Offshoring, offshore outsourcing, of IT Services continues to be the focus of attention in business and technology management circles. While business leaders and IT executives debate on the merits and strategic implications of offshoring, technologists and Project Managers continue to focus on trends and technologies to address the changing needs of businesses, and ensure that the systems are maintained to satisfy user needs. Offshoring of Application Development and Maintenance [ADM] involves extending the best practices of Software Development Life Cycle [SDLC] and Project Management to address the challenges of time and space, and coordination of onsite and offshore teams.
While researching topics for my forthcoming book², I studied several offshoring initiatives and interviewed academics and experts from the field, and discovered that while there is a lot of attention being focused on the strategic aspects, there is some nebulousness when it comes to the actual how-to of offshoring. Large Businesses follow several paths towards offshoring, and may typically adopt a top-down or a bottom-up approach. Some organizations follow a bottom-up approach by allowing individual IT divisions and groups to try outsourcing at individual project and program levels before formulating and organizational strategy. Such an approach may lead to an informal tutoring of a few internal offshoring experts, essentially managers who learn the intricacies of sourcing on-the-job by contracting a few projects to offshore vendors. Over a period of time, such internal experts may be called in to provide inputs to other project teams and groups. A few large organizations have begun to articulate their corporate sourcing strategy formally; such top-down strategies may be bundled with their overall IT planning which they roll out to the different Line of Business units. Managers from the planning group may form a part of a Program Management Office [PMO] and may have formal authority to define and articulate an organization-wide offshoring strategy.
Regardless of the sourcing strategy, managers and IT architects are beginning to scan the landscape for best practices. Several large IT vendors have also begun to position their proprietary offshore management practices 'Global Delivery Models,' 'Development follows the sun,' '24 X 7 delivery,' 'Strategic Outsourcing,' and 'offshore outsourcing models' as solutions to such operational challenges. The models adopted by service delivery vendors and other offshoring organizations derive from the published Body of Knowledge3 of project management and the SDLC. Best practices of globalization, internationalization and managing the workflow of teams and group dynamics also extend into such models.
The book, as the title suggests, attempts to examine at some of the management imperatives of offshoring with a specific emphasis on managing and executing projects and initiatives using an Offshoring Management Framework [OMF]. The Framework, while taking a vendor neutral stance, borrows extensively from publicly available sources including articles, whitepapers and corporate websites. The framework is focused on four key areas: Governance, Management, Execution and Communication.
Typical executive challenges of sourcing include defining a strategy, managing the transition and the steady state. The Governance Layer of the Framework addresses challenges faced by executives of both the offshoring and the vendor organizations. In the governance layer we also address aspects pertaining to SLAs, managing transition offshore and Program Management. Projects are typically self contained work effort targeted at solving specific problems, and in an offshoring context, the smallest unit of work that may be sourced. Challenges of managing communication account for a large proportion of a manager's time and effort. It is then not surprising that tools and techniques of communication including emerging technologies to facilitate remote collaboration and team development are the highlight of any sourcing strategy. The Communication Layer of the Framework focuses on the challenges of communicating across geographic and cultural boundaries. Intricacies of managing the actual workflow of tasks, technology development and translating the business requirements will be highlighted in the Project Execution Layer of the Framework.
Offshore outsourcing is increasingly being viewed as a strategic practice of sourcing software systems to low-cost offshore locations. Managing IT projects and development is distinct from management of projects in other business verticals due to the strong artistic engineering focus that cannot be decoupled from the process orientation. Added to this is the challenge that stems from the debate over whether application software development is engineering or an art A debate that was stirred over three-and-half-decades ago by Donald Knuth4. IT managers generally attempt to take a middle ground as they bridge the gap between the business and functional domains and technologists; this is perhaps the sweet spot at the intersection of business needs and technical challenges where Technology Managers add the maximum value. The realization of business objectives and requirements by ensuring that the application development efforts are synchronized towards building a software solution is perhaps the raison d'etre of technology offshoring.
End Note: Solutions and Frameworks that can facilitate the operations are gaining prominence. Although offshoring is a strategic decision, the actual tasks involved in outsourcing project and delivery excellence are tactical; therefore managers and technical architects need to learn the intricacies of managing offshored projects.
- Although the author is a Senior Project Manager with a large Offshoring services company, the views expressed in this article are his personally. He may be contacted at [email protected]
- The author has abstracted key ideas in this column from his forthcoming book "Offshoring IT Services: A Framework for Managing Outsourced Projects" due for publication in May/June 2005. [An abstract can be found online at http://www.offshoringmanagement.com]
- The Project Management Institute (PMI®), a premier professional body dedicated to the study of emerging practices, has developed an extensive collection of best practices, also called A Guide to the Project Management Body of Knowledge (PMBOK® Guide).
- "The Art of Computer Programming" [Donald Knuth]