offshore, outsource, and distributed team

University of Southern California

Center for Systems and Software Engineering

Offshore, Outsource, and Distributed Team

CS 577b Software Engineering II

Supannika Koolmanojwong



Outline

• Distributed Teams / virtual teams• IT Offshoring• Twenty practices for offshore sourcing• Offshore agile development

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Distributed Team

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Why distributed team?• Your employees will love it

– flexible hours, no commute, a personal work environment, friends & family

– especially “commute & cubicle” job• Hire great people wherever you find them• Use better communication tools

– A chat conversation can be archived, searchable, and visible to the entire team

– online collaboration tools, IRC, P2, yammer• Still be social

– Meetup every 6 months (hack week), hiking + 10 minute lightning talks

• Your offices will be more fun

4http://toni.org/2010/03/08/5-reasons-why-your-company-should-be-distributed/

http://toni.org/2010/03/08/5-reasons-why-your-company-should-be-distributed/



Challenges in distributed teams

• Failure to communicate and retain contextual information

• Unevenly distributed information• Difficulty communicating and understanding

the salience of information• Differences in speed of access to information• Difficulty interpreting the meaning of silence

5Anil Hashia , John Whelan , Ruchi Shewaramani An Innovative Approach to Managing Distributed Teams



Cross Cultural Communication metrics

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Small PDI means that subordinates participate more in decision-making activities

High IDV means that everybody has the right of his own opinion

High UAI means that everything needs to be carefully planned

Anil Hashia , John Whelan , Ruchi Shewaramani An Innovative Approach to Managing Distributed Teams



Best Practices in Distributed Teams: Communication

1. Communication should be in written form

Written communication helps avoidaccent/language issues and can bearchived for tracking purposes. Using tools

2. Create public forum for discussion

Brings diverse ideas and viewpoints to the project. Can be archived as a shared depository of project wisdom.

3. Avoid private discussions Private discussions obstruct teamconsensus and hinders development by creating gaps in communication.

4. Take advantage of the latesttechnology available

Collaboration tools are constantlyimproving and evolving. Encourage use of portals, wikis and blogs.




Best Practices in Distributed Teams: Management

1. Practice people exchange Send team members onsite for 4-6 weeks.For larger co-located teams, this is a greatway for building team morale and bridgingcultural gaps.

2. Consensus based conflict resolution

This works better than having an expertmake the final decision, unless it isnecessary.

3. Promote a sense of equality All team members should feel their input isimportant and equal to everyone else’s.Treat all members alike, irrespective oftheir location. Discourage favoritism.

4. Appreciate and reward good work Participation and involvement shoulddetermine status. Active participation is abetter way to measure someone’s abilities.

5. Participate in cross-culture training programs

understand and respect differentcultures.

6. Encourage people skills Working and reasoning on a personal levelallows people to interact more naturally.




Best Practices in Distributed Teams: Schedule

1. Regularly spaced deliverables

This helps determine if a team is on trackon a regular basis.

2. Release early, release often

Releasing early exposes bugs sooner andreleasing often allows you to fix themquickly. Working software is a goodmeasure of success.

3. Schedule all code reviews to be open

Code reviews should be open to everyonein the company.




Outline


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Outsourcing Trend in 20121. Sourcing Near Home

– Rural areas– Native government incentives– Domestic Sourcing

2. BRIC Surge

12http://www.outsourceoffshore.info/index.php/2011/12/outsourcing-trends-to-watch-for-in-2012/

• Brazil• Worldcup 2014• Olympics 2016

• Russia• India• China

• Malaysia• Mexico• South Africa• Romania• Bulgaria

http://www.outsourceoffshore.info/index.php/2011/12/outsourcing-trends-to-watch-for-in-2012/

http://www.outsourceoffshore.info/index.php/2011/12/outsourcing-trends-to-watch-for-in-2012/



Outsourcing Trend in 2012

3. Collaborative and Strategic– shift outsourcing from the back-office and into

additional customer-facing techniques4. Technology Convergence

– social networking, mobile platform5. Cloud Concerns

– cyber-security and risks of eco-terrorrism

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The Most Expected IT Outsourcing Trends in 2013

• Social Media Keeps Expanding Rapidly– connect customers through Facebook, LinkedIn, Google+

• Nearshore Becomes Closer– reduce costs, cultural similarity.

• Business Moves to Sky– Google Drive, Drop Box, ServiceNow, SkyDrive

• Enhanced Data Security– reliable firewall will become issue number one in outsourcing

• India and China Become Less Attractive for Outsourcing (Salary)– 10.7% for India and 8.8% for China

14http://www.qarea.com/articles/most-expected-it-outsourcing-trends-in-2013

http://www.qarea.com/articles/most-expected-it-outsourcing-trends-in-2013



IT Offshoring Davis, Gordon; Ein-Dor, Phillip; R. King, William; and Torkzadeh, Reza (2006) Journal of the

Association for Information Systems: Vol. 7: Iss. 1, Article 32.

2 types of offshoring• Outsource some of its activities to service

providers in other countries. – In this case, the service provider hires, trains, supervises,

and manages its personnel.– a contract specifies the services to be provided, as well

as time and quality measures• Set up service operations in the other countries

– managed as a remote service site. – Workers are hired, trained, supervised, and managed by

the organization rather than by an outside contractor

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6 popular offshore tasks1. Programming, software testing, and software maintenance; 2. IT research and development; 3. High-end jobs such as software architecture, product design,

project management, IT consulting, and business strategy; 4. Physical product manufacturing – semiconductors,

computer components, computers; 5. Business process outsourcing/IT Enabled Services –

insurance claim processing, medical billing, accounting, bookkeeping, medical transcription, digitization of engineering drawings, desktop publishing, and high-end IT enabled services such as financial analysis and reading of X-rays; and

6. Call centers and telemarketing.

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Nearshore

• Same continent offshoring• Becoming a more common trend, instead of

offshoring• US to Mexico and Canada• Eastern Europe to Western Europe

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Issues from Offshoring• 380,000 IT professionals are employed offshore

and will be more• 3.3 million service jobs could be lost to offshoring

in the next 15 years• by 2010, 102,000 IT and software jobs will have

been offshored from the UK =12% of today’s IT workforce

• 40% of Western Europe’s 500 largest firms have begun moving service operations offshore

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Benefits from offshoring

• Cost savings • Job upgrading for countries sending work

abroad, • Employment and income for the countries

performing the work

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Future of Outsourcing• International economics

– offshoring benefits everyone in the long run– Entire global system is better off when goods and

services are produced the most efficiently– Even countries that lose jobs can benefit if they innovate

• IT offshoring will still expand• Various HR activities will be outsourced• For US

– programming and systems development jobs in the US are being lost.

– new jobs focus on the management of vendor relationships and the customizing of externally-developed software.

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The Risks In Offshoring Information Technology Activities

• Compare to manufacturing jobs, IT activities may be less well understood and/or poorly documented by the client firm

• Hidden structural, cultural, legal, and financial risks and costs are often overlooked

• Deskilling the organization (will be able to maintain over time)

• Disruptions arising from political upheaval or war in an offshore host country

• Political stability risks of the offshores• Disaster recovery in the developing countries

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New tasks of the CIO • Monitoring an outsourcing contract -legal

requirements• Managing accuracy and completion risks

associated with offshoring• Managing the database and application software

risks – configuration management• Managing knowledge required for systems –

documentation, back ups, training• Considering a distributed computing solution

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Skills needed to manage offshoring

• Relationship and contract management– client-vendor relationship; selecting a vendor, outsourcing

contract, monitoring of progress, control exerted over the vendor, level of trust

• Risk assessment and management– from political risk, to risks of natural disasters;

infrastructure, transportation, back up sites. • Technology assessment and monitoring

– Maturity of the technology, standards• Systems implementation and integration

– learn the skills that are necessary to perform these tasks with lesser levels of outside help

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Skills needed to manage offshoring

• Business Process Redesign– analysis and modeling skills must reside in internal

function ?• Integrated business and IS planning

– Strategic IS planning should never be outsourced• Mission-critical systems development and testing

– Retain in-house; clients often wish to perform their own post-delivery testing

• Security

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Twenty practices for offshore sourcingRottman, J., and Lacity, M. "Twenty Practices for Offshore Sourcing," MIS Quarterly Executive (3:3), 2004,

pp.117-130.

• Offshore market size : $10- to $30-billion by 2005• Controversy

– Stealing domestic jobs / Cut down bonus – Improving US economy

• 2003 – $36,000 service job went abroad = 0.25% of US IT jobs (worth $130,000 in US)

• Cost saving 10-50% from offshoring, 68% -quality improvement

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Risks of offshore projects

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Risks of offshore projects

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Outline


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Offshore agile development Be Prepared

Daily scrums via Skype, standards and infrastructure Start Small

Small team, small chunk, small timebox Consider a Hybrid Model Manage Actively

Not totally hands-off, intervene when necessary Invest in Onsite Training

Bring people over, learn the process Pick the Right Partner Account for Time Zones

327 tips to offshore agile development : Computer News Middle East, ISSN 1564-0078, 10/2012

http://usc.summon.serialssolutions.com/link/0/eLvHCXMwY2BQMEtJTDO1MDMEZZ0kQ9NEY4tEMxPQwSdpxiZGSYlJKFujeRCFk5sog6yba4izhy6ocIwvgBy3EA_scBuA-tqmhmIMLMA-cSoAf3MXmw






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