This document discusses right-sourcing outsourced software testing projects to ensure successful performance and delivery. It covers what outsourcing is, the strategic and tactical reasons for outsourcing including cost savings, access to expertise, and regulatory compliance. Key factors for successful right-sourcing include clarity on goals, shared risks and communications with suppliers, readiness for outsourcing, and clear roles and performance standards.

1. Declan Kavanagh, MD of Insight presents an
approach to ensure successful performance and
delivery in outsourcing projects.
Right-sourcing:
Aligning your performance with
your supplier.
2. What is outsourcing?
1. Paper Summary process and product working
transparently with your When a company decides that
Software developer organization where the vendor there is some activity that it
organizations can no longer carries out tasks and projects on wishes to have a supplier carry
ignore that there are specialist site, and on their premises (near out rather than use its own
software QA & Test suppliers in and far shore). Key Phases are internal resources it is in effect
the market who because of their Readiness, Mobilization, outsourcing the activity.
core competencies, processes Transition, Ramp, and ongoing The scope of outsourcing in the
and locations can deliver faster, operations. software development world
cheaper and better results than
can be small or large and may
the internal test and QA 1.1 Key Points; include the following:
department.
• A blend of in sourcing, near 1. The full development life
However we have all heard of and far shore outsourcing is cycle from Business Analysis
the war stories of outsourcing to most effective for results, the to Maintenance
far shore locations where the profile of the blend is 2. Any part(s) of that life cycle
supplier failed to deliver the adjusted over time as the a. Business Analysis
results expected and information relationship, performance b. Design
flows were less than acceptable. and business goals change. c. Development
• A critical success factor is d. Test
This paper discusses an knowing when your e. QA
approach that can minimize the company is ready to f. Maintenance and
risk and ensure the planned outsource software QA & Test support
business value is realized for your and where to start. 3. Any component(s) of the
organization when handing over • Partnering with the right selected activity(s)
key software QA and Test tasks to supplier and managing a. Task(s)
a 3rd party (Or equally a remote service levels is essential to b. Activity(s)
operation within your own ensuring successful delivery c. Project(s)
organization). Right-sourcing is of results. d. Department/Function
about best practice people, e. Process
f. People
g. Systems
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2. The considerations, techniques create and/or enhance its conditions which may be unclear
and approaches proposed in this competitive advantage in the or unpredictable such as:
paper can apply to any chosen marketplace it operates. Some
scope of activity, they can be strategic reasons that may be • Demand is un clear and suffers
applied to a situation whereby considered are: from peaks and troughs
an organization or operation is • A particular skill set is un
transferring an activity to another • The organization wishes to available internally and needs
part of their corporate concentrate on its own core to be developed or is only a
organization, or to a 3rd party or business and competencies short term need
where they are reviewing their which differentiate it and • The deliverable requires a
own role in the market they deliver competitive particular standard or
operate whether it be internal or advantage. performance, accreditation or
external. The focus of this paper • The organization recognizes certification that can be
is of course on the area of that software QA, Test and supplied by a 3 rd party
software QA, Test and Validation Validation which may be very • A specialist asset, such as
important to the business is not equipment or software is
a core competency and a 3 rd required but purchase, training
party organization may be and support is not justified with
able to deliver, faster, cheaper a business case
and with higher quality
because software QA, Test and
Validation is their core business 2.2 Why do companies
• The organization wishes to engage in outsourcing?
create an extension of their
capability and capacity by There are many reasons, whether
engaging with a strategic they be strategic and/or tactical
partner underpinning these reasons will
• The organization may want to be a desire to enhance
sharpen their processes, get competitive advantage in the
2.1 The reason and goals for more standardization and get marketplace and create
outsourcing an outsider view. stakeholder value. A Cap Gemini
Ernst and Young paper indicates
Strategic the following drivers:
Tactical
Strategic outsourcing relates to a • To Realise Cost Savings
decision and plan that are Tactical outsourcing tends to be • Lack of IT Staff
integral to a company’s long more short term in its nature and • Lack of Expertise
term strategy, and designed to driven by business and market • To Improve Efficiency
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3. • Get Access to Broader Skills • Loss of Control/Visibility • Enhances Capability,
Base • Choosing the Right Partner Flexibility and Responsiveness
• Deliver a Better Service • Reliance on Suppliers • Reduced Fixed Costs
• Focus on Core Business Caused By:
In addition we suggest based on • Clarity on the goals and
In addition we suggest based on our experience that relating to objectives
our experience that relating to software QA, Test and validation • Goals and risks shared by
software QA, Test and validation the following are also drivers: partner supplier
the following are also drivers: • Excellent communications
• Knowledge acquisition and and relationships
• To have a 3 rd party maintenance • Readiness for out sourcing
independent contribution • Environment consistency (Robust, Reliable &
visible to stakeholders • Loss of Flexibility Predictable Process)
• As a route to drive process, • Transition & Management • Clear roles and performance
performance improvement overhead Overhead standards
and best practice
And most importantly in
recent years following Negative
scandals in major • Delivery and Quality un
international industries both in predictable
the private and public sector • Rigid scope and
“ Regulatory Compliance” documentation
such as SOX, FDA, GAMP4, conformance
Basel 2 etc • Lack of innovation, creativity
and experience
• Management effort and
2.4 What are the experiences overhead more than
business has had with expected
outsourcing? • Rework and Duplication
• Loss of flexibility and
Positive responsiveness
2.3 Concerns companies • Cost reduction and hence Caused by:
have with out-sourcing profitability improvement • Big bang over the wall
• Enhanced services levels outsourcing
From the same Cap Gemini Ernst internally and to end clients • Insufficient focus on
and Young survey, the key • Integrated and transparent relationships and
concerns are as follows: operations development
• Security/Confidentiality
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4. • Poor readiness for (Process Maturity, Product provide on site, near shore and
outsourcing stability, Development far shore capability. There are a
• Overselling by supplier quality, staff buy in and number of phases that are
• In effective out sourcing expertise) followed; each phase has a set
process 3. Relationships: Formal and of time lines and performance
• In experience on both sides informal at many levels need standards.
• Lack of awareness of cultural to be formed for the
differences partnership to really perform
effectively. These
2.5 Critical Success Factors relationships are of course
underpinned by pragmatic
We conclude this section by service level agreements,
summarizing what we believe best practice process and
the critical success factors are: effective Management
information which are all
1. Goal Clarity: Having clear essential to guide both
goals in the business and organizations.
operationally, shared with the 4. Financial Synergy: There has
stakeholders in the business. to be a win –win for both
In addition having and plan parties the supplier needs to
and operational process that feel that his customer is a
is flexible to respond to high value customer so he is 3.1 In-sourcing (Phase 1)
changes in customer, willing to invest in that client
supplier, partner and market and make a profit. The buyer Ideally the proposed supplier
needs. needs to see real takes responsibility for a project
2. Readiness: A poor track competitive advantage from on site initially. The objectives of
record of delivery the supplier. this Phase for the supplier working
performance (e.g. cost, with your organization are as
schedule and quality) will not follows:
be solved by jumping straight 3.0 Right-sourcing
to outsourcing the next 1. Deliver a specific project /
project. An essential Right sourcing is an approach Release in line with your
ingredient in creating a designed to ensure that the companies business
successful outsourcing critical success factors relating to objectives.
relationship is to ensure that setting up a strategic or tactical 2. Provide key team members
current product and process partnership are addressed and who will be part of off site
are moved towards best that the risks of the change are delivery to work on project
practice performance minimized. Right sourcing and learn
requires a supplier who can
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5. 3. Establish overall readiness 3.2 Transition to Offsite (Phase 2, 3.3 Ramp phase (Phase 3)
and actions needed for a near and/or far shore)
smooth transition. On completion of Phase 1 the On satisfactory completion of
4. Best Practice process processes, skills, systems and Phase 2 Pilots and over time
definition and interface relationships are in place to carry more and more of the activity
process definition out some subsequent projects off can be carried out at the off
5. Allow customer work directly site. shore low cost location, this
with the supplier. would include more
The blend of activity can be projects/products and higher
structured to include on site, value test design and
near shore and far shore management activity.
depending on the business
This phase in effect is a value conditions that exist at the time. Eventually the blend changes
add due diligence for both Key considerations are as follows. with the majority of routine test
parties and has the following and QA activity carried out off
benefits: • The supplier owns the shore and the supplier providing
deliverables and local or on site capability for new
1. The supplier provides a performance products, technologies which
business deliverable while • The supplier has on site or are really at phase 1. Subsequent
completing training and local project management phases are about refining the
process readiness. • The location of activity is virtual test centre of
2. Direct relationships are reasonably transparent competence, leveraging the
established face to face • A Pilot project or two are skills and assets across each
3. The planning for the transition completed off shore where location and driving
phase becomes interactive all processes, systems and performance improvement.
and informed by the real performance are validated
world operational situations in • Initial Test Strategy and
both companies Design is completed by the
4. A pragmatic service level supplier on site or near shore
agreement and and Test execution or test
improvement plan can be automation script
put in place. development work packages
5. At the end of the phase the are assigned to far shore
client will have a process and operation.
set of best practices that
indicate readiness to near or
far shore as appropriate.
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6. 4. Key Processes & Systems • Source code control and 5.1 What should you look for
configuration management in a supplier?
4.1 Processes • Defect reporting and tracking
system ideally integrated with • Their core competence and
In order for any right-sourcing the test management tools capability is software QA, Test
relationship to be effective it is • Test Automation tools and Validation
essential that the key processes (Functional and Non • They can demonstrate a
are agreed, defined and Functional). knowledge of best practice
documented: • They have a track record of
similar successful projects
• The development process and • You meet the key people
methodology 5.0 Supplier selection and and feel comfortable with
• The test process through the life management them
cycle • They are committed to taking
• The source code and There are many considerations ownership and sharing risk
configuration management when seldctingh a supplier to be • They have a clearly defined
process right sourcing partner. It is best to process and approach
• The release process internally define the requirements of a • They have a local presence
and externally supplier in an RFQ. This is not and project management
• The defect and fix intended to go into detail, but • Their commercial model is fair
management process just highlight some of the key • They are flexible, responsive
• The Test environment features that should be in the and collaborative during the
management process definition of requirements. sales and negotiation
• The communications and process as an indicator they
escalation process are easy to work with.
• Statement of business goals
• The change control process • They demonstrate where
and objectives
they can add value
• Statement of business
4.2 Systems & Tools immediately and over time
conditions
• Statement of contract
Key systems that need to be in requirements 5.2.1 Supplier selection and
place support the above • Deliverables management process
processes • Schedule
• Any available estimates 5.2.1 Selection
• Test Management System to • Quality standards
manage test development, • Contract Terms & conditions • Profile of supplier
execution and results with • Details of the evaluation and • Request for proposal
traceability end to end selection process • Proposal evaluation
• Meeting and Presentation
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7. • Short List 6 What the supplier will be and they also serve to provide
• Audit looking for? some protection to both parties.
• Selection
• Pilot Project A good supplier will be asking The service level agreement(s)
• Service Level Agreement questions that verify your are the most important
• Contract readiness to right-source; they document as they are the day to
will have specific interest in: day management documents
5.2.2 Management that assist the teams in both
• Current process maturity organizations understand what is
• Frequent status reports • Current performance required, when it is required and
• Interim deliverables • Complementary processes how it will be delivered.
• On Line metrics and • Levels of development test
information • Development and Test These service level agreements
• Deliverables Strategy and methodology may be appended to the overall
• Effort • Interface processes contract or master service
• Quality Indicators • Information requirements agreement:
• Schedule conformance • Certifications and standards
• Forecast required 6.1 Contract schedules or
• Issues • Style of management and SLA’s
• Visits and audits operation
6.1.1 Service level agreements
• Quarterly formal reviews • Where they can immediately
add value and where they
The purpose of the service level
can add value over time
agreements is to define in more
• Win – Win profit strategy (do
detail the operational aspects of
both parties benefit)
a specific work package, project
or function. They act as a guide
for both parties on what has to
7 Contracts and agreements
be delivered, how, when and
the performance standards. They
Any professional business in effect become a schedule to
relationship should be regulated any master service agreement or
by formal agreements that are contract, and allow flexibility and
legally binding. responsiveness to both parties to
respond to the day to day
The value of these agreements business needs and changes.
are mainly at the start of the They also remove the need for
relationship as they serve to lengthy and complex
clarify both parties expectations negotiations each time there is a
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8. new work package or 6. Primary contact and 6.2 Master Agreements and
Requirement. escalation points Contracts
7. Communications
The key components for inclusion a. Report frequency and The master
in the SLA are: content agreements/contracts govern
b. Meeting frequency, content the overall relationships between
1. Deliverables and channel the parties and provide legal
a. Statement(s) of work c. Performance metrics protection to both parties as well
b. Test and QA strategies 8. Dependencies as recourse in the event there is
c. Test Plans 9. Assumptions a breach or failure to perform.
d. Definitions 10. Capacity plan if needed The main sections that should be
i.Test Process 11. Scope control process included in any Master Service
ii.Test environment 12. Change control process agreement are as follows:
iii.Control processes 13. Sources and repositories for
(Config, Release, code and information 1. Definition of the parties,
defects etc) 14. Response times and turn- names, addresses, registered
e. Test Scenarios around times (measured) numbers
f. Test Cases 15. Assigned and named 2. Statement of the business of
g. Test Reports resources each party, the intention of
h. Release notes 16. Costs the relationship, what is being
i. Defect analysis reports a. Fixed price, Fixed Fee, Open purchased by whom and
j. Risk and risk mitigation Book, Time and Materials what is being supplied and
reports b. Overtime by whom
k. Entry, Exit and Suspend c. Capital and Consumable 3. Definitions and interpretations
Criteria purchases, budget, of word and terms used in
l. Metrics ownership the contract
m. Reports d. Expenses, Travel etc 4. Appointment statement
n. Tested code in source e. Bonus and penalties 5. Commencement and
code control system 17. Acceptance criteria and duration statement
2. Interim deliverables process 6. Duties of the supplier
3. Key Milestones and overall 18. Any other term or condition 7. Duties of the purchaser
schedule that requires definition in the 8. Fees and Fee model
4. Definition of key processes master contract or service 9. overtime and expenses
and references to agreement. 10. ownership of deliverables
documented procedures and assets
and policies 11. Hours of work and days and
5. Roles and Responsibilities on hours the service is being
both parties provided for, e.g. 24 by 7
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9. 12. Notice and Termination to the purchasers operations
13. Effects of Termination ideally on site, there are the
14. Accommodation and additional benefits of mutual due
support diligence, relationship building,
15. Confidentiality and getting ready to off shore.
16. Intellectual Property
17. Warranties The approach also is very flexible
18. Limits of Liability and allows controlled ramp of
19. Indemnity and Insurances activities to a near and/or far
20. Force Majeur shore operation while
21. Nature of agreement maintaining a local presence
22. Entire agreement and delivery ownership while
23. Waiver minimizing risks. Having the
24. Severability supplier work directly with you on
25. Notices your site is a critical success
26. Non Compete factor in ensuring readiness to off
27. Non Solicit shore, and adjusting the blend of
28. No Partnership where activity is carried out can
29. Governing jurisdiction and be designed to create maximum
laws added value from the supplier.
30. Signatures
31. Witness The paper suggests that best
32. Date practice outsourcing is as much
about relationship development
7.0 Conclusions as it is about good professional
business practice. It is not about
This paper suggests that for the just creating rules and policing
most effective outsourcing of those rules but about creating an
software QA, Test and Validation extension of your organization
and for that matter any with a supplier partner who is
outsourcing of the development easy to work with and brings
life cycle that there is an additional competencies and
emphasis on quickly getting the capabilities that create new
partner engaged in the competitive advantages and
purchasers business, with an value within your organization.
emphasis on seeing the supplier
partner deliver early on in the
relationship and doing that close
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