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Maintaining a Dialog

Focusing on communication will smooth the process of offshore outsourcing. For starters, most outsourcers agree on the importance of a well-defined work process. Says neoIT's Vashistha, "With many of our clients, not only do we have standing weekly meetings and monthly reviews, but we also have quarterly site visits."

For Comstock, however, having regimented deadlines wasn't enough. "Every two weeks there was a deadline when they would have to deliver something," he says. "And they missed every single deadline, even including the first one. It was a total nightmare."

The key, says Boyes, is to recognize that managing an offshore team is different than heading a domestic one. "You don't have meetings and conference calls. You do design review on paper, and send emails back and forth. If you do need to have a meeting, you go there, or they come here. I've tried Web conferences and phone conferences, and they just don't work well."

For impromptu, day-to-day communication, however, the Internet provides invaluable tools. In Comstock's case, much of his communication with the Russian development team took place via instant messaging (IM). "They were always on—it amazed me. And they were always doing work! We really got a lot done that way, communication-wise. It was even better than email. It was like a conversation."

Ajilon's Westin says this type of communication is increasingly common in today's outsourcing arrangements. "Even [our domestic projects are] mostly remote, we have teams spread out. Russia is very up on using the tools. Not just IM, but all the collaborative tools. Sometimes they push us, and we consider ourselves experts."

When it came to working with the Egyptian team for the second round, however, Comstock didn't have any more luck with IM or other collaboration tools than he did with maintaining deadlines. When negotiating any outsourced project, clarify your electronic communications expectations from the outset.

Proceed With Caution

Getting burned is the fastest way to learn a lesson. Though his initial experience with outsourcing to Russia was positive, Adrian Comstock still says he wouldn't consider outsourcing Web development again.

When pressed, he admits to errors in the selection process that contributed to his poor outsourcing experiences. "If I had to do it again, I would just make sure that the American firm liaison, the project manager, was local to me, and that I had a very high level of trust with them," he says.

What's more, Comstock continues, he would be much more selective of the overseas firms he worked with, whether or not he had an American outsourcing partner. "I would do an interview. I don't care if they're in India, or they're in Egypt, or Russia. I would say, before I signed the contract, I would want to meet and have a phone conversation and an email exchange with the project team, so that I can make sure of the language communication."

Walt Boyes agrees that a thorough interview is essential. "Ask detailed questions about problems and how they responded," he suggests. "There will always be problems. If you get several previous clients and they say, 'Yes, there were problems, but they fixed what we needed quickly,' that's a good sign."

Ajilon's Westin adds that companies should examine their reasons for going with an offshore vendor carefully. In particular, he says, low cost and fast turnarounds don't make up for shoddy workmanship. "The old adage is that there never seems to be enough time or dollars to do it right the first time, but you can always find the money to do it over. We'd like to avoid that."

Neil McAllister is senior technology editor of New Architect.

Closer to Home Anytime you ship a development project overseas, you introduce risk. Sophisticated projects that require extensive collaboration between offshore developers and domestic programmers, content producers, and graphics designers can be particularly difficult to manage. In many cases, even a 20 to 25 percent cost savings may not be enough to justify the additional headaches. But, according to Clif Westin, national practice director for e-business at Towson, Maryland-based Ajilon Consulting, there is another alternative. It's now possible for U.S. companies to obtain some of the cost benefits of outsourcing, Westin says, without shipping their development operations to the other side of the globe. They need only look north. "Canada is making a very big play," Westin explains. "It has become very competitive to a lot of offshore pricing. And this is beyond just the discount you see because of the exchange rate; there's a discount at the market level for talent, as well." While outsourcing to Canada can fulfill the top objective of most outsourcing engagements—reduced cost—it can also, at the same time, eliminate many of the difficulties associated with offshore outsourcing. Just for starters, language communication between U.S. and Canadian nationals is virtually effortless. Most of Canada occupies the same time zones as the United States. And travel is generally much easier, should you want to inspect your vendors' sites. While vendors in places like India, Eastern Europe, and Southeast Asia will almost always beat prices quoted by Canadian companies, there may be other financial incentives to choosing developers closer to home. The passage of NAFTA virtually eliminated any government-imposed barriers to outsourcing in Canada, and the Canadian government's tax policies are favorable to hi-tech businesses. The legal advantages are perhaps even more significant. "With Canadian laws being very similar (by comparison) to U.S. laws, litigation is much easier," says Westin. In fact, he adds, sometimes it isn't even an issue. "If we do partner [with a Canadian company], many times the contractual elements will be held in U.S. courts." All of these can be compelling reasons to keep outsourcing business in North America. Still, it's important to remember that no outsourcing engagement will be as easy to manage as in-house development. Even when outsourcing to Canada, you should make sure to craft your requirements specifications carefully, and always maintain close contact with your vendors throughout the project. —NM

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