How knowledge management can leverage your offshore development

1. The growth of the Internet has result in offshore development, with some parts of IT
development in the US being outsourced offshore for over 50%. Although levels in outsourcing
are still very low in Europe, companies from the old continent are also starting to get interested
in moving their development offshore. Excellent opportunities for Brazilian companies to start
delivering offshore solutions.
The growth of the Internet and the cost of labour might be somewhat
drop in international telephone tariffs higher than in India and China for
has enabled a global information and example, the Brazilian market for IT
knowledge sharing revolution in recent development is of comparable size to
years. Not only has the cost of both. The main difference is that
acquiring knowledge dropped, it also Indian development has its focus on
has leveled the playing field for offshore, while Brazilian development
international competition. Small and is very much internally focused. Some
medium enterprises are now able to might be due to the fact that India’s
compete globally at little cost common language is English (with
compared to previous years. One of quite a heavy accent), but we cannot
the results of this has been a surge in forget Brazilian culture is much closer
offshore development, with some parts to both American and European and
of IT development in the US being time difference with Western Europe
outsourced offshore for over 50%. and the United States are a few hours
Although levels in outsourcing are still compared to the 10-14 hours India has
very low in Europe, companies from to deal with. The difference lays in the
the old continent are also starting to preparedness for offshore
get interested in moving their development, especially when looking
development offshore. Excellent at the structuring of communication,
opportunities for Brazilian companies processes and managing knowledge
to start delivering offshore solutions. transfer.
How come then, Brazilian companies Due to its high level of knowledge
have not picked up on this incorporated in process and product,
opportunity? Brazil is almost never development offshore brings some
mentioned in offshore development complexities with it, especially when
reports as a possible offshore country compared to the exporting of
and total export of development commodities, which in principle is
services is still very low. This seems to nothing more than the offshore
be against common sense. Although development of products.
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2. To understand this better we should sometimes even little possibility for
look at the upholding structure of synchronous communication due to
offshore development. Offshore differences in timezones, knowledge
development is based on three pillars: transfer is complicated and the trust
price, quality and productivity which base between the parties naturally
work completely integrated. For fragile. Second, offshore development
offshore development to be interesting includes a development process,
to them, clients demand at least the which requires sequential and parallel
same quality they are used to at a steps that need to be undertaken
lower price and delivered in the same during delivery. To enable a proper
timeframes they normally would work execution of the delivery, it is
with. To complete the three-way important that knowledge is
requirements, the productivity level transferred in both directions, with the
needs to be high on both sides of the offshore development party delivering
ocean. If productivity is low, knowledge intense products, status
timeframes cannot be kept and overall reports and clarifications while the
pricing will increase, due to the client should provide inputs and
required extra hours, not only on the feedback. A poor execution of this
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offshore developer side, but also on process can lead to misunderstanding
the client side who is working with and disappointment on both sides. In
expensive specialized staff to lead the the third place there is language.
projects. And productivity is highly During the offshore development
dependent upon timely access to process, the parties involved will use a
information. To give an example, when predefined language (often English),
staff of the offshore development but more often than not, this language
company does not receive a clear is not native to one or either of the
definition on how the client would like parties or a huge difference in dialect
a certain development issue to be exists (you might want to hear the
resolved, they might either loose time difference between Indian English and
due to differences in office hours, or American English) and thereby
move on and develop a possibly complicates, especially, verbal
incorrect solution. communication and therefore transfer
of knowledge. Fourth, there is the
This brings us to several key outsourcing aspect, which leaves
knowledge management issues intellectual property vulnerable,
incorporated in offshore development. especially since international contracts
First of all, it is offshore, which means are difficult to juridically impose. High
that many times there will be quite trust between parties is required and
some distance between the without face-to-face contact this is
developing party and the client. With naturally difficult. Fifth, there is the
virtually no face-to-face contact and aspect of high rotation of staff in
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3. offshore development countries, transfer when the development
where experienced developers might becomes routine. With repeated
leave the offshore development team standard development, knowledge will
and leave a knowledge vacuum of be incorporated by the development
client relationship, product and team and only the customization of
process. these products will intensify the need
for transfer of knowledge again.
So how can Brazilian companies Transferring of knowledge of customer
prepare themselves for offshore products and processes via
development? In the first place, make socialization, but especially
use of current day communication externalization are fundamental.
tools such as instant messaging, e-
mail, voice over ip, and collaborative Therefore, request proper
environments that support low cost documentation from your client,
based transfer of knowledge, be it tacit structure yourself to enable clear and
or explicit. But it is important that this timely communication, register and
process happens structured. The document properly yourself and
focus in this knowledge transfer spread knowledge among team
process should be on codification and members. And continuously improve
organization. If both are done well, the your development and communication
requirements for collaboration (which processes via lessons learned and the
support the transfer of tacit definition and dissemination of best
knowledge) will drop. Even if practices. Maybe you might not need
synchronous tacit communication and CMM certifications, but you surely
collaboration is handled well, it still will need structure to be productive. And
be difficult to replace explicit productivity depends on access to
knowledge, especially when the information and knowledge, the
products are high knowledge intense. capability of staff to turn this
The higher the intensity of tacit information and knowledge into
knowledge, the more complex offshore tangible results and the speed of
development will be. Tacit knowledge decision making process. So manage
intense processes require proximity. the knowledge transfer and knowledge
Therefore, design will be more difficult management process well and
to outsource than programming for combine this with good professionals
example. Programming can be made that Brazil is rich with and you get
explicit by technical and functional yourself ready for offshore
specification, including even use development. Now you just need
cases to show user interaction with the clients, and that is another story.
system. Design requires, feel, insight,
connection to people, although the use ***
of examples (of designs) and
references help to transfer this Caspar van Rijnbach é consultor da
knowledge. TerraForum e especialista em Programas de
Idéias e Inovação. Seu email é
Even knowledge intense products can caspar@terraforum.com.br
become less needy for knowledge
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Developing a Business Case for Corporate Portals A TerraForum Consultores é uma empresa de
Portais Corporativos e Gestão de Conteúdo consultoria e treinamento em Gestão do
Calculando o Retorno sobre o Investimento (ROI) em projetos de Portais Conhecimento (GC) e Tecnologia da
Informação. Os clientes da empresa são, em
sua maioria, grandes e médias organizações
dos setores público, privado e terceiro setor. A
empresa atua em todo o Brasil e também no
exterior, tendo escritórios em São Paulo,
Brasília e Ottawa no Canadá. É dirigida pelo
Dr. José Cláudio Terra, pioneiro e maior
referência em Gestão do Conhecimento no
país. Além disso, conta com uma equipe
especializada e internacional de consultores.
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Gestão do Conhecimento e E-learning na
Prática
Portais Corporativos, a Revolução na Gestão
do Conhecimento
Gestão do Conhecimento - O Grande Desafio
Empresarial
Gestão do Conhecimento em pequenas e
médias empresas
Realizing the Promise of Corporate Portals:
Leveraging Knowledge for Business Success
Gestão de Empresas na Era do Conhecimento
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