Successfully Managing Offshore Software Development for Small & Medium Sized US Companies

1. Successfully Managing
Offshore Software
Development
for Small &Medium Sized US Companies
By Jack Bicer
CEO & CTO
Septium Corporation
Hybrid-Offshore Software Development
Tel: 714-389-3360
eMail: jbicer@septium.com

2. Successful Offshoring:
Covered Topics
• Why offshore ?
• Problems with offshoring.
• Elements of successful offshoring.
• When do fixed priced projects increase risk ?
• Picking a good offshore vendor.
• Q&A

3. Background
• 29 years in software development
• CTO for 10+ yrs
• Inventor of Uninstall &
Automatic Software Updates
• BS in EE, MS in Computer Science, MBA
• CEO & CTO of a hybrid offshore
custom software development company.

4. Why Offshore Software?
• Reduce costs
30-50% compared to internal staff
50-75% compared to Outsourcing
Increase quality – Offshoring will force you to
•
good process if you don’t already have
have a
one
• Easy access to high caliber developers, talent you
may not be able to hire or afford
Expand & Shrink with your business cycle – no
•
politics, layoffs or morale issues
• Startups may use just savings and avoid fund
raising

5. Problems with Offshoring
Language Barriers – not everyone speaks
•
English
• Hard to understand accents
• Cultural Barriers
• Yes Men – afraid to deliver bad news or
challenge bad decisions
• Not listening - we are smarter than you
so we’ll tell you what to do
• Not understanding the simple cultural
concepts that we take for granted
• Poor communications
• Vendor Misrepresentations & Incompetence

6. Successful Offshoring
Successful offshoring requires a good software
development process:
1. Solid Design
2. Realistic project plan
3. Monitored and validated implementation
4. Good testing
5. Talented people
6. Dedication to quality across all levels
7. Long term vision and commitment

7. Solid Design
Strong Design Phase
• Detailed Software Design &
Specification
• Use use cases
• Include UI
Cost comparison for different phases
of software development:
• Design: Change Cost: $1
• Implementation: Change Cost: $10
• Production: Change Cost: $100
If you need to make a change, which
phase will give you the best ROI? –
Design !

8. The project plan
Once you know what you need to do in detail,
you can create:
• Realistic Development Timelines
• Accurate Cost Estimates from the timelines
Get buy-in from all parties
• Engineering
• Management
• Business / Marketing

9. Monitoring and Validation
• Track against the project plan
• Interim milestone releases every 3-4 weeks
Each release contains working modules
Proof of progress & validation
Resist “feature creep”
•
Number onereason for project overruns
and failures

10. Testing
Solid Testing
• Should be performed by professional QA staff
• Not by developers
Alpha test – internal testing by company
•
Beta test –internal and limited external usage
•
• Use automated test tools and do stress
testing
Read my whitepaper on “10 Tips for Successful Software
Development” for more information.
http://www.septium.com/10tips.pdf

11. Fixed Price Can Increase
Your Project Risks
• If you know exactly what you want done, fixed price works
(Maintenance work, infrastructure support, rewrites of old
software).
• If the specifications are not well defined, or you are
developing a new product or a major new enhancement, fixed
price is bad way to go.
• With too many changes, Cost of Change may even exceed
the Original Estimate by as much as 4x.
Few expected surprises – Can use Fixed Price
•
Many unknowns – time & materials pricing serves you
•
better.
You can control the costs better.
For more information, read my whitepaper on “Fixed Priced
Projects can actually increase your risk and costs”
http://www.septium.com/fixedprice.pdf.

12. Picking a Good Offshore
Vendor
• Don’t pick a vendor for an offshore project.
Pick a partner that will support and take care
of you for the long term.
• Do hybrid offshoring.
• Ask for an American Project Manager with
significant experience. Eliminate language and
cultural barriers.
• A seasoned software development veteran who
can help guide you to success. Resolve issues
before they become bigger problems.
• Combine Savings with Quality.

13. Picking a Good Offshore
Vendor
• Having good processes in place is a
requirement. But by itself does not ensure
successful delivery.
• Only good processes coupled with good
people deliver success.
• Pick smaller, relationship oriented offshore
vendors with a proven software development
process.
• They usually provide better service than their large
competitors.
Every client is very important for them.

14. Main Takeaway
• Quality is paramount.
• Without quality, neither price nor savings
matters.

15. Questions ?
Jack Bicer
Septium Corporation
CEO & CTO
Tel: 714-389-3360
eMail: jbicer@septium.com