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August 24, 2006

Outsorucing

I am working extensively on outsourcing.
As the cost per hour of developers in Norway is now approaching USD 100-200 we are forced to go offshore. I have had good experience with offshoring to India, China and the Philippines at USD 2-10 per hour, the logic is more than obvious.

What are the challenges of outsourcing then?
The #1 challenge is project management. I have found that for every hour I buy offshore we need to spend another quarter to half hour in project management in Norway.

Reducing the cost of project management in offshoring is one of my major priorities right now.

August 26, 2006

Outsourcing instructions draft

I am working on developing best practices for outsourcing projects.
Outsourcing provides some major challenges. The solution is to formalize the processes.
This might look cold and stiff, but it will provide a framework for more human person to person contact.

Instructions for outsourcing projects - Draft.

Instructions For Outsourcing Projects:
Quality Quality Quality

In general:
Welcome to project XXXXX.
The main reason we do outsourcing is the cost advantage of going offshore. The cost difference is usually more than 1:10 between the offshore and onshore cost. We therefore want to outsource as much of the job as possible. Most of the cost in most outsourcing projects are actually the onshore project management cost. A major aim is therefore to reduce the project management cost.

Key points that should be cleared when starting any offshoring project:
- How much USD will the client cover and reimburse for miscellaneous petty cost?
A small amount like USD 20-100 is usually a good idea to cover small incurring cost to buy needed licences, services etc.
- State what time zone the client is in. Use this time zone in the communication.

Major points:
- Think long term. Build quality into everything you do.
- Make it possible for someone else to continue upon and build upon your work.
- Use as little of your clients time as possible.
- Use standard components, standard protocols, standard interfaces.

Instructions:
- Plan your work well and show a clear plan for the procedure you intent to follow.
- Structure your work well.
- Document what you do well. In the code and in reporting.
- Preferably use Open Source code.
- Preferably use Open Source components that are live and supported.
- Research the software components you would like to use and compare them with alternatives.
Show why you have chosen to use one component over another.
- Write as little custom code and custom solutions as possible.
- If you need outside help for something. Suggest who and how this will be done.
- Provide links to the Wikipedia article whenever you introduce concepts that might be unfamiliar to your client.
- Provide examples with URLs.
- Show don’t tell how you suggest it.

You are not allowed to represent client XXX in any way. Do not contact any third party without prior agreement with you client.

- Work to use as little of your clients time as possible.
Try to answer any questions yourself.
Ask around in forums etc for answers instead of asking your client.
Suggest solutions to your client.
Have alternatives when suggesting things.
- Do not ask your client to do something you can do yourself.
Example: If you need a webhosting account to upload a sample, find it and set it up yourself, do not ask your client to "get you a webhosting account".

- At last: Before you send off an email, status report etc.
Have you gone over these communication instructions?
Did you follow all the instructions?
- If you see that the project will be delayed communicate this immediately.
- Clearly state at the end of the communication:
# Are we on target
# Who is working on this project, provide the names of the individuals.
Do not assume that someone is good enough, always clearly state who and how much time.
# How much time are they devoting to this project
# Will there be delays
# What is the next action to be taken and by who:

Preferably state a clear progress that you will make without further instructions from the client.
Examples:
"I am working full time on this now. I will research these four suggested alternatives and report back to you within four days."
"I and the two new Java coders (Andrew Giilupra and Tony Perez) will be working full time both Saturday and Sunday here in the office and will send a workable prototype back to you Monday morning your time"
"I am awaiting your answer." (Not a very good message but sometimes necessary of course.)

September 3, 2006

Micro Outsourcing

Easy things to outsource are:
Single bug fixing
Graphical design of graphical elements
Simple one on one support
Install software packages
### This is really Micro Outsouring. This can be done without on site precense.

A bit more complicated:
Webdesign of full websites
Works on good software packages where the end result is clearly described
Clearly identified software fixes that one person can do
### This is really Micro Outsourcing. This can be done without on site precence.

Hard:
Software fixes that are not clear from the outset
Software development

Very hard:
Ongoing efforts over time where Service Level Agreements SLAs must be clearly defined.
Collaborative efforts where different individuals or groups must work togheter and coordinate efforts
### To be successful at this you might need on site precence. This lifts the whole effort up to a completely new level.


As previously mentioned the project management part is the hardest part of outsourcing.
One way to go is to break down complicated outsourcing jobs into many easy micro outsourcing jobs. You can then also set several teams on doing the different micro jobs and build as if playing with Lego. This does demand quite a bit from the project manager.

The question is: can outsourcing efforts be self managed?
Can you hire hundreds or thousands of developers in the developing world at USD 1+ per hour and have them self manage to create a valuable product or service?

It is a billion dollar question...

September 13, 2006

Outsourcing

Kopi av leserinnlegg på Digi.no:


Den som først utvikler en velfungerende metodikk for IT outsourcing fra Norge og Norden kan skape noe stort. Vi er enige i konklusjonen fra Ethos, utvikling vil flytte ut av Norge. Logikken er klar, timeprisen i Norge er nå 1000+ kr, i Filippinene kjøper vi timer for 30 kr timen. Men, make no mistake, dette er vanskelig å få til. De aller fleste prosjekter så lang har mislykkets.

Kina er spennende, vi har kjøpt utvikling derfra, men Kina har også en rekke problemer. På kort sikt er språket det viktigste, de er ikke gode i engelsk. Dernest er miljøet svært dårlig, Kina er ikke et sted å la barna vokse opp. Geopolitisk risiko skal man ikke glemme, før eller senere smeller det ref Tinanmen, Taiwan mm. Til sist har Kina en tikkende aldringsbølge om 20-30 år.

Selv satser vi på Filippinene.
- Gode i engelsk, det er offisielt språk i Filippinene.
- Kulturmatch med Norge. Norsk sjøfart har lenge foretrukket Filippinere de er hyggelige og joviale.
- Hyggelig rent miljø utenfor sentrale Manila.

Blogger en del om dette på:
http://www.lysglimt.com

Hans Jørgen Lysglimt

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