reason for outsourcing is not cost. It is amazing to see how many decisions to choose a vendor is primarily based on the pricing in today's outsourcing marketplace. Outsourcers are finding it difficult to differentiate between outsourcees and even though many are trying to focus on specific technologies or vertical industries.

The second case by Leonard Lobel describes best practices for ensuring a productive outsourcing experience. He gives tips on effective communication with an offshore team from personal experience.

Even though outsourcing has matured over the years, there is still a need for outsourcing companies to educate and guide their customers in the mode of engagement. The onus is on the outsourcing firms to learn from mistakes and help engagements succeed especially when it comes to outsourcers who are new to the model. At the same time, project managers in who outsource should also understand the quirks of offshore outsourcing and be prepared to manage the project in a manner geared for success.

It will be beneficial to see more workshops and training specific to offshore outsourcing engagements to help make them a success. I have not come across many that gives practical guidance to offshore outsourcing. This is an opportunity for consultants to offer such services.