Global Software Development - OHJ 3 Credits

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1 Global Software Development - OHJ 3 Credits Coordinator Prof Imed Hammouda Topic Outsourcing and Off shoring Presentation By Mayank Sharma

2 Quote On Outsourcing President Bush is on an eight-day tour of Asia. He s visiting American jobs. David Letterman

3 Basics Smart shoring Picking Best from All parts In shoring Within EU, America

4 Off shoring Types There are four basic types of offshore outsourcing: ITO information technology outsourcing BPO business process outsourcing covers things like running call centers, processing insurance claims. Software R&D offshore software development KPO knowledge process outsourcing covers things that require a higher skill set such as reading X-Rays, performing investment research on stocks and bonds, handling the accounting functions for a business or executing engineering design projects.

5 Why To do Money On an average a software Project in US cost about 75 USD whereas if done in developing economies cost about 25 USD Time Reduce time to market by using difference between the time zones Quality This can be done via SLA (Service Level Agreement) Performance Directly proportional to Time and Quality Risk Management Some parts of Risks are transferred to the Outsourced firm

6 When to do Unique Skills Required High Level Skills - Compiler Development - Algorithm Development - Data Mining Project Requirement Temporary or Uncertain - Introduce New Technology - New Business Process - New Prototype Development Core Competency difference - Testing - CRM (Call Centers)

7 How to Do Deciding to outsource and what and where to outsource By Strategic Level (By Meetings,Discussion, Voting Etc) Supplier Proposals RFP issued to shortlist supplier Supplier Competition Face to Face meetings,interviews and Motivation Briefing Negotiations Extra Services and Promises

8 Contd Contract Finalization SLA a example of Call Centre SLA ABA (Abandon Rate): Percentage of calls abandoned while waiting to be answered. ASA (Average Speed to Answer): Average time (usually in seconds) it takes for a call to be answered by the service desk. TSF (Time Service Factor): Percentage of calls answered within a definite timeframe, e.g. 80% in 20 seconds. FCR (First Call Resolution): Percentage of incoming calls that can be resolved without the use of a callback, or without having the caller call back the helpdesk to finish resolving the case. Uptime Agreements are another very common metric, often used for data services such as shared hosting, virtual private servers and dedicated servers. Common agreements include percentage of network uptime, power uptime, etc. Transition A transition phase involves movement of Services gradually from one place to another. Execution Starting of the services, example project implementation. Termination or Renewal Termination when terms and conditions of SLA are not followed. Renewal when work has done completed successfully and the work is been carried on with the same SLA

9 Things to be considered Before Outsourcing Cost: Few companies would outsource at all if doing so didn t save them money. The cost factor, which includes compensation and wages, infrastructure cost, and tax and regulatory cost, Risk: Every country possesses its own strengths and weaknesses, risks and rewards. Geopolitical risk Includes stability of government, corruption, geopolitics, security. Human capital risk Includes quality of educational system, labor pool, number of new IT graduates. IT competency risk Includes project management skills, high-end skills and competence (custom code writing, system writing, R&D, business process experience). Economic risk Includes currency volatility, GDP growth. Legal risk Includes overall legislation, tax, intellectual property. Cultural risk Includes language compatibility, cultural affinities, innovation, adaptability. IT infrastructure risk Includes IT expenditure, quality of key access infrastructure Market Opportunity Rating: includes expert third-party analysis of each country, its global competitiveness and IT market share. The rating serves as a check on any imbalances elsewhere in the report

10 Criticisms of Outsourcing Public Opinion Voice Against Outsourcing when they loose jobs Organizational Complexity Increases Increase in Organizational Complexity,More the Outsourced work more the complexity in management and housekeeping. Share Holder View No Body cares about their opinion, in fact they too are the owner of company Failure To Realize Business Value Only Profit making idea overrides other features like Commitment and Loyalty Quality Of Service Language Skills

11 Contd.. QoS? Real QoS might not be possible to measure in service industry like Call Centers Unequal Education Standards US has 3 year Eng and Sci Degree + All institutes not equal AUS has 3,4 Eng and Sci Degree and Associate Certificates + All institutes not equal INDIA has 3,4 year Eng and Sci Degree and Associate Certificates + All institutes not equal CHINA has 3 year Eng and Sci Degree + All institutes not equal ex HK and China NOTE- A solution like ECTS, can add more transparency and equality among ASIA, US, AUS University education Level irrespective of Country's Economic Potential Hidden Costs, Limited Transparency Simple SLA plus other formalities can go up to 10,000 pages which are impossible to read and time consuming

12 Problems in GSD Cultural Problems Asian (Ex Indian) and Western Company. Time Difference Mexico and Australia Communication Problem Accents Difference of Non English Speaking Countries Job Hopping Skilled Force changes the job frequently thus creating an uncertainty in Project Difference in Approach Spiral or Orion Model not followed everywhere, different sites with their own model Data and Project Security Plan Leakage, Ex Intel Plans to AMD

13 Solutions Cultural Problems Get Together, Kick Off meetings, Face to Face Meetings, Tours Time Difference E mail, Wiki Communication Problem Accent Problem via Training,Other Problem I M,E mail usage Job Hopping Proper Screening during Recruitment ex Motivation, Devotion Timely Perks, Rewards and Accolades Importance and Recognition of an Individual Other Factors, Mostly dealing with Human Behavior (Abrham Maslov Theories)

14 Off shoring Countries Some of the major countries/districts that provide such services are India ( Full Spectrum Services ), Indonesia (Programming, Data Entry, Customer Support), China (Programming), Philippine (Customer Support, Programming, Animation, Transcription), Russia (Programming and R&D), Pakistan (Programming, Customer Support), Panama (Programming, Customer Support), Bangladesh (Web & Software Programming, Offshore Outsourcing Service), Bulgaria (Programming and R&D), Ukraine (Programming and R&D), Belarus (Programming, R&D), Romania (Programming and IT), Philippines (Programming, R&D, Data Entry and Customer Support), Egypt (Customer Support and Programming), Malaysia (Customer Support and R&D), and many others.

15 Contd.. Large Scale Projects India, China, Russia and, Pakistan are the four leading countries that currently control the offshore programming market. According to Gartner Group, only these four countries are capable of scaling up enough to meet the demands of large scale projects Medium and Small Scale Projects Other offshore software development destinations include Vietnam, Philippines, Israel, Romania, Republic of Ireland, Eastern Europe (Ukraine, Czech Republic, Poland, Hungary), Egypt, Argentina, Bangladesh.

16 Tier Concept in Outsourcing India, offshore software development can be performed in all major cities and regions of the country. The cities are categorized into Tier 1, Tier 2 and Tier 3 based on numerous factors as mentioned below: Cities in India catering to software development Tier Cities Tier 1 Bangalore, Mumbai, New Delhi Tier 1-1 Hyderabad, Chennai, Pune, NOIDA, Gurgaon, Navi Mumbai (New Bombay) Tier 2 Kolkata, Mangalore, Ahmedabad, Bhopal, Tier 3 Coimbatore, Mysore, Nasik, Kochin, Nagpur, Indore, Jaipur, Kanpur, Patna, Ludhiana, Chandigarh, Thiruvananthapuram

17 Few Companies doing Outsourcing

18 Giving it a thought +,Must For GSD +,Must For GSD +,Must For GSD in R&D +,Must For GSD in R&D +,Must For GSD in R&D +,Must For GSD in R&D +,Must For GSD in R&D

19 Continues Mostly Developing Countries All Developed Countries

20 Drivers for Global Sites

21 Refrences Introduction to GSD by Prof Imed Hammouda Wikipedia.com, Outsourcing, Globalization, Software Development Alan Booze Report Garter Group Report Tekes Report

22 Finishing Up Thank You!

23 Questions? What will be the trend? More R&D Software Projects and Less Routine Outsourcing ( Software Development ) or the other way round R&D Software Projects Open Source, Compiler Development Normal Software Development Call Centre and Other Software Projects

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