Top 10 Things To
Consider With Offshore
2. © InterGlobe Technologies Ltd. 2011: www.igt.in
1. Communication Quality
Most companies under estimate the amount of communication needed to manage off shore
relationships and projects. Big issues are around the timing and availability of the resources
representing the businesses and their commitment and ability to be available when necessary to make
the offshore relationship work. Some key points that must be considered to over come the issues with
off shore providers:
• Expect a lot of hand holding, cross training early in relationship
• Expect some delayed response, you cannot tap resources on the shoulder
• Conversations, transfers of documents, set realistic time expectations
• Budget for this kind/level of communication
• Requirements communicated correctly, completely, etc.
• Lacking definitions, understanding of terms, etc.
2. Resource Planning
Businesses considering and offshoring arrangement for their development must plan to allocate the
right experienced resources early in the relationship to ensure a successful transfer of knowledge to
their chosen outsourcer. You must closely examine the chosen vendor’s knowledge acquisition
• You must plan resources to do the handholding with the offshore resources
• You will need employee(s) on site working the necessary hours to coordinate with the
• You should insist on 1 to 2 good on site coordinators from the vendor (depending on the
• Coordinators skills required; they need communication skills, business skills to work
with different cultures, soft skills, technical skills not real crucial, management and
people skills crucial
3. Project Documentation
Project Documentation within the timeline allocated. One weak area in offshore development is the
documentation around the project. Requirements of the project, clearly defined expectations and
requirements, clearly define the in scope and the out of scope portions of the project.
• Failing to clearly define the boundaries of the documentation and requirements and design is
one of the biggest reasons for project failure. (How do you clearly define the requirements
needs to be correctly accessed and agreement reached between the supplier and business)
Clear requirements provide speed to market, lower cost and the avoidance of unseen or
4. T&M (Time & Material) Projects versus Fixed-Bid Projects
Fixed-Bid are the best method for using offshore vendors for development projects. Clearly defined
projects that are component based with the vendor having the responsibility of complete delivery from
end to end will yield the business the best results. T&M bids can create big problems for the business
and the offshore vendor. With fixed bid projects the business manages to mile-stones requiring simple
management functional participation from the business.
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T&M pricing can cause issues if the estimates are wrong, this is the number one customer service
problem between the business and the off shore provider. The business will always feel as though they
have received the short end of the deal. T&M should only be used with testing, routine, non-mission
critical, low impact projects.
5. Off Shore Provider Company Lacking Skills
Businesses have little insight to the actual skills of the offshore company. Without the ability to
understand the full capability of the vendor--the scale that one provider can bring to the table vs.
another provider’s ability to get the skill-set needed means the business remains vulnerable to
perceptions. While the senior management team of the business may understand the capabilities of
the off-shore vendor, the real question is whether or not their resource management team really
understands the capabilities of the offshore companies. The size of the company can be a plus or a
minus and must be considered. Larger certainly does not mean better when outsourcing.
6. Avoid Multi vendor projects (or manage multi vendor projects better)
Off-shore or on shore, different vendors building different pieces and delivering at different times can
create problems for every company involved in your project. Deadlines must be enforced or projects
will slip. Projects requiring components to be integrated creates problems for the company that moves
fastest. Delays will create issues for all of the companies involved in your project.
Companies with T&M vendors working with fixed bid vendors can chew through a large amount of
dollars if integration is delayed. Multiple offshore vendor projects are inherently more complex.
Productivity is greatly impacted when resources are standing by waiting for integration testing because
another vendor may be behind on their work. This common problem must be avoided. Fixed bid
component development that can easily integrate is the best solution for offshore work or projects that
use multiple vendors. Use one vendor with fixed bid pricing where possible for the best results.
7. Lack of Involvement/ Loss of Enthusiasm
Lack of Involvement/Enthusiasm from drivers in your own organization once the project(s) starts.
Project owners (PMS, business heads, drivers etc.) are involved in the beginning, but become less
involved as the project moves forward. When the drivers become more hands off, and less involved,
projects run the risk of getting off track. The common problem associated with disengaged drivers…
poor reviews of project details like; attention to the notes from the off shore vendors, notification of
issues, slippage, accounting problems, cost overruns, resource issues, and other issues.
Most of these problems can be averted and certainly the surprise mechanism removed when the
drivers remain engaged. Project drivers tend to be pulled in different directions, causing these drivers
to lose focus. Project drivers may be sidetracked by other small problems leaving seemingly
insignificant problems on offshore projects to go unchecked until these small insignificant problems
become significant. Off shore vendors will take advantage of the lack of involvement from the driver.
Clients must review every document, and keep all documentation related to the project and review the
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8. Quality of the work
If the vendor has enough QA (Quality Assurance) onsite they should catch the errors and the business
should never see the problem. Businesses should require a review of delivery document examples
from previous, similar projects completed by the off-shore vendor. The business should review each
vendor’s process for quality assurance. The business should consider the off shore vendors
approach; what steps do they take for QA? (Obviously, you must excuse a lack of requirements, or
constant changing requirements causing quality issues).
The business must consider whether or not the off-shore vendor has the resources and internal
software and hardware to do the job? Does the vendor understand the delivery dates? Do you
understand the delivery dates and requirements to meet those dates? The business must understand
the testing and development processes used by the vendor. The business needs to understand the
internal processes, etc. The business must look deeper than the outward appearance of quality like;
“CMMI level 5” after reviewing their processes and verifying previous project documents are they really
9. Meeting Delivery Commitments
Be sure that the deliverables have miles stones and what the acceptance of the milestone means to
both the business and the vendor. If the delivering company does not deliver on time, and the
acceptance criteria is not met, how do you mitigate it? Decide with the vendor a mitigation process
before starting the project. The business and vendor must agree on the terms of the acceptance
criteria before the work begins. Both sides must follow the agreement based on the criteria. Deviations
should not be allowed without the approval of both parties to the agreement.
Deliverables must be compared to the requirements, and then verified against the scope before the
code is delivered (accepted). The purpose of this review is to allow the business absolute certainty the
right thing is being delivered at the right time to the specifications requested. Certain staging areas and
backups should also be established to prevent the contamination of work. Proper versioning control
and SCM procedures must be implemented to protect the integrity of the work. Internal project sites,
version control of documentation uploading and downloading responses, problems, control. Obviously,
the right vendor will have a fully detailed process documented for your review.
10. Avoid Long Term Commitments
Avoid long term commitments that lock your business into a long term relationship with your
development vendors. Even if long-term contracts create lower rates, avoid them at all cost. Your
business needs the flexibility to move if necessary to another provider, challenge provider etc. Off
shore companies need a reason to improve their services, long-term contracts remove the incentive to
improve when long-term contracts are signed.
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