2021 GUIDEA holistic view on raising the success levelof strategic offshore software outsourcing

ENLAB SOFTWARE

You can find us at:www.enlabsoftware.cominfo@enlabsoftware.com+84 983757506

I N S I D EWHAT 'S

0 4 INTRODUCTION

0 8 STRATEGIC OUTSOURCING

1 0 PREPARATION

2 2 CONTRACTS, SLA, NDA

2 7 IMPLEMENTATION

3 3 RELATIONSHIP MANAGEMENT

3 8 RISK MANAGEMENT

4 1 CONCLUSION

For a long time, software outsourcing has been around as the most crucial businesspractice to undertake software projects efficiently and affordably overseas. It gainspopularity by a wide range of benefits, including encouraging a business to focus oncore competencies, improving business efficiency, reducing time to market,increasing the ability to scale, and significantly saving cost. Many tech giantcompanies like Whatsapp, Slack, Github, Upwork, Transfer Wise, to name a few, setthe inspiring examples for their phenomenal successes based on outsourcingdevelopment in their initial days.

However, we can not ignore that the outsourcing process is hugely complex andinvolves many moving parts. It means that it heavily depends on the right peoplewith the right technologies and the right fit between different business cultures, at areasonable cost. Obviously, we come to outsourcing for cost reduction, but thisshould not merely be a matter of the lowest price. With the wrong choice ofoutsourcing suppliers, you could be in trouble with implementation issues, suppliertransitions, and eventually, the failure in business objectives.

The risk of software outsourcing is real and potential. Fortunately, it often comesfrom inadequate knowledge and research into the outsourcing process. So in thisblog, we will move into line with the whole software outsourcing lifecycle to improveyour probability of success and put you on the right path from the first steps,especially in offshore software outsourcing. Later on, with your ongoing practice,you could confidently move from tactical to strategic offshore outsourcing toleverage the prospective global talent access with the most cost-effective andtime-efficient manners.

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INTRODUCTION

Why offshore software outsourcing?

What to outsource?

When to outsource to offshore countries?

When software outsourcing puts you in a risky position?

Part I.

More and more emerging countries become promisingdestinations. We must name a few like Vietnam,Malaysia, Indonesia, Philippines… besides the famousoptions like India, China. Engineers in these countriescould bring their high level of programming expertise tothe table with the cost reduction could be up to 80%.You will get no hassle of recruiting and training, no costof infrastructure, and overhead expenses. Everything iscontrolled from the contract phase, including projectspecifications, conditions, deliverables, and the cost.

There is always more to learn and new developments inthe offshore software outsourcing industry. And it needsyou to equip yourself with knowledge and skills tomanage this implementation and relationship.

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Part I . INTRODUCTION

Why offshore softwareoutsourcing?

What to outsource?It's the case when you have a demand for customsoftware or applications for the sake of internal usage orcommercial purpose that your company does not havethe capacity and resources to get done.

Before moving to the whole lifecycle of an outsourcingprocess, it's worth quickly briefing the foundation ofoffshore software outsourcing if it is your first time.

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Part I . INTRODUCTION

When to outsource to offshore countries?Limited budgetOne of the main reasons for a business to come to outsourceis that they can not afford to set up their development team inhouse or even outsourcing to other providers in theircountries. It happens more often in developed countrieswhere developers' salaries are not a fraction of the cost. Atthis time, you could tap into the global talent pool to kick yourproject off cost-effectively.

Limited internal technical resourcesWhen your development team in-house already works attheir full capacity, and you still have an entire backlog ofless-important tasks that need to get done. It's whereyou can keep your high-profile jobs for your core teamand outsource the other ones for the offshore team totake advantage of the round-the-clock strategy.

Programming is not your expertiseIt's often the issue of non-tech startups, newlyestablished, and micro-small businesses. Hiring andrunning an in-house development team is a risky decisionwith high operating costs. Now, you need a softwaredevelopment consulting firm to utilize their expertise forproduct development and put you in the focus of yourcore business tasks like penetrate markets, monetizeyour products or services.

When your intellectual property is the mostcritical asset of your business, you may bein a risky position if you collaborate with anunethical software team.

Most great development vendors focus onproviding good code to clients and fall shortwhen you need them to do research. So donot outsource tasks that needcomprehensive analysis and intuitivebusiness sense to make the decision.

Despite the enormous benefits of outsourcing,as I mentioned above, you need to considerseveral cases below that may put you at criticalrisks if you hire untrustworthy foreign softwareproviders.

These cases still work if you meet idealsoftware providers that share the same valuesand ownerships. So it's vital to select the rightvendor from the early days.

When software outsourcingputs you in a risky position?

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Part I . INTRODUCTION

STRATEGIC

OUTSOURCING

Part II.

Outsourcing relationships should be a strategic and long-term partnership rather than a temporary solution thatsimply delegates duties to a third party.

Part 2: STRATEGIC OUTSOURCING Part II. STRATEGIC OUTSOURCING

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So how do you turn all these objectives into actions? Let'sgo over the whole process of outsourcing below.

High performance in quality, timeline, and budget.

A healthy relationship with high compatibility incommunication and business culture.

Long-term collaboration for maintenance andscale-up.

The expectation of an ideal partnership could be:

PREPARATION

Part III.

Set up the outsourcing strategy and holistic plan

Select outsourcing destinations

Identify proficient and compatible outsourcing partners

According to SourceSeek's 2017Global Software Services Report,12% of outsourcing failures comefrom a lack of unclear goals andobjectives.

First, to navigate the right directionand the right mindset for any relatedparties, start with your organization'sdemand. You should preciselyidentify where you are, what youwant to create, what skillset you arelooking for, the internal gap you wantto fill in, and how much yourorganization is ready foroutsourcing. From that point, setclear objectives and expectations foryour short term and long-term planof outsourcing.

Second, depending on the projectrequirements, supervision level,process workflow, privacy degree,quality standards, prior outsourcingexperience, and product vision, youneed to choose a proper outsourcingengagement model that leveragesdifferent engagement and innovationlevels for different phases.

Six different types of collaborationframeworks facilitate tactical orstrategic engagements.

1 1

Part III. PREPARATION

Set up the outsourcing strategy and holistic plan

S T A F F A U G M E N T A T I O N

P R O J E C T - B A S E D M O D E L

D E D I C A T E D T E A M

In this model, the outsourcing vendor will help you manage the whole softwaredevelopment life cycle and suggest proper technical solutions. All you have toconcern about is keeping track of the end delivery and focusing on your corecompetencies. It provides the outsourcing vendor more space and flexibility to planand execute, which allows you to leverage their technical and domain expertisewhile making the most of their innovation and contribution. This model works wellwhen your project requirements are not likely to change during the developmentprocess.

This model is the optimal solution for extending your existing in-house team withoutsourcing developers in record time. It gives you full control of your productionplan and moves in line with deliverable plans. One more thing, it produces fewerpotential risks such as privacy. In contrast, it needs your high involvement in projectmanagement and creates a low level of innovation and vendor sense of ownership.

STAFF AUGMENTATION

PROJECT-BASED MODEL

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Tactical Engagement Models

Part III. PREPARATION

This model is a group of hand-picked developers on-demand for your project. Italso allows you to control the production plan thoroughly, but you don't have toworry about people management and process quality. It maintains a high degreeof control and fosters a higher level of software outsourcing vendors'responsibility.

DEDICATED TEAM

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Strategic Engagement Models

S T R A T E G I C C O N S U L T A N C Y

O F F S H O R E D E V E L O P M E N T C E N T E R

O F F S H O R E D E V E L O P M E N T S E R V I C E 2 . 0

OFFSHORE DEVELOPMENT CENTER

ODC is an extension of a dedicated team when the business involves differentprojects and activities like product development, legacy modernization, andmaintenance, testing services... After a happy collaboration through severalsmall projects, the tactical outsourcing relationship could turn into a strategicpartnership. Clients manage project planning, and outsourcing vendorsmanage the development center staff.

Part III. PREPARATION

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This model is the most innovative engagement model where the vendor holds theresponsibility for designing and co-creating, and releasing products. From then,they continue product optimization and sustainability. This way, you could leveragethe maximum capacity from outsourcing vendors. And of course, this modelrequires a high maturity level of vendor expertise and the maturity of the mutualrelationship.

PRODUCT DEVELOPMENT SERVICE 2.0

This value-based engagement model sets the outsourcing vendor as the strategicpartner to support your digital transformation journey. It often includes all aspectsof people, process, and technology with a strong influence on client decisionmaking.

S T R A T E G I C C O N S U L T A N C Y

The six kinds of engagement models above provide you a picture of setting up therelationship with offshore software providers. Based on your project characteristicsat each phase and the relationship maturity level, you could choose the suitableone and gradually move from tactical to strategic models.

Part III. PREPARATION

According to Accelerance, working withoffshore vendors can save you up to 75%of your overall development cost.

Finding the right balance between therate, time zone overlap, and yourreadiness to tap global talents with yourbudget to choose the country you wantto outsource. There are always goodcompanies within even moderateoutsourcing countries regarding theEnglish fluency and culture gap, and wecould identify and resolve theseconcerns when screening outsourcingpartners.

Next, narrow down your selection fromcountries to trustworthy partners in thatcountry.

The next step is determining whereto outsource. Distances will not be anissue because we currently havedifferent communication means likevideo conference and messagingtools, email, project managementtools, document sharing tools, toname a few, to connect seamlessly.But various destinations will result indifferent experiences in terms of therate, time zone overlap, Englishfluency, and cultural differences.

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Select outsourcing destinations

Part III. PREPARATION

Read also: The comparison betweenoutsourcing rates of several countries.

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This step could be one of the most critical parts of the outsourcing cycle toensure you choose the right partner and afford less for a long learning curve.

Typically, you may have a long list of potential partners via personal reference,internet search, third-party consultation. Next, conducting a comprehensivescreening process on your own to identify which vendor you want to work withand overcome the temptation of master sales.

Identify proficient and compatibleoutsourcing partners

Part III. PREPARATION

01 COMPANY BACKGROUND

02 HUMAN RESOURCES

03 PRICING

04 INTELLECTUAL PROPERTY

Below is our checklist that helps you coverseveral critical aspects of an outsourcingpartner judgment.

Companies with a large team size and are operating for at least five years on the marketcould prove their stability, credibility, and resilience in front of economic fluctuations orcrises.

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Company size and the established year

Each company specializes in several project scopes. Choosing the one with their scopespecialization will facilitate their best works and their best quotations.

Project scope

The tech stack and qualifications matching with your software demand bring you thenext steps. Discover how deep, how well, how long have they been in thosetechnologies to make sure your partner is the specialist of their areas. Some clientswould love working with outsourcing partners with several technologies in theirprofile to approach the solutions from different angles effectively.

Technical expertise and qualifications

Notably, the outsourcing partners with your domain and industry experience have ashort learning curve and promise to provide add-on values to your software products.

Industry and domain experience

Check their references from third parties like Clutch or get their client contactinformation to double-check just in case.

Client references

C O M P A N Y B A C K G R O U N D0 1 .

The well-defined software development processes, methodologies, and codingstandards expose their partner's professional level. Clarify the illusion of the industryglossaries. For example, if your partner talks about Agile, DevOps, clean code. Ask forwhat it means in their company?

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Process and methodology

Make sure your partner could handle the timezone overlap or set up the meeting withinyour working hours.

Time zone flexibility

Low English proficiency could be one of the critical boundaries that outsourcing tooffshore countries fail, so make sure your partner could clearly understand theproject requirements and have a proper conversational level. Besides, looking fortheir transparency, openness, and directivity in their communication style. The toolsfor communication and project management would help a lot.

Communication skills

Check out their client profiles to see whether they have experience working withWestern clients or, ideally, previous clients from your country. When examining yourpartner's portfolio, you should look for indicators of consistent, high-qualityperformance over time.

Western client portfolios

C O M P A N Y B A C K G R O U N D0 1 .

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Ideal teams are a mix of senior, mid-level,and junior engineers. A team with alljuniors will not be productive andnegatively impact the bottom line quality.In contrast, a team with all seniors androckstars will be very costly and hidepotential teamwork issues.

The culture fit should happen at bothcompany and nation levels. It could bethe catalyst to help communicationand collaboration smoothly. The wayyour partner operates their daily basicdefines their development culture andhow well they fit yours. And a healthyenvironment with excellent valuescould expose their level of credibilityand human retention.

At the country level, you must learnthe cultural signals that describe howthey think and behave.

Experienced resources

Let dive a little bit deeper into how theyrecruit, interview, and retain their talents.A consistent, dedicated team will maintainyour consistent deliverables withoutwasting double efforts on training andtransitioning.

Recruitment process and retention strategy

Company culture and national culture

H U M A N R E S O U R C E S0 2 .

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Rates for different levels and positions

The quotation should go along with Work Breakdown Structure (WBS) for dividingprojects into milestones and elements and Critical Path Analysis (CPA) forsequencing tasks and activities. It gives you the big pictures and the whole scopewith tasks, team composition, and budget. It enables accurate judgment on yourpartner quotation and avoids "scope creep."

Quotation

Each region /country has each own range of rates, so you could easily find anyabnormally higher or lower pricing to make the decision. Again, don't just look for thelowest rates, but consider the rate together with other factors in companybackground and human resources categories. When you receive attractive lowrates, you should be doubtful about what you have to trade-offs such as lessseniority in development, less QA, or less English competency… which of them areacceptable to you and which not.

P R I C I N G0 3 .

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Protecting your intellectual property is common, but over-protecting will limit yourpartner's capability. For example, with strict access to your environment, thedevelopers could take 2-3 hours to investigate a bug that generally takes 30 mins.Examine which practices and policies your partner has done so far with other projectsand encourage them to share their thoughts. Then determine the right exposure ofyour IP for your project characteristics.

Intellectual Property

I N T E L L E C T U A L P R O P E R T Y0 4 .

With the checklist above, you could put your partner list inrange and score them to find the best fit partner.

After interviewing and screening your partner, you couldcarefully consider one pilot iteration to dig deeper into yourpartner's capabilities before making an informed decision.

Read also: Discover several interview questions to screen andidentify the right partner for your outsourcing.

CONTRACTS , SLA, NDA

Part IV.

Contracts

Service Level Agreement (SLA)

Non-Disclosure Agreement (NDA)

and Non-Compete Agreement

Next, move to the contract phase. An ideal contract should show an accurate pictureof the development progress, mitigate the sloppy code behind a workable software,and cover all emerging issues with proposed solutions that might happen in thefuture.

You could refer to several factors needed to be covered when dealing with thecontract phase:

Project Scope

You could consider making paymentsmonthly, quarterly, or based on theproject's major milestones.

Outline the deliverables based on thelist of features/user stories andtimeline/iteration, broken down inWBS and CPA. It is essential tomotivate the team to deliver the bestproduct rather than merely meeting adeadline.

Payment milestone

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Clearly state the duration and whatitems your partner supports you aftertheir delivery.

Maintenance and support

Make sure you have completeownership of your intellectualproperty. It should prevent yourbusiness from a sudden terminationwithout access to source codes andmodification controls. It also helpsprevent the outsourcing firm fromreusing your codes for any possiblecompetitors in the future.

Intellectual property rights

Part IV. CONTRACTS, SLA, NDA

Contracts

This clause addresses the risk responsibility-sharing and state who pays the legal fee and anylawsuit that emerges in the future.

Indemnity

Code quality

The contract should include the agreement ofcoding standards.

Part IV. CONTRACTS, SLA, NDA

Termination clause

Clearly state the actions that need to be taken,not only when the project goes successful butalso when the project fails to reach completion.

As software outsourcing is a global businesspractice, it's critical to mention the jurisdictionand the law covering any dispute.

Jurisdiction for resolution of issues

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A contract is defined as an agreement upon service provided, duration, cost,resources, approaches, assumptions, and several other aspects listed above;SLA would focus on performance management and service quality. An SLA alsoincludes penalties when the project fails to meet the deadline and reinforcementwhen the development process goes faster than the predefined schedule.

From our perspective, a high-value contract should be associated with a separateSLA document so that you could revise SLA more often without editing thecontract. Typically, a contract would last for years, but SLA could be reviewedquarterly. It helps relieve the burden of reviewing contracts too often.

Service Level Agreements

Cover the scope of the project

Performance standards

Financial implication

Problem correction and iteration

Enhancement of applications

Specified obligations

Monitoring and analysis

Source: Classic Informatics

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Service Level Agreement (SLA)

Part IV. CONTRACTS, SLA, NDA

Non Disclosure Agreement

Obligation

Confidential Information

Restritctions on Use / Disclosure

Permitted Disclosures

Non-Competition / Non - solicitation

Terms

No Warranties / As - Is

Remedies for Breach

Dispute Resolution

Boilerplate and Language

Part IV. CONTRACTS, SLA, NDA

We should make sure the reasonable efforts of NDA negotiations are addressed.Also, make sure that the company and every developer involved in the project alsosign the agreement.

Non-Disclosure Agreement (NDA) and Non-Compete Agreement

Source: Best Practices for Non-Disclosure Agreements - Chris Neumeyer

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Several critical elements of an NDA are included as below:

IMPLEMENTATION

Part V.

Onboarding process

Project management

Measurement framework

A well-defined onboarding process is the starting point to give project clarity, agreeon a common course of action, set mutual expectations, and set the tone for a trust-based relationship.

Depending on the project complexity, the onboarding process could be tailoreddifferently, but it all starts with a kick-off meeting. There are several critical partsthat should be discussed in the meeting agenda below agenda:

Onboarding process

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Introduce the team structure, roles, office time.

Introduce the overall project context, business logic, project scope, project

roadmap, and release plan.

Discuss the tech stack, design, architecture.

Discuss source code repository, cloud platforms, hosting, and environments for

development, testing, and production.

Discuss communication channels and frequencies.

Address the expected performance and quality standards.

Address time zone differences and agree on specific working hours.

Build a product backlog with user stories for several first sprints.

Hand-over necessary documents and manuals.

Take security precautions.

Part V. IMPLEMENTATION

Part V. IMPLEMENTATION

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Typically, ideal governance includes consistent management, clear guidance,standard process, healthy decision making, which cover three layers:

Operational: Day-to-day activities typically related to daily technical issues,member capacity, and other low-level issues.

Managerial: Delivery tracking & reporting, deployment, client success.

Relational: Invoicing, and contract and agreement amendments, businessalignment, solutions for high-level issues that go beyond operational scopes.

Project management

Regarding the two first layers of management, Agile management is proposed asthe best one among methodologies to adapt to changes in software developmentprojects and enable the highest level of collaboration even during the mostchallenging implementation issues.

Typically, as soon as the contract is signed, the developers are expected to startcoding right away. However, projects with high complexity levels will need"Sprint 0" that may last from several days to a couple of weeks before starting.

Through discussion, you could encourage the outsourcing development team togive their feedback from their business domain experience and figure out allpotential scenarios that need to be covered. This collaboration could fosterownership and accountability from 2 parties and make everyone on the samepage.

Adopt continuous integration to eliminate the emerging integration issues shortly.

Use test scripts to clarify the requirements further.

Use short iteration and regular builds to facilitate direct and instant feedback fromthe client.

Leverage different communication tools to eliminate offshore communicationdrawbacks, for example, wikis, project management tools, issue tracking tools, IM,video conferencing…

Part V. IMPLEMENTATION

But the fact is, while regular communication is placed at the heart of Agiledevelopment, offshore outsourcing makes communication harder due to thedistance and time zone differences. To improve these drawbacks, you couldleverage several practices below:

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The typical approach of Agile software development is: clarify goals, thinkcreatively, communicate continuously, move cautiously, celebrate, and learncollectively.

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People talk much about the "watermelon" effect in software outsourcing, whereeverything is green on the outside and red inside. That's why it's critical to set up abroad measurement framework that includes a mix of current metrics and leadingmetrics that allow early warning of issues before they become major incidents.

Measurement framework

Based on the initial strategy and plan, you develop a set of monitoring metricsrelated to delivery, code quality, and business metrics to quickly identify when youare off the track and make the adjustments as soon as possible. In this article'sscope, we focus on two technical aspects: Code quality and Delivery performance.

Code quality

Code quality is ambiguous, but to put it simply, it contains two fundamentalcharacteristics for a high-quality code: readability and maintainability.

Before starting a project, a document of all coding standards should be preparedby either you or your offshore company that sets out your expectations. Includeearly and small code review in your iterations and establish a comprehensivequality assurance process. Regularly mention your expectations about the qualityof your applications.

Obviously, it's tough to sacrifice your timeline and budget for some vaguemeasurement, especially when you are a startup with limited resources. But when itcomes to time and cost, we should be realistic. It means that the upper chargecould appear later on for maintenance, modification, or even building your productfrom scratch when you need to scale up. So it's worth understanding the dilemmaof software development and allowing the development team time to maintain theircode quality.

Part V. IMPLEMENTATION

Next, it's worth spending your time thinking about your software product vision inthe long term thoroughly. It helps your offshore developers to identify the fittingsystem architecture and structure in the first place. From that point, they couldunderstand what the code is using, how different modules work with each other,their structure, how it will be tested, debugged, and deployed...

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Change Lead Time

Deployment Frequency

Change Failure Rate

Mean Time to Restore (MTTR)

Delivery performance

These days, DevOps practices continue to gain popularity. It is the critical driver forfast and reliable software delivery. In the Codefresh survey, budgets for DevOpsefforts increase in 2020. 74% of organizations expect DevOps spending to increasethis year.

According to Nicole Dorgren Ph.D., Jez Humble, and Gene Kim, the co-authors of thebook: Accelerate - The Science of Lean Software and DevOps - Building and ScalingHigh Performing Technology Organizations, there are four metrics to measuresoftware delivery performance and make the most of the benefits of DevOps team:

RELATIONSHIP

MANAGEMENT

Part VI.

On-going relationship management

Communication and cultural differences

Maintaining the effectiveness of outsourcingrelationships and turning a client-vendorrelationship into a strategic outsourcing partnershiprequires enormous effort and responsibility fromboth sides: the client and the outsourcing vendor. Inthis relationship, trust plays a critical role infacilitating the success of strategic partnerships.

The fact that many outsourcing relationships fallshort after the engagement kicks off in the realworld. “In our experience, there is good intent at thebeginning of the program, but as people get back totheir day jobs, the focus goes back to metrics, KPIs,and quarterly business reviews.” Said Jimit Arora, apartner of Everest Group - an outsourcingconsultancy and research firm.

The question is, how to build and strengthen trust inoffshore software outsourcing relationships?

On-going relationship management

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Part VI. RELATIONSHIP MANAGEMENT

1. Cultural understanding: The knowledge of norms, beliefs, business ethos, and skill in the native languages.

2. Credibility: Company references, certifications, previous experiences.

3. Capabilities: Technology, people, and management capabilities.

4. Investment: The investment level in people, technologies, and infrastructures.

5. Pilot project performance: The effectiveness and performance of pilotprojects.

6. Personal visit: The frequency of the client’s visit.

Based on in-depth research of Systems and Software 80 (2007), targeted toVietnamese software development practitioners who have been developingsoftware for Eastern clients, it shows six initial factors that the offshorecompanies should consider to earn the initial trust from the client-side:

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Part VI. RELATIONSHIP MANAGEMENT

Trust is hard to earn, but how about maintaining them to thrive in this trust-basedoutsourcing relationship?

Effective communication starts with clear and realistic expectations, regulariteration involvement, tailored project management, a wide range of formal andinformal communication means, active discussion of emerging issues, andconstructive resolutions proposals.

Maintain effective, regular, and open communication

The software development process is complicated and very likely to be differentfrom the initial expectations. It’s where intuitively managing expectation skillscome to help. Outsourcing companies need to clarify client requirements andexpectations proactively and never promise what they can not deliver.

Besides, we should commit to transparency from both sides for good and badissues with constructive feedback and motivation for improvement.

Commit to the consistency of delivery performance and quality

At the end of the day, the most crucial trust factor is based on how outsourcingcompanies could deliver working software in high-quality and on-time manners.

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Part VI. RELATIONSHIP MANAGEMENT

After all, the relationship between clients and outsourcing partners should evolveor involve trustworthy personal relationships. Forming that kind of intimaterelationship strengthens their business trust. We are all human, and people aremore comfortable being transparent, open, and constructive to people they trust.In that case, issues are easier to be raised early before any significant incidentshappen, which leads to a failed outsourcing partnership.

Build trustworthy personal relationships

In sum, when the distance is far and the culture is different, establishing trust is agradual process that needs serious effort from both sides to make offshorestrategic partnerships happen.

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Part VI. RELATIONSHIP MANAGEMENT

It pays off to reserve one separate part talking aboutcommunication, one of the significant pitfalls of offshoresoftware outsourcing. Communication is a skill that goesbeyond English fluency. It requires skills, tactics to deliveryour messages directly and are easy to understand. Italso needs a formal project communication plan andsupporting tools to close the two countries gap.

Communication and cultural differences

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Furthermore, offshore outsourcing communicationrequires a basic understanding of the culture of theoutsourced country. According to Martin Fowler, anexperienced Agile offshore development practitioner atThoughtwork, the fundamental culture discrepancy is thestraight and open communication level. Suppose yourcompany is based in the Western and your offshorecountries found in Asia. In that case, one typical behaviorthat you should not ignore is that a passive agreementfrom Asia developers could show their politeness but alsoa sign of important issues not getting discussed. TheWesten should sense this specific signal and hold on for afurther discussion.

If you plan to work with a Vietnam outsourcing team, youcould discover several cultural insights into Vietnam'soffshore software development here.

Part VI. RELATIONSHIP MANAGEMENT

RISK MANAGEMENT

Part VII.

Management risks

Technology risks

Business risks

Part VII. RISK MANAGEMENT

Offshore software outsourcing includes both proven benefits and hidden risks. It’sessential to identify where the pitfalls lie and plan to mitigate those as early aspossible. You could refer to several common factors as following to develop yourrisk management plan:

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Unclear development goals and expectations. Insufficient work breakdown and milestones. Lack of solid project management and software methodologies. Misunderstanding the requirements and expectations.Lack of alignment between external and internal teams.Insufficient offshore team motivation.

Unclear metrics to measure the success of both project and productstandpoints. Inconsistent priority during the roadmap of development.Short senior management engagement.Lack of ownership from offshore partners.

Pay attention to several common risk factors above. You could prepare forcomprehensive backup for any incident issues that lead to outsourcing failure.

Management risks

Thin plan for product vision and product architecture. Lack of a serious plan for technical debt.Lack of noticeable QA efforts.Lack of serious protection rules for intellectual property and data security.

Technology risks

Business risks

CONCLUSION

Part VIII.

Software development and offshore software outsourcing are fast-changing fieldswith different emerging technology movements. However, the critical factor foroutsourcing success and hidden risks leading to project failure remain the sameover the decades. Hence, proper investment in understanding the wholeoutsourcing lifecycle and designing your outsourcing plan at a granular level willequip you with a strong foundation for successful project completion.

Moreover, the ultimate objective should be turning your client-vendor relationshipinto a strategic partnership, where innovative development and trust thrive andprosper at the most effective cost. Otherwise, the fear of offshore outsourcingfailure keeps chasing you. And offshore outsourcing can still be your temporarysolution to resolving your limited talent and budget resource constraint, forever.

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Part VIII: CONCLUSION

John Pirtle, Elements of Outsourcing Success, integrisapplied.com, 2017

Serhiy Haziyev and Halyna Semenova, What outsourcing engagement

model is right for you? www.networkworld.com, 2015

Rahul Varshneya, Five Pitfalls To Avoid When Outsourcing Software

Development, StackOverflow.blog, 2019

Swati Sharma, Outsourcing Contracts: What You Need To Know,

www.classicinformatics.com, 2019

Chris Neumeyer, Best Practices for Non-Disclosure Agreements,

www.linkedin.com/pulse, 2015

Bronwyn Shimmin-Clarke, Reflections on agile program management during

the pandemic in Brazil, https://www.thoughtworks.com, 2020

Andy Hilliard, 15 Potential Risk Areas in Software Development Outsourcing,

www.accelerance.com, 2018

Nicole Dorgren Ph.D., Jez Humble, and Gene Kim; Accelerate - The Science

of Lean Software and DevOps - Building and Scaling High Performing

Technology Organizations, 2018

Martin Fowler, Using an Agile Software Process with Offshore

Development, martinfowler.com, 2006

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REFERENCES

The lab for your transformation

Enlab Software is a dedicated offshore softwaredevelopment company, providing enterprise applications

with top-notch quality in every Agile delivery. With complete transparency and integrity.

www.enlabsoftware.cominfo@enlabsoftware.com

+84 983757506

Get in touch