I recently published an article on the famous Dutch IT magazine ‘Computable‘. In response to this article, I received some questions from Reza Sarshar of interaccess. The questions are interesting and I want to address all of them in this article. 

1. What is the utility of offshoring?

There are many benefits for companies engaging offshore resources. The extent to which each applies to your company depends on whether you set up your own offshore office, work with a supplier based on fixed price/SLA, hire dedicated people from a supplier or work with freelancers. In general the benefits are (and please add to this if I missed something): a. Engaging talented people (access to a big labor pool)
b. Flexibility in scaling up and down (no long term employment contracts)
c. Ability to grow your company and (software) products faster
d. Lower costs
e. Flexible cost structure
f.  Focus on core activities

2. How to approach offshoring?

This question is hard to answer in a short article. I believe the first fundamental choice is whether you want to set up your own office or work with a supplier. In my experience, setting up your own office works for big companies and takes too much focus away from the core business for SME’s. Working with a supplier that has the right people and gives you guidance in how to manage people on a distance gives you a fast track to success. 

Once you have decided on the basic setup, there are 5 key success factors:

a. People: The most important factor in building an offshore cooperation is to select the right people. 
b. Process:  All people need to have a common understanding of ‘how we work’
c. Preparation: Take the time to prepare everything well and don’t rush into it
d.  Profit: Monitor continuously whether the cooperation is delivering results
e. Performance:  Regular evaluations of the team members on aspects like productivity, quality

3. What is the effect of offshoring on your business model?

I will answer this question from the perspective of my own typical customer: a web or software company. The impact on a few parts of the business model:
a. The way of working: people need to create a structure, process and way of communicating that supports working with people on a distance. You need more structure than with people in one location. And this has a positive spin off on the whole company. An example is one of our new customers, an internet project company from Holland. They were used to do all communication through email. Right now, a need to feel in ‘control’ of the progress of a project (which they usually did by talking in the corridor) arises. For this purpose, they will start using an online issue tracker. If this works well, they plan to use this in all their projects and maybe even give their clients access to the system. This improves their added value towards their clients. 
b. Speed of delivery: you can engage more people to your projects when needed, so products and projects get launched faster
c. Cost structure: the costs of programming go down, leading to more profit or a lower price for the end customer
d. Flexibility: engaging more or less people in the production, which also impacts your cost structure. Employees keep receiving a salary. External contracts can be stopped when needed.
e. Beyond technology: my own company employs some marketeers from India, does part of the lead creation/sales process from India, invoices are sent from India. Once you have the technologists in place, you can further change your business model. You also get access to the local markets where you may be able to sell your products or services.

4. What are the pitfalls of offshoring?

In my experience all pitfalls can be grouped into 2: 
a. Hiring the wrong people. I believe many companies make the mistake of looking at offshoring from a company perspective: they send a big RFP asking how many people work in the office, what technologies they know, etc. Although you do need to know this, eventually your work gets done by people. And you want to hire the best possible people, so you want to have a voice in who’s working on your project and you want to communicate directly with them. 
b. Miscommunication. Assumed that the people working for you are the right ones, things may still go wrong if communication contains flaws. Software development in itself is already hard, essentially because it is hard to know upfront what needs to be developed. And if one person knows what needs to be built, the next person may understand this in another way. Add to these complexity different locations, time zones, language and cultures and you’ve got a mix of factors that affect communication. I have written an article about this earlier. 

5. What is the influence of the cloud on offshoring? 

I wrote an article about this last year. My general thought on this is that we will always need people to produce software. Of course things get automated, the cloud gives companies access to software on demand as they need it. But still the systems need to be built and still there will always be companies that believe they need their own systems.  

Managing global teams requires a solid structure and the right (software) tools. I often get the question what tools we use in our company. I am always surprised when I show someone our project management tool, what impression it makes on them. To me, it seems common sense to have such tool, but for people without experience in offshoring, this is not so common at all. 

The goal of using tools is to maximize structure. Software development is complex. Human behavior is complex. The tools should make the software development structured. And they should help the people involved to show behavior that leads to the desired results. This second element is the biggest challenge. Software development is a creative process, not factory work. So we need creativity from people and at the same time, we expect them to behave in a specific way.  

So what tools/ingredients do you need you to facilitate global team collaboration? 

1. A documented process that answers ‘how do we work’

I believe this is the starting point of any global collaboration. Before the train starts driving, everybody involved needs to understand ‘how we work’. This process needs to be both documented AND supported by everybody. The process also needs to be reviewed and improved continuously. It would be useful to have an online process building tool for this, which I have not found so far. Word documents also serve the purpose here. 

2. Project management tool

An online tool that enables the team to manage everything within a project. Such tool should include seperate elements for:
a. Storing requirements documents
b. Managing tasks
c. A bug tracker
d. A planning module to plan and track progress
Some popular project management tools are: Redmine and Jira. More simple bugtrackers include Bugzilla and Mantis.

3. Skype or another video conferencing tool

This may seem obvious but many people without experience in offshoring are not so used to skype. It’s crucial to stimulate human interaction, so the (group) video functionality of skype helps there. The team needs to see each other regularly for both bonding and project discussions.

4. Time registration + reporting

People sit far away so it is hard to understand what specifically they are doing. Time registration can help us out. Programmers can register the time spent on certain tasks/bugs/projects in an online tool, which can be reported once per week to the onshore project leader. It is also useful to have a weekly analysis of the time spent, so the people understand how and why time is spent from both sides. 

5. A version control system

The most commonly used tools here are subversion or CVS. Usually this is installed on a webserver and people from each team commit code to the system at the end of their working day. Another, which integrates for example with Redmine, is GIT. 

6. A coding standard

Although this may seem logical, many companies are reluctant to have coding standards, let alone follow them. With different people on different locations working on one project or system, it’s crucial that everybody knows ‘this is how we expect you to develop software code’. The coding standard needs to be clear to everybody and it’s helpful to check the code regularly to ensure that people stick to the standard. 

7. An overview of responsibilities

Who’s doing what? Who is accountable for what? Even if people are working in different companies, it is helpful to create function profiles that give an overview of what is expected of each person. 

 8. A performance measurement system

If you are building a long term cooperation with an offshore team, it’s important to give them feedback on their performance. The best is to treat them like they are your own employees. Examples are ‘asks questions when requirements are not clear’, ‘communicates ideas for better solutions’, ‘is proactive’, ‘makes deadlines’. You can rate those on a scale of 1-10. It’s also useful to ask the offshore team to give you feedback on certain factors (e.g. provides clear task specifications, communicates expectations clearly, assists in technical problems). It is helpful to use an online survey tool (e.g. surveymonkey) or use some custom built system for this. 

With such tools and systems in place, the work is facilitated. Behavior gets structured, feedback is given and the team gets a feeling of ‘control’. And still there is a lot of space for human behavior to deviate from the expected behavior. Maybe you have some tools or methods that you can add to this list? 

The IT talent pool available in India is highly skilled. These educated IT professionals are good English speakers. They should always try to go that extra mile in cross-cultural communication to understand customer’s needs when working in an IT offshore project.

All offshore IT projects begin with a transfer of knowledge. This activity between stakeholders and developers is not always easy because the Indian developers have been trained in the Indian educational system. The Indian educational system, though imparting superb technical training, misses the mark on communication and soft skills. How can developers and stakeholders overcome this?

Three Possible Solutions:

1. Research the Company

Select one offshore employee to thoroughly research the company they are going to work with. Research what  problem the company is trying to solve through their products, how the past and current products (including the software currently being assigned) solves customer problems and is different than past solutions, what kind of problems they want to avoid in their product roll out, and how customers will interact with the product, among other aspects. Another, often missing element is in understanding the client’s vocabulary. Each discipline and profession has a particular language. What is the corporate lingo? The best customer service representatives know how to talk to their customers in a language they understand. This is irrespective of crossing cultures.

2. Create a Training Program to Deliver to the Indian Team

Based on the research conducted, develop a training module and deliver it to the India team for every project, discipline or delivery to a new customer base. This may seem too time consuming and unnecessary at first. Developers may scoff at this idea thinking they are already experts in their work, and this training is not directly related to their work. This attitude can have detrimental effects. There have been several cases where the offshoring team was not given access to this critical training, resulting in the client abroad cancelling the job within the first few weeks.

3. Learn Soft-Skills

Soft-skill training is imperative for being able to deliver projects effectively. Soft-skills and language fluency go hand in hand. Managers and on-site have noted many concerns after realizing that an ability to speak English does not equate fluency.

Top 5 Communication Challenges Noted by Managers of Indians in Offshoring Projects:

>Use plain, conversational English.

•  Indians are often too formal and wordy.
•  On-site is not always able to understand technical terminology.

>Soft-skills and command of the language.            

• Lack of vocabulary and expressions may limit understanding.
• Use of inflection or clear enunciation while speaking.

>Question / Paraphrase

• Understanding and use of a wide variety of questions.
• Lack of paraphrase skills.
• Use of reflective listening.

>Communication skills

•  Learning to be and to extract specifics.
• Use of “I language.”

>Other forms of communication

• Phone and voice mail skills.
• Best practices for e-mail communication. 

Some of these skills come with practice, while some are cultural-dependent. The bottom line is if the foreign-based team is unable to understand the India team due to a basic lack of communication; the project suffers, less opportunity to maintain relationships exist and overall the benefit for the on-site side is lost.

To avoid these mistakes, invest time in these suggestions and personalized coaching for those employees who would value it most. The cost in short term will seem high, but in the long term, your company and team could see longer lasting projects, assignment of more projects and, better job security for your team and your company. While some may think that these issues are not important as they have not been affected by them, please do not let the illusion of this steer you away from understanding its core importance. Communication skills are a cornerstone to business. These skills are challenged even more when interacting cross-culturally. It is important that companies and their employees take this seriously for their own career development as well as company strategic growth.

Click here to read more about the effective methods of communication for virtual teams.

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This article is publishing under the series “Bridge the communication gap of virtual teams” by Bridge Global IT Staffing. Stay tuned for more article from this series…

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More and more organizations are adopting Agile ways of working. The descriptions of Agile methods give much guidance on how to work agile on the team level. They describe the practices and support the set-up of Agile teams. But there is limited information on changes that are needed in projects to introduce and manage Agile teams. Setting the right project environment is crucial for Agile to succeed. This article provides solutions that help to create and manage Agile projects. 

Difficulties implementing Agile in Project Management

Some of the problems that organizations have that implement Agile in their projects have to do with:

• Fitting agile teams into the existing project management organization
• Communication between and synchronization of Agile (project) teams
• Managing and reporting agile progress in projects 

The problems mentioned here are not really agile problems. They have to do with changes that are needed in the project structure and -processes, and project management for agile to succeed. 

What is Agile?

Agile is a modern methodology to develop software iteratively in teams. The manifesto for agile software development states that the purpose of agile is “to uncover better ways of developing software by doing it and helping others do it”.

The primary purpose of agile teams is to deliver working software. Their focus is on satisfying the needs of their customer, in agile terms the “Product Owner”. All the customer needs are collected in a backlog, described in so called “User Stories”. At the start of a sprint (a block of time in which software is defined, developed and delivered), the planning game is used to select the user stories with the highest priority, and to clarify them. Results of this planning game are a set of user stories and acceptance tests, which defines the software that is to be delivered in the next sprint.

The sprint ends with a “demo”, where the software is demonstrated to the product owner and other stakeholders, and a retrospective where the team reflects on their way of working to continuously learn and improve.

Agile Project Teams

To increase the change that agile practices will bring benefits for the organization, management should give attention to the introduction of agile teams into the existing project management organization. Most projects in non-agile organization already work with teams. So what makes agile teams different?

First difference is the team size. Agile teams consist often 7 people (+/- 2), this since the team members communicate and work together very intensively. I have seen traditional projects where teams were very large up to hundreds of people (one can argue if it really was a team in the first place), and projects with smaller teams of sometimes only 1 or 2 persons (which often are more functions/roles then teams). Agile teams make it easier for project managers to manage on a team level, since interfacing with the team leader only is usually enough to coordinate the ongoing work. So they do not need to stay in contact with all project members. And since teams are also more similar in size, it is easier for project managers to divide their time and attention over the teams.

The second thing that makes agile teams different is that they have the authority and responsibility to agree upon the work to be done, directly with the product owner. This is different from most non-agile projects, where often the project manager is responsible for assigning the work to teams, or even to team members. Since the project manager is still responsible for the end result of the project, the question is how they should deal with agile teams in their project? My experience is that, if the project manager gives attention to a good collaboration and communication between the team(s) and the product owner(s), the project will be able to deliver valuable results to their customers. So they should focus on the relationship between the teams and stakeholders, and solve impediments that are either signaled by one of them, or that they see themselves and consider to be a risk for the project.

Finally, most projects have multiple agile teams. It is the responsibility of the project manager to coordinate the interaction between the teams. Often a scrum of scrums is used for the synchronization of the teams. Also project managers (or in some organizations line managers) can facilitate sharing of knowledge and experiences between the teams, for instance with Communties of Practice.

Agile teams have different needs wrt project management. They expect that project managers understand the agile principles, and support them in their agile way of working. Project managers have to assure that their teams are able to do their work, effectively and efficiently.

Managing and reporting agile progress

Many software development organizations use Prince-2, PMBoK or another project management method to manage their projects. Most often, IT projects are done with fixed time, money and scope. How do this match with the agile approach, that has user stories and planning games, and no fixed scope?

First, fixing time, money and scope is often an illusion. Many IT project fail, resulting in higher costs, insufficient functionality or quality, not meeting the delivery date, or a combination of these. Keeping everything fixed is simply not possible. With agile, it is easy to manage the project costs and end-date. Project costs are mostly the costs of the project team members, and since the size of the agile teams is know, the burn rate can be calculated. When a delivery date is agreed, it is easy to calculate the project costs that will be spend until that date.

What about managing functionality? Agile uses prioritizing of user stories to deliver the most important functionality first. And since agile teams deliver working software in sprints, and continuously improve their way of working, most agile projects actually deliver more functionality then waterfall projects. Techniques like story points and planning poker are used by agile teams to estimate the activities. The product owner uses the backlog to manage the content of project. When reporting project progress, the project manager should show which functionality has been delivered, and (given current priorities) what is expected to be delivered in the reminder of the project. This is different from traditional progress reporting, which is usually based upon milestones or tollgates that are or should be passed. But reporting delivered functionality actually provides better insight in the value delivered to the customers, which makes it easier for project managers and steering groups to manage project results.

Managing projects includes managing the quality of the software. Agile uses the Definition of Done (DoD) to define the required quality of the software. The DoD describes what needs to be done before the software is ready to be delivered, I consider it to be the tailored process description that the team makes and uses to do their work. The acceptance tests, defined during the planning game, state how the software will be validated. Since these acceptance tests are discussed and agreed upon with the product owner, they can also be seen as requirements for the quality of the software.

Summing up, Agile supports managing time, costs, functionality and quality, as required by project management methods.

Conclusions

Managing IT projects with agile teams is different from classical, waterfall projects. With agile, there is still a need for project management, but the role and focus of the project manager changes. When introducing agile in project organizations, enough attention should be given to these changes to assure that teams are to deliver customer value.

More information 

Several articles are available that cover the agile topics mentioned in this blog: 

• Agile Project Management
• Teams, what’s in it for me?
• What Drives Quality: Project Management
• Implementing Agile with the People-CMM

As with anything in the world, there is no holy grail to make something work. In offshoring, there are many factors that influence the success of your projects. But I believe that there are 2 things that determine the success to a very large degree.

1. The people

Last week, I spoke to an American customer, a startup from Nashville that worked with an Indian team for several months. He told me that they have a joke in the office that the names of the people they work with don’t change, but the people do.

I have been around in the offshoring industry for a while and know that this joke is sometimes reality. Many offshore software development companies do not allow their customers to interact directly with the programmers. They ‘hide’ them behind layers of project managers and lead developers. 

The most crucial element in making a company successful are the people that work in the company. If you hire a team offshore or nearshore, I believe you want to know who works in your team. You actually want to select the people, to decide who works on your team. And you want to interact with them, because it’s the individual team members who do the work, not the project managers. 

2. The communication process

Everything comes down to communication. When I started Bridge in 2005, I worked with software companies both offshore and nearshore. The words that I heard most often were ‘yes just send me a project request and we will do the project’. And that’s how most of the offshore work gets done: send requirements, make an estimate, agree on price and deadline and just get going. If you are lucky, you have the right supplier that has a smooth process in place. But in many cases, communication problems will result in problems in finishing the project. So what to do?

To structure the communication, my advice would be to focus at least on the following 4 points:

A. Software development process

Think about ‘how you are going to work’ and the communication process that supports the software development process. Especially Scrum has many features like sprint planning, daily stand-ups, estimating tasks, that facilitate communication across borders.

B. Agree on a weekly and daily meeting rhythm

You miss frequent interaction which you normally have in the office. Therefore it is important to establish fixed timings to discuss progress. It’s advisable to have a daily meeting in which you ask a. what did you do? b. what will you do? c. where are you stuck?. And in the weekly meeting, do an overall evaluation about the project, the tasks and the communication. 

C. Use the right software tools

There are many tools available in the market that supports cooperation between distributed teams. You need a project management tool that deals with planning, estimates, time registration, tasks, bugs, storage of documents. 

D. Define responsibilities

Make function profiles for every person involved in the cooperation. This ensures that each person knows exactly what is expected and by discussing it, it also becomes clear. 

To conclude, there is no secret, it all comes down to establishing the right routines, to ensure that the people show the desired behavior. And to do so, it’s important that you spend time involving the right people and think about how you will communicate with them. 

When speaking to software companies in Europe, I often get to hear ‘we want to have people in our office’. This is something I fully understand. Having people in your own office makes it easier for organization than having people in another building or another country. What then, are the reasons to hire an offshore team?

A. Finding the right people

One of the biggest challenges for software companies today is finding the right programmers. In Europe, there is a big shortage of IT people. And the IT companies are all looking to hire the brightest minds. In the years to come, the shortage will become bigger because the population gets grey and very few people do a technical education. 

By attracting talent offshore or nearshore, you enable your company to involve bright people. The labor pool you are tapping into is substantially larger and there are very motivated people that would love to start working for you tomorrow. 

B. Attracting talent

When you tap into a big labor pool, you will be able to attract bright minds, talented people. By involving smart people in your production process, the added value of your services and company goes up. 

C. The growth of your company

Because it will become much easier for your organization to attract people, you can grow. Your competitors will face difficulties in attracting sufficient programmers and hence will have to turn down clients. If you always have the capacity and can scale up faster, you will outperform the industry. 

D. Profit

People offshore or nearshore earn lower salaries. You save costs on direct labor costs, your margin grows and your company can become more profitable. 

E. Flexibility

Labor laws in most European countries are very strict and it’s not easy to scale your resources up or down. You remove this obstacle by involving people abroad, specifically if you work with a supplier. 

There are many more reasons to choose an offshore team over local employees. But I believe the single most important reason is: people. There is a real lack of skilled programmers, I face this every day while talking to software companies. In the current recession this is a fact, when the economy goes up, it will be much worse. The companies that start assembling an offshore team and that learn how to manage a team on a distance will be the winners of the future. 

If you are interested to learn more about global IT staffing, I recommend you to visit www.bridge-india.in

Last week, Bridge organized Talk About IT for the 6^th time, in cooperation with Efactor. Over 60 people visited Boom Chicago in Amsterdam. The event was a success, with an open and positive atmosphere and much relevant exchange of experiences. A short report, written by one of the panel-members: Michiel Gaasterland of Storywise.

The theme of this edition was ‘What is your mobile strategy?’The attendees were mostly independent entrepreneurs and SME business leaders. Despite my years as brand director for Commodore International Corp, I’m not a mobile specialist. So I was there to help us explore how businesses could fit mobile into their overall marketing 2.0 strategy. The panel discussion was preceded by two presentations. The first was from Sander Munsterman from xs2theworld – who have developed mobile solutions for global brand such as Porsche, IBM, Fanta, Pfizer, Kodak, BBC and Orange. The second was from Edward Hölsken from mediaBunker – who have developed custom apps for everyone from Playboy and Peugot to Sinterklaas!

So let’s see – should you develop an app for your business?

1. Mobile Strategy starts with goal setting

Developing an app because it makes your company look cool and innovative towards stakeholders is OK, If that’s your PR goal. But there’s other ways of looking cool & innovative without going to the expense and trouble of developing a mobile app.

Spending more time on figuring out why you want to do a mobile app, and defining what specifically you want to achieve, will save you the disappointment of developing an app that is not being downloaded or used. It’s a very competitive market. And the app failure rate is high! 

2. Mobile is just another tool or channel; so focus on content

Don’t get me wrong. I am not saying mobile is not important. It is. Somewhere next year, mobile will overtake use of the PC. A good reason to be prepared. But ultimately, it’s just another channel – like Facebook, your website, blog or Twitter – that we can use to deliver content to your target audience.

You need to think of Mobile as an integral part of your entire strategic eco-system. The only element that ties together your entire eco-system is content. So, it’s better to first start considering what content you need to offer, what content users create themselves and how you organize the content. This can now inform your mobile strategy.

3. Mobile is not just about campaigns

A large chunk of the apps out there are created for campaign purposes. Their downloads are driven by promotion and advertising with the objective to have customers ‘engage’ with brands through competitions, fun or games and create awareness or sales. But apps can have longer shelf-life, more value and a more strategic business focus as well.

A great example is the Sennheiser Frequency Finder. In short: Sennheiser had a problem with one of their flagship products: the wireless microphone. Sound engineers had a tough time getting them to work in venues without interference of other frequencies. This started impacting their customer satisfaction and Trust.

The Sennheiser iPhone app helps sound engineers find and set the right frequency for any given venue. This allows the product to perform much better. Which increases customer satisfaction and Trust. This will create positive word of mouth and increase sales over time. A great example of strategic use of mobile apps!

Mobile apps – look before you leap!

Many businesses often jump into developing an app without first figuring out their strategy. This often brings problems in the actual development stage. Or sometimes,even earlier.

I talked with a few nice people who advise businesses on the potential and development of apps. Their starting point is always how mobile fits into your business strategy.

One of the app people told me that they have even advised clients not to develop an app – but instead focus on building a properly optimized mobile website.

This is great advice.

I think the biggest learning from this event is this:

Make sure you take the time to develop a mobile strategy that: fits your business strategy is built around a specific need of your customers and you have the content to sustain its shelf life.

From a personal point of view I want to add one last thing – apps are cool! Once you have a good strategy, focus on the creative side. Create something that your clients would absolutely love to have. Something that really blows their skirt up. Get creative. Care to the max!

If you do all of that, you really are getting this whole 2.0 thing. Have fun!

I frequently hear from people that an aspect which affects the effectiveness of their offshore team is high attrition. It is commonly understood that attrition rates in India are in the range of 20-40% per year which means that if you start building an offshore team, you’ll have a fresh team every 2-3 years. Not good news. But is this always true? 

My experience is that there are some big influencers of attrition (this list is not exhaustive):

A. In which country do you build a team?

I have built teams in Ukraine, Moldova and India. If I look at the CV’s of programmers in India, it leads me to the conclusion that attrition rates there are bigger. 2-3 years is the average stay of a programmer in India. In Ukraine and Moldova CV’s look different, people tend to stay longer. But that’s the CV’s. Somehow people do stay longer. 

B. In which town do you locate the team?

I have established my offices in the smaller cities. In India, I chose Cochin instead of one of the metropolis like Bangalore. In the big cities, there are opportunities for a better paid or more interesting job around every corner. HR people are hunting for talent all day long. In Ukraine I choose Odessa, and in Moldova Chisinau. In both cases, there is also less attrition because people have different reasons for working there. Usually it is their native place and their family is there, so they do not want to move to a big city just to get a better (paid) job.

C. How big is the company in which the team is working?

The bigger the company, the less bonding there will be between an employee and the company. This is obviously not always true, but often it is. Companies like TCS and Infosys with over 100.000 employees experience much more difficulties keeping people long term as each is one small element of the big picture. Smaller companies give more of a ‘family’ feeling where people fight to fulfill the company’s mission and goals.

D. What kind of people do you take on board?

I often ask ‘how long do you plan to stay with our company’ when I do interviews in India. And surprisingly enough, there are people who reply ‘well, maximum two years’! That makes the choice easy. Another indicator of high attrition chances are people who move from city to city. That probably means they look for a high paid job continuously until they get a better offer. I always prefer people who are looking for an interesting job that gives more rewards than only money and have at least the intention to stay on board.

E. How well do you take care of personal development of the team members?

Especially in a global team, this is crucial. People work from a different location for people that they don’t meet every day that they don’t know deeply. This means, that extra effort has to be invested into bonding and into understanding the future growth expectations of your people. If they can grow with you, the projects they work on are interesting and you are nice to them, they will stay longer.

F. How much team building do you do?

An offshore or nearshore team often works in isolation: they work on your project among other people working for other projects in different countries. The company they are employed with offshore obviously has a role in building the team spirit. But on top of that, the offshore team should feel ‘one’ with the onshore team. They should be working towards the same mission, they should get important projects and should be friends with the people onshore. If you miss this, the engagement of the offshore team with your purpose will be low and people will stay shorter. 

The most contradictory term that I find in our industry today is ‘virtual teams’. To me ‘virtual’ means ‘it is not real’. A team consists of real people, doing real work, having rational thoughts and emotions lead their behavior. All of the aspects above indicate to me that we need to think through many aspects before choosing a location, choosing a team and choosing team members. There is nothing virtual about building global teams. If you treat them as a real team and real people, you build commitment and people will work in your team long term. 

If you are interested to learn more about global IT staffing, I recommend you to visit www.bridge-india.in

Many Agile organizations are considering to outsource parts of the development work. But they want to keep their benefits from Agile, like quick delivery, customer involvement, and high quality. Outsourcing will create distance between the local organization and the development teams where the outsourced work is done, and to manage projects that involve outsourcing is often difficult. Can you do outsourcing and remain Agile? Yes you can, but some aspects need the proper attention and planning to assure that it will work.

Communicate and Collaborate

Establishing communication between the sites is crucial. One possibility is the use of ambassador roles; contact person that keep in touch, radiate information, and assure that actions that involve multiple sites are taken up and finished. But don’t depend too much on the ambassadors; it is important to have multiple communication channels between sites, to lower the risk of miscommunication and missing important information.

Face-to-face meetings are essential in a distributed setting. Of course that will imply that people have to travel, which involves costs and time. But for team members to work together effectively, they need to know, trust and mutually respect each other and build up relationships; and face-to-face communication is the most effective way for this. So if you are planning for distributed teams, also plan for travelling of team members.

Managers also need to stay in touch with the teams, and vice versa. They must frequently visit all sites, and have face-to-face contact to assure that all teams share the same vision and are aware of the importance of what the project is doing and how their work contributes. Air travel is a must for managers to ensure successful delivery.

Creating Teams 

There are several solutions possible for multi-site teams. Some of them involve roles that specific for larger and distributed teams, like architects, integration experts, product owners and infrastructure experts. These roles are important to establish and maintain collaboration between the distributed teams, and to ensure that that the parts developed by teams can be combined into working solutions. Global decisions (e.g. architectural issues, infrastructure or overall testing) should be taking by consensus where possible, to ensure that people are heard and can provide input for the decision, and are aware of the decisions that have been taken. The product owner, as defined in Scrum, clarifies and assign priorities to the different requirements. It is necessary that every team has a collocated product owner. Also off-shored teams need a product owner, to ensure that the team has the right information, on time, to deliver business value. 

It is important that team members share a team identity, work towards a common goal, and acknowledge the joint responsibility to deliver results. Also they need to adhere to collaborative rules and guidelines, and must agree on a joint set of values. Reaching this takes time and effort, it should not be forced upon team members so plan sufficient time for team member to discuss, establish and experience the way that they want to work together. Team member need to build up trust, which enables them to work together.

Setting the Culture

Many communication problems are related to cultural differences between teams or sites. It is important for team members to be aware of cultural differences, and to learn how to handle them to improve collaboration. A good way to learn each others culture is to work on-site, to experience the culture. There is a lot of research done on culture, take for instance the Hofstede model which quantifies behavioral differences in cultures; this research can help you to prepare, recognize and better understand cultural differences.

You need to establish a culture where people know and trust each other, to ensure collaboration. Frequent face-to-face meetings are needed, and it will take several weeks of people working together before trust is established. Avoid longer periods in which team members have no face-to-face contact, since it will hamper trust and result in a threshold which makes it even more difficult to build up trust afterwards.

Getting Feedback

Feedback, though more difficult with distributed development, is still very important. Customer feedback helps the teams to understand and increase the delivery of business value. When customers are located in different sites, make sure that they can download the products, and have the means to quickly provide feedback to all the distributed teams. If possible, customers should be on site at product demos, where they can give face-to-face feedback to the teams.

Agile retrospectives help the teams to look back to understand and improve their way of working. In a distributed setting, there needs to be at least retrospectives per team, and project-wide retrospectives. The first one focuses on the developing and improving the team, while the second one focuses on communication and interworking between teams. The project-wide retrospectives can also help to establish and optimize processes that are used within the project. A wiki is often very useful to share information about the way of working between team, mostly because all team members can contribute in an easy way which keeps them involved. 

Conclusions

When you are doing outsourcing in an Agile company, make sure that you set-up and maintain effective communication between teams and the local organization People in the different teams need to know each other, to build a culture of trust where they can collaborate. Feedback is crucial, to address issues that come up in the collaboration. If you pay attention to these aspects, outsourcing and Agile will support each other, ensuring that value is delivered to your customers.

More information 

Several articles are available that cover the quality topics mentioned in this blog: 

• Getting Business Value out of Retrospectives
• Agile Project Management
• Establishing and maintaining stable teams

To an ordinary person, outsourcing a business would seem like a waste of company resources and an additional complication for running a business. This makes sense because after all, why should a company send business abroad when it can be done right at home with a better guarantee for a much higher quality of work. But in the eyes of a businessman, the advantages of outsourcing serve as a modern day bonus for improving one’s business. Outsourcing offers a business the opportunity to transfer important but non-core sectors of business administration on BPO providers that specialize on the needs of the business. This will then provide a company enough time to focus their attention on key areas of the business that will bring more profit and revenue.

The most attractive thing about outsourcing is its cost effective factor. Workforce and IT services within Europe and U.S. are not that affordable as compared to the same services offered by key outsourcing destinations particularly in Asia. In effect, the advantages of outsourcing are more focused on the inexpensive option of operating a business which can be provided by BPOs at a much lower rate. The inexpensive but productive mass labor force can get the job done at half the price it will cost companies when they decide to have it done onshore.

Annually, a lot of well educated people graduate from the universities with various degrees on different fields. These graduates speak better and formal English as compared to native English speakers which make it an advantage for businesses who want to break down the communication barrier. The sudden increase of BPO’s in the last decade has given these professionals the opportunity to earn higher than what they can earn being employed in local companies. Being part of a BPO provider also offers them with the chance to stay close to home and earn almost as much as they would if they choose to go abroad and look for a job. A BPO employee can earn as much as $500 a month plus other incentives and benefits. Although this may seem to be just a small amount for Americans or Europeans, the conversion rate is huge in countries like Philippines and India. In the end, both parties are faced with a win-win situation and the job gets done with utmost observance on quality.

There is also a sure guarantee when it comes to the quality and productivity of BPOs. Since all candidates are comprehensively trained and with the prospect of earning more than what they can earn locally, they are expected to give the best they can. BPO providers assure their clients that the job is sure to meet the target and will be delivered on time as agreed upon by both parties. The bottom line will be a thriving business on both ends. Client companies will have a cost effective way of getting their non-core tasks completed while BPO providers develop an earning opportunity for the local labor force.

To learn more about outsourcing and get your free copy of my book, ‘Outsource This!’ visit http://www.123Employee.com.

Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honored more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting http://www.123Employee.com.

I frequently speak to people in India that run BPO or software firms and I am always astonished by the numbers. People tell me that they started their software company 5 years back and employ 2000 people today. In Management Team, a famous Dutch magazine, I just read an article about Intelenet. This Business Process Outsourcing (BPO) company, started 10 years back with 40 employees and today has 42,000 employees. The biggest part of the work that is moved to India comes from the US. So they are doing something different from us.

The Indian companies can grow with such speed, because the people are available. Infosys has started 25 years back with 10 people and employs over 100.000 people today. Such stories wouldn’t be possible in Europe. But the work also needs to come in. Apparently, the US outsources much more than we Europeans. In the Netherlands, if we talk about a big software firm, we are talking about 100 people. In the outsourcing industry, a big firm in Eastern Europe doesn’t employ much more than 1000 people. So what are the Americans doing different?

• One obvious reason has to do with language. They can employ people in India to do a vast amount of work as they speak the same language.
• It may also have to do with the opportunist mindset of Americans? When they see a business opportunity, they take it. Are we Europeans too conservative?
• Does it have to do with money? I think that the salaries in Western Europe are at the same level or higher than in the US, so I can hardly imagine that there isn’t enough incentive for us.
• Availability of people? In the US, unemployment rates are towards 10%, while in many Northern European countries, they are around 5%.

Dear readers, it would be interesting to learn some perspectives of Americans and Europeans. What do you believe are the differences in our actions?

Agile teams have shown to be a great way to deliver high quality software products. The agile values favore quality, and there are several agile practices that are applied by agile teams to develop high quality software.

What is Quality?

My definition of quality software is software that satifies the needs of the users, and delivers value to them. Quality is in the eye of the beholder, it is the user who decides if a software product or service has is quality, not the agile team. So teams can only deliver quality if they are driven by the needs of the users. In agile, this is supported by the agile values, and by intense collaboration of the product owner and the agile team.

Agile Values

The agile manifesto decribes the values that agile methods consider important. In my opinion, these values support the delivery of quality software. Like “Working software over comprehensive documentation”, which focuses on delivering products to users. It encourages to deliver early and frequently, enabling users to use the software and start getting value by serving their customers. Also “Responsing to change over following a plan” results in higher quality, as it urges agile teams to adopt software that does not satify the needs of the users.

Customer Collaboration

Collaboration with the potential users of the software is crucial to build understanding of what quality is. Scrum recognizes the role of the product owner, who defines the user needs and focuses upon customer value. In the planning game, the product owner and the agile team work closely together to define and prioritize the needs of the users, with user stories.

In the daily stand-ups, teams tracks their progress and brings up impediments that would hamper the delivery. At the end of the sprint, the demo is used to show the products and services that have been developed, which are then accepted by the product owner. 

Quality Practices

Since the agile values already support quality, and agile teams are highly collaborative, it is no surprise that agile teams deliver high quality software. But how do they do it? Let’s look at some practices for delivering quality software, that are applied by agile teams.

For instance, pair programming, which is done by two developers who are sharing one keyboard and screen. One developer is typing, while the others reads the code, signals potential problems and suggests improvements. With pair programming, the code is reviewed when it is typed, which gives quick feedback to the developer and prevents defects from entering the software at the earliest stage possible.

Another agile practice that increases product quality is Test Driven Design (TDD).  If write your test case before writing the software, then you know by executing the test that the functionality is working. Test cases are added to the regression test, so during the development the agile team knows that the software remains correct.

Refactoring is a practice to adapt existing code to enable meeting current needs. It can be used to increase the performance of the product, or to add new functionality. Team member need to develop their refactoring skills, so that they can update the code efficiëntly, and assure the quality of the software product.

Agile teams continuously improve their way of working with retrospectives. By reflecting at the end of a sprint, the team looks at things that went good, could be improved and evaluates what they have learned. Agile has improvement embedded into the way of working, teams continuously learn and get better in what they are doing, incresing both their effectiveness and efficiency.

Conclusions

Agile teams are driven by values that favore quality, collaborate intensively with the users of the software, and use practices to develop high quality software products. Due to this, it is no surprise that agile teams deliver high quality software and services to their users.

More information 

Several articles are available that cover the quality topics mentioned in this blog:

• Getting Business Value out of Retrospectives
• What Drives Quality: Coding
• Improving Code Quality with Pair Programming
• A Customer is a Customer

About the Author:Ben Linders has a broad international experience, specializing in quality, process improvement and organizational development.  Team worker, driven, supportive, and pragmatic. Committed to quality business results on time.

Website: http://www.benlinders.com

Email:info@benlinders.com

A question that I often hear is whether offshoring is better than nearshoring or vice versa. First, let’s get straight on the difference. Nearshoring is when you move work to a country that is nearby your own country. Wikipedia speaks about a country bordering yours, but in Europe, we often mean Eastern Europe. Offshoring is moving work to another country in general. More specifically, most people mean moving work to a country in Asia, farther away. Some people talk about farshoring, rightshoring, bestshoring, nearsourcing, etc, but I will use the definitions above.

As my company has offices in both Eastern Europe and India, people always ask me what the differences are.  

By now, just about every Internet marketer knows they ‘should’ be using a virtual assistant to free up their time for more important matters like strategizing, organizing campaigns, arranging JVs, creating new promotions, fine-tuning offers, etc. But, still, many marketers continue doing all the little things themselves. This is like bending over to pick up a penny while dollars drop out of their pockets — and they end up with a big rip in their pants!

Can you afford not to hire a virtual assistant? Let’s take a look…

What is your yearly income? Please write down that amount, because it’s important.

Now let’s say you wrote down $50,000 per year. Have you ever figured out what that means in terms of your hourly rate? It’s easy to calculate. You simply take $50,000 and divide it by 52 weeks. Then you divide that by 6 days (assuming you work 6 days like many Internet marketers). Then, finally, divide that by 8 hours to come up with your hourly rate. In this example, your hourly rate would be $20/hour.

What this means is that if you are doing tasks that would cost you less to outsource, then you are HEMMORHAGING money by doing it yourself!

Some of the excuses Internet marketers come up with to avoid hiring a virtual assistant include:

Excuse #1: I don’t trust anyone doing my work for me.
Excuse #2: I can do it faster myself.
Excuse #3: I don’t have time to train an assistant.
Excuse #4: I don’t know if I can come up with 40 hours worth of work for them each week.

So, let’s just get these out of the way, shall we?

1.”I don’t trust anyone doing my work for me.” What this means is if you don’t trust others doing work for you, then you’ll end up doing everything YOURSELF. And while, yes, this is quite obvious, did you consider that you would then be making yourself a slave to your work for the rest of your life? Also, that you’d end up losing out on any possible leveraging of your time or energy and would lock yourself into the dreaded “Time = Money” equation, where you can never make more money than you invest into work with your own hours.

2.”I can do it faster myself.” Depending on the task, perhaps you can. But even if it took your virtual assistant twice as long as you to do the same task at $6 per hour, you’d still GAIN $10 per hour if your hourly income was $20. If you did it yourself, you’d actually LOSE $10 per hour.  So, you might as well grab a stack of $10 bills and set one on fire every hour that you decide you can do it faster yourself.

3.” I don’t have time to train an assistant.” What you’re really saying here is that you’d rather do the same repetitive task over and over and over again instead of training an assistant just ONCE so they can do the task for you FOREVER without further investment of time on your part. Think about the power of investing just a few minutes to train your virtual assistant to complete a task that drains away countless hours of your time. This is the ultimate leverage. Provide your VA with a system to follow just once, and you’ve automated that process for yourself for the rest of your LIFE! So the question is, can you afford to NOT train your VA in repetitive tasks that suck away your time and energy?

4.”I don’t know if I can come up with enough work for them.” A superior outsourcing firm will always provide work for your virtual assistant in their “down time” that will actually monetize them for YOU. That is, when you don’t have work for your VA, the outsourcing company will provide work for them on your behalf — such as promoting an affiliate program where YOU would get paid ongoing commissions for sales they help you generate — without your even assigning work to them. So, in theory, you could end up earning more per month than you actually pay your VA, without your even assigning them a single task. In addition, a client-centered outsourcing firm will offer a variety of monthly plans to suit your needs, so if you only needed 10 or 20 hours of weekly support that would be all you’d pay for.

There are literally hundreds of tasks that your virtual assistant can take off your plate immediately and handle for you on any given day. Imagine all the time that will free up for you.

As you finish your day you make a list of your priorities for the next day. You notice that at least half of your tasks can be easily delegated to your virtual assistant. So, you send him or her an email with instructions on what’s to be done for the day. By the end of the day your assistant emails you, letting you know that your tedious, repetitive tasks were completed for you — while you invested TWICE the amount of time into far more valuable, money-generating tasks.

If you’re ready to hire a virtual assistant then choosing the right outsourcing company is crucial. One of the main reasons Internet marketers start out with a virtual assistant and let them go is because they went with the wrong company.

To learn more about outsourcing and get your free copy of my book, ‘Outsource This!’ visit http://www.123Employee.com.

About Author:Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honored more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting http://www.123Employee.com.

Report: Talk About IT, November 15, 2011

Last Tuesday was the fifth time Talk About IT in Amsterdam. Talk About IT is a platform where interesting experienced speakers present their views about the latest topics in IT and where IT professionals come together to increase the size of their effective network. The theme of this Fifth edition was “how to make a success in international outsourcing?”.Attendees enjoyed the presentations by 4 speakers John Blazey, Chris Smit,Hugo Messer and Wilco Turnhout.

#John Blazey, Director Engineering at TomTom shared his experiences in setting up offshore and nearshore teams in India, China, Poland and several countries. He distinguishes four ways for offshoring:

1. Black Box: Specifications are drawn up; the supplier takes on fixed price projects

2. Activity: an activity is outsourced, for example testing

3. New team: a team is assembled from scratch by an offshore vendor or independent

4. Team members: there are individuals hired who are controlled directly

Tomtom uses a mix of these forms, whereat John said to have the most negative experiences with outsourcing black box.His tips:

1.If you have the money, then put everything in streamlining communications (visiting each other is part of this)

2.It usually takes six months before a new team member fully understands your business and systems, invest this amount of time

3. Hold the interviews with team members during the selection yourself

4. Consider the team as your colleagues.

#Hugo Messer, CEO of Bridge Global IT Staffing presents a central idea:

Our biggest challenge is empathy and to collaborate with people from all over the world. We currently have insufficient IT staff in Western Europe and the deficit will increase due to aging and the small number of IT graduates. By involving talent from abroad, we can easily find the right person for the right position. In order to achieve this there are a number of important topics:

1. Cultural differences: we must accept these as they are, by accepting the differences we can organize around them.

2. Mindset: the cake only becomes bigger; jobs moved abroad do not automatically mean loss of jobs in the Netherlands.

3. Relationships: the thought of ‘we’ and ‘they’ (‘that Ukrainians “) doesn’t helps us

4. Use management tools such as 360 degree feedback and personal development plans for your offshore team to really get them involved

5. Encourage empathy: among your people, your company, and your product

#Chris Smith from Culture Matters gave us insight into the cultural differences that play a role in international cooperation. He made us aware of the differences that exist on the basis of four dimensions of Geert Hofstede (power distance, individualism, masculinity, uncertainty avoidance). Remarkably, his advice to Dutch: be less direct, do not joke (seriously!), invest more time in building relationships, listen (and stop talking) and focus more on details.

#The last speaker was Wilco Turnhout from Rapid Value. Wilco has with his company set up an office in Pune, India, where there are currently working over 20 people. He shared his experiences in attracting talent. In the Netherlands it is very difficult to find SharePoint developers, while in Pune weekly 10 application come in from experienced SharePoint people. Wilco confirmed that investing time in mutual visits, daily skype meetings and celebrating successes together help.

One would think the studies that demonstrate a strong correlation between good governance and the successful outcome of outsourcing engagements would be enough to convince everyone to pursue it, but that is not the case. Even the largest and most successful outsourcing vendors can be metaphorically linked to the cobbler, whose children have no shoes. Consumers and vendors of outsourcing services should seriously consider adding good governance to their repertoire as a form of competitive advantage. At the very least, they should start preparing for the day that it is considered a baseline requirement. Let me try to explain why good governance is so important.

We live in a competitive world. With globalization and the fantastic new technologies that have grown up to enrich the already amazing features of the Internet, the world is getting even more competitive. Ask the people who used to work in North American manufacturing, or computer programming, for that matter, how competitive the world is getting. No one can afford to take their job for granted any longer, including internal IT departments or shared services organizations who may think they have a perpetual monopoly. Outsourcing has made that very clear. It may not seem like it now, but even those who are currently enjoying the competitive advantages of low cost will face the challenge of competition some day, if they haven’t already.

Given the forces of competition it is imperative for IT organizations, internal and external, to be prepared to demonstrate how they provide differentiated value to their customers. It is a good idea for all the other internal business groups to be thinking along those lines as well. In the business world, value is measured in economic terms, in government, in terms of social welfare. While the ability to reduce cost is an important measurement of economic value, it is not the only one. Value can also be measured in terms of customer knowledge, excellence of service quality and with growing frequency in outsourcing, innovation. In short, it is time for everyone to start thinking strategically.

If you work in IT services thinking strategically means thinking in terms of strategic assets. IT organizations, internal and external, need to think of and articulate the investments they make in technology services in the same way upper management thinks of investing in production, distribution, brands or patents. Explaining the benefits of technology in terms of bits and bytes doesn’t cut it in a lot of organizations any longer but articulating why the investments will provide a competitive advantage, or open up and rapidly scale operations in new markets, does. Customers are interested in final destinations and outcomes and if you can explain to them why you are the best alternative to get them there, you are a strategic asset.

So what does this have to do with governance, especially the governance of outsourcing engagements? The answer lies in not making the common mistake of equating governance with management. Governance has nothing to do with “vendor management” or “sourcing management organization.” Governance and management are two important but entirely different disciplines. Governance is about strategic decision making. Good governance is about making good decisions and in business good decisions are measured in economic terms, like return on investment (ROI), for example. It is why financial management or commercial management is considered a core discipline in the governance of outsourcing agreements. It is also where the cobbler’s children tend to walk bare footed.

Financial management is meant to provide operational visibility and insight into strategic assets which in turn supports superior decision-making, the essence of good governance. Thanks to some spectacular corporate defaults, like Enron, transparency has also become the law in the USA.

In leading organizations financial management is applied to IT in the same way other business units are required to analyze product mixes and margin data and it isn’t only outsourcing vendors under the microscope. It is being applied to internal IT organizations too. In more and more companies, IT is the core revenue-generating capability of the enterprise. Financial management seeks to provide the business with the quantification, in financial terms, of the value of those IT services and the assets underlying the services.

A sister of financial management is demand management. It is beyond the scope of this blog post to address either one of these topics in much detail but suffice it to say that among other things demand management is about producing financial and capacity plans, based on demand and supply variances that result from corporate strategy, a strategy that ought to include the financial analysis of strategic IT assets. It is sort of like strategic planning except it involves the services pipeline and the financial state of physical IT assets. It is another area where opportunity exists for those who want to do it right, or help their customers do it right, and probably create competitive advantage in the process.

For those who are not yet thinking strategically the transition will not be easy. It will take time and it will cost money. “Techies” as those of us in the information technology field are sometimes called, have a problem speaking the language of finance and those who do, don’t always share our enthusiasm for breakthrough new technologies, even if they have the potential of transforming the whole business. Luckily, the path is already being cleared and with financial and demand management systems that supply accurate, detailed facts, strategic thinking is made easier. Now, is a good time to get started putting together your service portfolio before someone decides that you too, no longer provide a good return on investment.

About the author:Doug Goddard, the CEO of TCSF.COM. TCSF provides off-the-shelf, software solutions and managed services, to ensure the good governance of outsourcing contracts and services. Doug has a total of 29 years experience, in the Information Technology industry, having filled the role of developer, analyst, designer, DBA, system architect, project leader, program and project manager

The past few years international outsourcing has come to play an increasingly large part within the IT industry. Mainly large companies like KPN and Sogeti regularly decide to relocate projects offshore, especially to India. For example, KPN announced two weeks ago that 450 Getronics jobs will be moved to India. Sogeti’s vision is that in 7 to 9 years one in three people from India offers their services to Dutch clients (right now this is barely 6 percent). In years to come international outsourcing will become more normal and will take place on a larger scale.

This development calls for adjustments in the behavior of Dutch IT employees and managers.One of the most important points is the mindset with regard to foreign employees. The outcome of international outsourcing depends mostly on the willingness of Dutch IT employees to work with people who are far away. A few weeks ago I spoke to a manager at Accenture who has worked with people from India for years. He sees them as his colleagues, he knows many personal things about them, he often travels to Bangalore to meet them and spend some quality time with them and he uses video conferencing all day long. By seeing offshore people as your colleagues and making them part of your team, more can be achieved.

Another important point is the development of project managers, one of the key positions to making international outsourcing run smoothly. Managers who have experience with managing people in Eastern Europe or India know what to keep in mind. Right now there are few IT people who have this experience. Learning tools and best practices will increase the success rate and career of an international project manager.

The role of consultants will also change. A few months ago I spoke to someone who works at Deloitte and manages an office in Hyderabad. He told me that every month thousands of people are hired in India. The role these people fulfill varies from administrative to high level consultant. People are flown in for projects regularly as well, especially to the United States but also increasingly to The Netherlands. The more normal it will be for people in The Netherlands to work with international consultants, the more their numbers will increase. For Dutch consultants this will mean that they can specialize in areas that have a strong connection with the location, language or culture. In other words; they will specialize in positions that are hard to fill for foreigners.

In the future it will not matter where colleagues are located or what their nationality is. Technology and ‘adjustment’ will make this possible at a large scale. The objective is to find the right person for the right position. Companies will make more use of global staffing, whereby they will set up their own offices with their own talented people. They will also make use their partner’s facilities or they will (temporarily) bring people to The Netherlands.

If you are interested to learn more about global IT staffing, Hugo recommends you to visit www.bridge-india.in

Innovites is a small Dutch company with 3 people in the Netherlands and 5 in India. Albert Groothedde, CEO of Innovites shared some best practices on the seminar. His key advice: 

1. Ensure that you work with a partner that is good at search and selection 

2. Make sure that you get the right people in your team

3. Engage a partner that can organize everything offshore and is able to bridge the cultural gap

4. Integrate the offshore people in your organisation

He stated that according to his experience a client-supplier relation doesn’t work. The important thing is to make it a ‘cooperation’ in which the global team members operate in the same team, according to the same values and become an integral part of your organisation. The interesting part of his story is that offshoring worked so well for them, that they even started selling their niche product on the Indian market. 

With Jeroen Tiekstra I discussed the way Accenture works with their Indian people. Jeroen is very positive about his cooperation with his Indian colleagues. For each project, he can send their Indian office profiles of the people they need. The Indian HR department will propose team members and Jeroen eventually picks them. During the projects, he has a permanent connection to his colleagues in Bangalore and they visit back and forth regularly. There are daily meetings to discuss progress in the team and bi-weekly meeting with the customer in the Netherlands to deliver iterations and report on project status.

An interesting part of Accenture’s method is that the team members (both on and offshore) have personal development plans. At the beginning of each project, each person indicates what his personal goals (what he will add extra on top of the basic technical requirements) are for the project. All colleagues as well as the customer gives regular feedback on the achievement of these goals. This way, people are dedicated to making their goals and receive 360 degree feedback on their progress and achievements. 

The past years, people have experimented with different models for managing people across the globe. The above cases both show that a very crucial ingredient is to integrate anyone who’s working in your organisation anywhere on the globe, into your organisation. To treat people far away similar to people in your office, to apply the same management practices, feedback systems, personal development methods and the same logic for setting goals and priorities. Once the right management methods and processes are in place, it becomes easier to integrate people on different locations into your value creating activities. 

If you are interested to learn more about global IT staffing, Hugo recommends you to visit www.bridge-india.in

 An android based tablet computing device with 350 gm weight, 7” size touch screen, 800 x 480 pixel resolution, OS:Android 2.2, 256 RAM,2GB storage capacity, 366Mhz processor, 3 hour battery back-up, 2 USB ports, support Wi-Fi connectivity, supports more than 150000 apps, supports almost all image formats, Video formats, audio formats and the price….. $60..!!!!

The name of this Indian tablet is called “AAKASH” means “sky”. This amazingly ultra low price device that offers good quality and packs all common features found in Android tablets is a wonder for the tech world.

This device is developed by B.Tech students of Indian Institute of Technology(IIT), Rajasthan in partnership with DataWind, a London-based manufacturing company and took six years to develop. Aakash is assembled at DataWind’s new production centre in the southern city of  Hyderabad, India.

Aakash has been developed as a part of the National Mission on Education through Information and Communication Technology and with the objective to link 25,000 colleges and 400 universities for an e-learning programme. This tablet targets students who admires tablets but cannot afford its high cost. Soon, its subsidized $35 version will be made available to every student and teacher in school in India. This hand held device is going to create a drastic change in the educational sector of India.

Country’s premium educational institutions like IITs, IIMs and top business schools already started teaching via electronic class rooms and using digital content to their students. The company is targeting 220 million Indian students market initially, before going in to the other world markets.

Products and services with ‘made in India’ tag  is becoming more and more attractive and valuable. India’s great talent pool and motivated professionals are the key factors that contribute to this.

Internet and software projects are often executed on a fixed price & fixed date contract. The customer outsourcing the project feels ‘protected’ against delays and misunderstandings in delivery. But are you as a customer really protected or does it make the risk of project failure only bigger?

1. The need to specify everything 100%

The biggest obstacle in software development is making requirements clear. Although we humans have the illusion that we’re able to specify everything upfront, it is usually not possible. Firstly, it’s very hard to think of every functionality upfront. Second, if my mind can think of everything upfront, then I should also be able to communicate this to the person who’s going to build it. And that’s also not what we’re particularly good at. The solution the software industry has come up with for this is agile software methods. But the problem is that because these methods work with incremental deliveries, it’s very hard to do this on a fixed price.

2. Who’s responsible?

The customer thinks that he has specified everything. It is clear to him what needs to be built and he is sure that everything is covered clearly in the requirements document. Now if the programmer who’s reading that document doesn’t get anything of it but still says he’ll start building it, who’s wrong? The sender or the receiver? The contract will say the receiver. But that doesn’t help the customer, because it doesn’t bring the project to an end. A more active participation from the customer is often required to finish the project, but as he’s outsourced his project, he feels that ‘all is on paper, so just do it and deliver according to our agreement’.

3. Lack of human bonding

As the project delivery is 100% the suppliers’ responsibility, the customer is usually not involved in who’s working on his project. He has sent his project into a black box and expects it to come out of that as and when agreed. To ensure (on time) delivery, a project manager will typically be the intermediary between customer and programmer. Sometimes even one onshore + one offshore. So there is no human connection between the one inventing the software and the one building it. This lack of human connection promotes misunderstanding about requirements and about people. Of course there are many projects that are delivered without any problems, but I have seen the above happen very often when projects are done on a fixed price basis.

Dear readers,In my next article I will describe the solution that I believe in. As input to that, I would like to know the suggestion of you. What model do you use? What works and doesn’t work when sending a project offshore? If you are interested to learn more about global IT staffing, Hugo recommends you to visit www.bridge-india.in

The traditional outsourcing model uses a fixed price or SLA as a basis to manage the relationship between the people onshore and offshore. The agreement is based on result. In global staffing, the agreement is based on effort and availability. This means that the outsourcer doesn’t have a deadline, service level or fixed requirement to move a project to an end. The management methods are more similar to having internal or external staff in the local office . But the distance, culture and time differences create some challenges. 

I will discuss 6 governance habits that are crucial to success when managing an offshore or nearshore team directly. The perspective here is to provide onshore managers with the right tools. 

1. Assign 1 project manager

In many cases, each project has a different project manager. In a local setting, this may work well, as people know eachother and work in the same office. But with an offshore team, this is different. The offshore team empathizes with the person and his way of communicating. This creates trust and familiarity and leads to higher productivity and quality. Ideally, only one project manager is responsible for communicating with one offshore team and this relation stays. 

2. Assign a process manager

The process manager looks at the cooperation with the offshore team from a ‘distance’. He is not involved in the project itself, but looks at the communication process and the development process. This person can also overlook different projects and project managers. Ideally, he talks to the offshore project and process manager every week in a fixed weekly meeting. 

3. Reporting structure to top management

Last week, I discussed this with one of our customers. He had hired an operational manager who would be responsible for the cooperation with our nearshore programmers. The CEO was not involved in the cooperation for over 6 months as he had delegated the responsibility to the operational manager. The same case applied to myself. We both didn’t have the right reporting structure to stay informed and updated about the things that went well or not well. It is important that the process manager reports to top management on a weekly basis, so everybody stays informed. 

4. Create support from the entire onshore team

It is important that the senior management invests time to communicate the long term benefits of offshoring and get everybody to support that strategy. If there are people that see their global colleagues as a threat or have other negative thoughts about it, they may obstruct the cooperation. By addressing this and involving people in the decision and the roadmap, everybody can get engaged. 

5. Honest and open feedback in meetings

I am a big fan of organizing daily and weekly (skype) meetings on a fixed day and time. It is important that in these meetings, people feel comfortable giving honest and open feedback. Often, things that went wrong are not communicated in order not to offend each other. If the good things are celebrated and the bad things are accepted as an opportunity to learn, the team will get better every day. This is something that can be stimulated actively by the managers in the meeting.

6. Regular checkup with the initial expectations

When the honeymoon starts, it’s important to express and document all expectations. As I discussed with the same CEO mentioned above, we took the workshop that we did before the start out of our drawers. And concluded that every ingredient to make the cooperation a success was written down. But somewhere along the road, we had deviated. And we hadn’t checked up on that initial workshop document frequently enough. By reviewing the expectations and intentions on a monthly basis, there are more opportunities to apply the correct behaviors. 

If these 6 habits are part of the cooperation, you can create an offshore team that acts like ‘colleagues’, becomes part of your organization and creates value on the long term. 

Last week, I was featured in a Dutch radio show on BNR about offshore outsourcing. The topic was ‘does offshoring create cost advantages?’, ‘how is the quality of offshore work?’ and ‘the do’s and don’t of offshore outsourcing’. The experts in the studio were asked to react on my statements. 

In June of 2009 I published an article called ‘The Toyota Way in ICT?’. In last June’s Computable I read an article called ‘Indians defeat veterans in outsourcing’. In this article it is said that Dutch customers are happy with Indian suppliers. Research into outsourcing conducted by KPMG Equaterra showed that four Indian offshore players are in the top five, while the established names are at the bottom of the list [1].

I read a lot about the book ‘The India Way: How India’s Top Business Leaders Are Revolutionizing Management’ [2]. This book is written by Peter Cappelli, Harbir Singh, Jitendra Singh and Michael Useem, who are professors at the Wharton School of Business. The authors’ conclusions are based on an analysis of around 130 interviews with Indian CEO’s and managers belonging to the largest companies. The authors try to establish what the Indian managers are doing differently.

New practices

‘The India Way’ focuses mainly on the contrast that exists between the different styles of business management in the US and India. Topics that are discussed are leadership, company management, human resources management and innovation. The basic thought is that dominating western management practices cannot be copied but new practices are being applied that fit their own strategies, leadership and organisational culture, such as; – Looking beyond just the shareholders interests, but focusing on the local community’s and national interest. – Doing business on the basis of improvisation, adaptation and resilience. – Providing products and services that add value. – Investing in talent and building local and national culture. ‘The India Way’ is a modern adaptation of ‘The Toyota Way’. The most important statement in the book is that Indian companies focus more on doing business via the rules of the socially responsible entrepreneur, namely the ‘triple bottom line: people, planet, profit’. Furthermore the core values focus much more on prosperity in the long term, employees and the surrounding community. This way Indian managers are respected and trusted by their employees.

TataGroup

According to the authors, the Corporate Governance policy of the Indian CEOs is not entirely without interest. The primary goal is making money but contributing to charity is equally important. Contributions to prosperity and the welfare of the community that is profited from, lead to more profit and appreciation. This is why business objectives are not solely described in economic terms. Business strategy is based on the social mission; over 50 per cent of TataGroup’s profits, for instance, goes to charity. While the current generation of CEOs has mainly become focused on making ‘fast money’ for the shareholders, and also definitely for themselves, the previous generation had a broader business focus and therefore a more positive influence. Corporate Governance has a positive effect on the employees’ motivation, helps attract and keep staff and improves the company’s performance.

Essential differences

Another important fact that the authors found is the difference in strategy focus. The authors compared results from their research to those of an earlier research done among CEOs in the United States and they found essential differences: – 98 per cent of American CEOs focus on rules compared to 41 per cent of their Indian colleagues – 78 per cent of American CEOs invest a lot of time in corporate reports compared to 41 per cent of Indians – 58 per cent of American CEOs focus on share holders compared to 41 per cent of their Indian colleagues. – when the strategy is determined we can see a reverse picture: only 47 per cent of American CEOs consider this crucial usage of time while a whopping 93 per cent of their Indian colleagues consider it crucial. – the progress of Indian organizations concerning Corporate Governance is measured by CEOs in India regularly, while their American colleague seldom does this. – Strategic Human Resource is taken more seriously in India as a business issue than in the US. Twice as many CEOs from India think that their human resource policy is the basis to their business success. [3]

Tata Consultancy Services (TCS)

My interest in ‘The India Way’ does not only come from the fact that India is an up and coming economy with a growth rate of two numbers, but also and mostly from the fact that I, as an employee of Tata Steel IJmuiden, previously known as Corus and before that as Hoogovens, am currently experiencing the transformation to ‘The India Way’. One of the interviewees was B. Muthuraman, who is managing director of Tata Steel. Furthermore Tata Consultancy Services (TCS) is one of the four Indian offshore players that is in the top five of the research conducted by KPMG Equaterra, and the Dutch customers are pleased with them. Both Tata steel and Tata Consultancy Services are part of TataGroup. We see that the ‘The India Way’ is starting to play a much bigger part in our economy and therefore in our society. It is no longer a situation that is miles away and does not concern us, but it is a present day reality. It is therefore advisable to understand the way of thinking of the people we have to work with. If we cannot beat the managers from our new competition, and it is looking that way, we might learn something from them…[4]

Links and references

[1] Website Computable: www.computable.nl [2] The India way website: www.theindiaway.com [3] Managementpro website: www.managementpro.nl [4] Several other sources: Grondslagen Administratieve Organisaties (E.O.J Jans), informatiseringseconomie (R. van Oirsouw), Wikipedia