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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
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
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.
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
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
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
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 !
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
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
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
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.
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.
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.
Main Takeaway


•   Quality is paramount.

•   Without quality, neither price nor savings
    matters.
Questions ?



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

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Managing Offshore Software Development

  • 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