Defeating the Odds of Offloading the Offshore Vendor

This isn't the case that customers are satisfied with the outcome of the overseas outsourcing steps.

The causes could possibly be:

• Not an adequate decreasing in the cost of Application/product development or maintenance because of outsourcing :  One of the reasons for groups selecting the offshore outsourcing method is to lessen the overall cost, leveraging labor arbitrage. However, if the expectation is based on individual to individual transition from onsite to offshore, it will not be actually possible to match the desires, unless suitable planning is done by the offshore provider towards sorting out a robust program management framework, both onsite and offshore, and processes for knowledge transition, knowledge management and automation using tools.

• Insufficient quality of results: The quality of deliverables may be unsatisfactory due to necessities not being captured properly, or damaged design or simply poor quality of development and testing.  

• Non-adherence to SLAs: Despite the nature of code delivered, the purchasers will not be happy if the SLAs are not met i.e. the fixes are not delivered in time or the system uptime requirements are not met etc.

• Poor quality of communication and report generation:  Well thought and thorough reporting and communication with the customer on a consistent basis is essential to cope with the distance and the cultural gap between the customer and the offshore vendor. Any exception in this aspect can result in serious customer unhappiness. 

In fact, a close analysis of the results of customer satisfaction surveys shows that in a large percentage of cases, the customers are not satisfied with their offshore outsourcing initiative or the facilities provided by the offshore vendor and would like to look for suitable alternatives. 

While many organizations may look at in-sourcing as an option, this in most cases may not be practical due to:

1. IT budget may need to be significantly elevated and the administration may not be willing to do so.
2. People may have moved to activities that they would consider as more exciting and may not be willing to move back to the old activities, and getting new people trained may result in shortage of critical company knowledge.
3. The offshore vendor may have used technology and tools, an awareness of which may not be available within the customer’ company.

In such situation, the option, if one existed, that will be most attractive to the customers is a seamless migration of the entire application portfolio to another vendor that can better meet the customer’s expectations.

The option that is now available to such potential buyers is an aggregator platform with all the components built in to deal with the issues most commonly linked to lack of client satisfaction with offshore outsourcing:

1. Quality onsite Program Management: The experience of last 2 decades of offshore outsourcing shows that onsite program management needs to be provided by a specialist top quality IT consulting company, preferably based in the USA that has deep-rooted customer relationships with US enterprises and has tested track record of having managed difficult applications.
2. Quality offshore Program Management: It may also be valuable having a specialist Offshore Program management organization provide oversight on offshore delivery to ensure that quality and SLA expectations are met.
3. Best of breed delivery organizations: Potential customers now expect the delivery organizations to have in-depth knowledge of their business and also to organize the state-of-the-art.  To meet such predictions, it may be necessary to have different vendors work on different programs depending on their area of super specialization.