Global Software Development - OHJ
3 Credits
Coordinator
Prof Imed Hammouda
Topic
Outsourcing and Off shoring
Presentation By
Quote On Outsourcing
“ President Bush is on an eight-day tour of
Asia. He’s visiting American jobs.”
Basics
Off shoring Types
There are four basic types of offshore outsourcing:
ITO
information technology outsourcing BPO
business process outsourcing covers things like running call centers, processing insurance claims.
Software R&D
offshore software development KPO
Why To do
Money
On an average a software Project in US cost about 75 USD whereas if done in developing economies cost about 25 USD
Time
Reduce time to market by using difference between the time zones
Quality
This can be done via SLA (Service Level Agreement)
Performance
Directly proportional to Time and Quality
Risk Management
When to do
Unique Skills Required – High Level Skills
-
Compiler Development
-
Algorithm Development
-
Data Mining
Project Requirement – Temporary or Uncertain
- Introduce New Technology
- New Business Process
- New Prototype Development
Core Competency – difference
- Testing
How to Do
Deciding to outsource and what and where to outsource
By Strategic Level (By Meetings ,Discussion, Voting Etc)
Supplier Proposals
RFP issued to shortlist supplier
Supplier Competition
Face to Face meetings ,Interviews and Motivation Briefing
Negotiations
Contd…
Contract Finalization
SLA – a example of Call Centre SLA
ABA (Abandon Rate): Percentage of calls abandoned while waiting to be answered.
ASA (Average Speed to Answer): Average time (usually in seconds) it takes for a call to be answered by the service desk.
TSF (Time Service Factor): Percentage of calls answered within a definite timeframe, e.g. 80% in 20 seconds.
FCR (First Call Resolution): Percentage of incoming calls that can be resolved without the use of a callback, or without having the caller call back the helpdesk to finish resolving the case.
Uptime Agreements are another very common metric, often used for data services such as shared hosting, virtual private servers and dedicated servers. Common agreements include percentage of network uptime, power uptime, etc.
Transition
A transition phase involves movement of Services gradually from one place to another .
Execution
Starting of the services , example project implementation .
Termination or Renewal
Termination when terms and conditions of SLA are not followed .
Things to be considered Before Outsourcing
Cost: Few companies would outsource at all if doing so didn’t save them money. The cost factor, which includes compensation and wages, infrastructure cost, and tax and regulatory cost,
Risk: Every country possesses its own strengths and weaknesses, risks and rewards.
Geopolitical risk Includes stability of government, corruption,
geopolitics, security.
Human capital risk Includes quality of educational system, labor
pool, number of new IT graduates.
IT competency risk Includes project management skills, high-end
skills and competence (custom code writing, system writing, R&D, business process experience).
Economic risk Includes currency volatility, GDP growth. Legal risk Includes overall legislation, tax, intellectual property. Cultural risk Includes language compatibility, cultural affinities,
innovation, adaptability.
IT infrastructure risk Includes IT expenditure, quality of key access
infrastructure
Criticisms of Outsourcing
Public Opinion
Voice Against Outsourcing when they loose jobs
Organizational Complexity Increases
Increase in Organizational Complexity ,More the Outsourced work more the complexity in management and housekeeping.
Share Holder View
No Body cares about their opinion , in fact they too are the owner of company
Failure To Realize Business Value
Only Profit making idea overrides other features like Commitment and Loyalty
Quality Of Service
Contd..
QoS ?
Real QoS might not be possible to measure in service industry like Call Centers
Unequal Education Standards
US has 3 year Eng and Sci Degree + All institutes not equal
AUS has 3,4 Eng and Sci Degree and Associate Certificates + All institutes not equal INDIA has 3,4 year Eng and Sci Degree and Associate Certificates + All institutes not equal CHINA has 3 year Eng and Sci Degree + All institutes not equal ex HK and China
NOTE- A solution like ECTS , can add more transparency and equality among ASIA , US , AUS University education Level irrespective of Country's Economic Potential
Hidden Costs , Limited Transparency
Problems in GSD
Cultural Problems
– Asian (Ex Indian) and Western Company. Time Difference
– Mexico and Australia
Communication Problem
– Accents Difference of Non English Speaking Countries Job Hopping
– Skilled Force changes the job frequently thus creating an uncertainty in Project Difference in Approach
– Spiral or Orion Model not followed everywhere , different sites with their own model Data and Project Security
Solutions
Cultural Problems
Get Together , Kick Off meetings , Face to Face Meetings , Tours
Time Difference
E mail , Wiki
Communication Problem
Accent Problem via Training ,Other Problem – I M ,E mail usage
Job Hopping
Proper Screening during Recruitment ex Motivation , Devotion Timely Perks, Rewards and Accolades
Importance and Recognition of an Individual
Off shoring Countries
Some of the major countries/districts that provide such services are India ( Full Spectrum Services ),
Indonesia (Programming, Data Entry, Customer Support),
China (Programming), Philippine (Customer Support, Programming, Animation, Transcription), Russia (Programming and R&D),
Pakistan (Programming, Customer Support), Panama (Programming, Customer Support),
Bangladesh (Web & Software Programming, Offshore Outsourcing Service), Bulgaria (Programming and R&D),
Ukraine (Programming and R&D), Belarus (Programming, R&D), Romania (Programming and IT),
Philippines (Programming, R&D, Data Entry and Customer Support), Egypt (Customer Support and Programming),
Contd..
Large Scale Projects
India, China, Russia and, Pakistan are the four leading countries that currently
control the offshore programming market. According to Gartner Group, only
these four countries are capable of scaling up enough to meet the demands of
large scale projects
Medium and Small Scale Projects
Other offshore software development destinations include Vietnam,
Tier Concept in Outsourcing
India, offshore software development can be performed in all major cities and
regions of the country. The cities are categorized into Tier 1, Tier 2 and Tier 3
based on numerous factors as mentioned below:
Cities in India catering to software development
Tier Cities
Tier 1
Bangalore, Mumbai, New Delhi
Tier 1-1
Hyderabad, Chennai, Pune, NOIDA, Gurgaon, Navi Mumbai (New Bombay)
Tier 2
Kolkata, Mangalore, Ahmedabad, Bhopal,
Tier 3
Giving it a thought
+,Must For GSD +,Must For GSD +,Must For GSD in R&D
+,Must For GSD in R&D +,Must For GSD in R&D +,Must For GSD in R&D
Continues
Mostly Developing Countries
