Tips for successful offshoring: Building an internal development team

May 24, 2019
Software Development

The Software Development team must have sufficient software development know-how, in particular, procedural models and the analysis and preparation of requirements. In addition, very good language skills are indispensable both in German (communication with the specialist department) and in English (communication with the offshore partner). In addition, practical experience in intercultural cooperation and a willingness to travel regularly to the location of the offshoring provider are desirable.

Software Development

Practical experience in intercultural cooperation is often underestimated but important in offshoring. Mistakes made here are difficult to revise and have a lasting negative impact on the working atmosphere. A development team in India reacts completely different than one in Slovakia. For example, in traditional Asian cultures, it is not common to discuss developmental deficiencies across hierarchical levels. In all cases: It is important to get to know the development team personally and to know about the customs and traditions of the other culture. These factors have a positive impact on collaboration and outcomes. The cooperation exclusively on documents to the requirement specification as well as reducing phone conferences with hard-to-understand English is risky and rather disadvantageous.

Selection of the offshore company

The next step before the actual outsourcing is choosing a suitable offshore company. Appropriate means of the offshoring partner fits in with the ideas about the corporate culture, software architecture, and the development process. The following questions must be resolved by the selection procedure:

  • Does the offshore company have the technical know-how to continue existing development projects and to integrate new ones into the application landscape?
  • What about the resource management of the provider?
  • How soon is the company able to respond to new projects through a larger team of qualified personnel?
  • What knowledge does the company have, for example, in lightweight, agile software development?
  • Which models of order processing are possible: fixed price or only by effort?
  • Which references can be mentioned for all qualifications?

Last but not least, under the previously mentioned criteria for the qualification of the offshore company, the price-performance ratio in comparison to competitors has to be scrutinized. One should not rely on advertising-effective certifications such as CMMI alone. The direct conversation with the provider, as well as the contact with someone who has experience with the provider and is able to report on his project experience unadorned, is far more valuable.

Once the selection has been made, it is necessary to formulate and conclude a framework agreement. It must contain the general contract components common to all development projects. The advantage: These components of the contract need not be included in every project contract, but can be easily referenced. Contract terms should include, for example:

  • Code quality rules,
  • Warranty,
  • Conformity to the standard architecture,
  • Coordination in the selection of programming libraries,
  • Continuity of the staff,
  • The underlying pricing model for each project and
  • A passage for the protection of intellectual property.

It should also be noted that the contract must also be internationalized. This means not only a translation into the local language but also that the offshoring company must accept if the contract is drafted under law. Alternatively, you can also set up different contracts, which are subject to the respective state law.