One of the fundamental misconceptions of software construction is that it is an “assembly line” or “mass production” problem. Management in many companies looks at software construction like building cars. Where can I go to find the lowest-cost workers and get them to assemble my software? This assumption is fundamentally flawed; constructing software is more like coming up with a new car design. There are thousands of considerations that come into play when coming up with that new design, and the designers need to work very closely with all the people marketing and selling the software (or car). Building great software is hard. Over one-third of all software projects fail to meet their objectives.
Because of the misconception above, many companies think they can just find an offshore consulting company in a country where the standard of living is very low compared to the country in which that company is operating. Hiring developers at rates like $20, $30, and $40 per hour is very attractive to those managing costs.
In this article, we will examine why many projects using an offshore model fail to meet their objectives and how we can fix them.
1. Bad Match For Offshore Project
The first and top reason for an offshore project failure is picking a project that is not conducive to offshore development. In order for an offshore project to succeed you must have both the right talent in-house as well as the right size project that makes sense to offshore. In terms of talent, you need to either co-locate your product manager with the team, or you must have a product manager capable of producing very high-quality detailed requirements. In most struggling projects, neither of these is present. The other issue is trying to offshore a small project. There is considerable overhead in offshoring a project; you not only need to have the product manager, but you also need a local project manager and a remote project manager. This overhead doesn’t make sense for small projects where you only need a team of two to four high-quality developers. Here is a quote from one of our customers who was in this situation:
“Several years ago, my organization hired an off-shore outfit for a fairly complex project where we had a local project manager, a remote project manager and all the development was remote, as well. The rates were low and it started ok. We got plenty of attention and they were eager to please. Then, the wheels started to come off. We had language issues … and the quality of the work was not what we felt they promised. We engaged with Solution Street and while the rates/hour were higher, the overall cost of the project was lower. And, that does not even begin to factor in that we were faster to market with functionality that made our customers happier.”
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