Mr. Martin

Technology

Thinking About Global Sourcing? 5 Steps that can Bring it all Together

By Maurice Martin, President, COO & Founder, iRise Inc.

Today's savvy consumers not only compare your brand and your online offerings with your competitors; they compare you against every other site on the Internet. New capabilities are emerging every day on the big consumer sites that the hospitality industry will soon have to emulate.

Hotel brands must produce and maintain an integrated offering that neatly presents all properties and services, while providing a best-in-class user experience. Customers expect that offering to include advanced features: online reservations, loyalty program redemption, local restaurant recommendations, tickets to attractions, smart profiles and much more.

The demands on IT organizations are rising dramatically yet few hoteliers maintain the internal resources to stay competitive on a rapidly changing e-commerce playing field. In fact, many IT budgets remain flat or are in decline, forcing companies to turn to lower cost delivery models like offshore development as a cost-effective way to augment staff. But is this model really viable?

The Challenge

The growth of global outsourcers in the last few years has been nothing short of phenomenal. Yet most of this growth has been focused on taking on maintenance and support functions that could be easily moved offshore. The next wave is offshore application development. Many companies are moving in this direction.

The promise of global sourcing has been faster, cheaper development capabilities without sacrificing innovation or quality. Sounds great, right? We can get four times the work done for the same cost. Unfortunately, the expected savings can be slow to realize - if they materialize at all. Dealing with time zone, language and cultural barriers can bring even the most organized project teams to a halt. Moreover, communicating what the end product should look like, and the requirements therein, contribute greatly to missed expectations.

"In offshore outsourcing relationships, companies often struggle with communications challenges. This struggle is most debilitating during the requirements and specification stage: Users are unable to express their requirements clearly enough for a vendor to properly interpret and implement those requirements. This problem leads to extensive rework and end user dissatisfaction. Both results are expensive and, ultimately, negate any value an offshore outsourcing relationship can deliver." (source: "To Eliminate Communication Issues, Introduce Your Offshore Vendor To Your Consumer," Forrester Research, Inc., April 2006)

So what's the problem?

Many organizations cite communication as the single biggest reason that outsourcing projects fail. It turns out that getting a remote project team in alignment with a common project vision and business requirements is at the core of the communications challenge. Makes sense; most companies have trouble communicating between colleagues down the hall - now imagine trying to get a remote project team on the same page. When key project deliverables don't meet the needs of the business, expected savings are quickly eroded by costly rework, time to market delays or worse - poorly designed applications that are rejected by customers.

Show Them

A sizeable chunk of the communication issue can be resolved simply by replacing words and text with images and interactions. When it comes to new project definition and development, application simulation is an ideal solution. So what's application simulation?

Application simulation is simply computer-aided design for business software. A simulation is a fully functional model of a proposed application; assembled before you start coding. Simulations replace the large text documents that most companies use today to specify requirements.

Think about how other industries have solved their outsourcing problem. In the manufacturing, aerospace, automotive and semiconductor worlds, computer aided design (CAD) tools replaced drafting boards decades ago and are used to create precise visual models for what to build. The models can even be tested virtually, cutting time to market, reducing costs and risks and improving quality. The Boeing 787 is a classic example; the new jetliner is being assembled from large component parts outsourced to many different vendors. CAD models and designs are the key to making this transformation; everyone has a common visual blueprint for what to build.

As software becomes more complex, communicating requirements becomes more difficult, even when we're all speaking the same language. But imagine if you could present your outsourced partner with an interactive simulation of your new application that looks and acts just like the final version. The developers could use the simulation as a blueprint for what to build, rather than interpreting static wire-frames, screen shots and/or text-based requirements documents.

5 Steps to Better Communication

Simulating your business software before you build is a powerful way to eliminate communication gaps with offshore partners, but to fully realize the benefits of outsourced development, you may need to revisit a number of your business processes on both sides of the relationship. The following steps are best practices. How would you apply these to your own organization?

Step 1: Select Appropriate Projects

Upon encountering communication gaps with their offshore partners, many companies are swift to place blame on the partner or the outsourcing model in general, when in reality, the root issue is the project should never have been outsourced in the first place. Not every project is appropriate for outsourcing. Small scale projects with short lead times are at great risk because a simple misunderstanding can have a significant time-to-market impact that cannot be made up later in the cycle. On the other end of the spectrum, offshore partners may prove difficult to manage on your largest projects, as the sheer scope makes it difficult for team members to focus on the shared end goal.

Many companies apply simulation as a quick way to visualize a project's scope early in the definition phase and determine which projects to develop further. Simulating an application may make the project appear more manageable than expected or you may uncover unforeseen use case scenarios that significantly extend the scope. Additionally, large projects with phased releases can be simulated end-to-end, to give stakeholders a high-fidelity working model of the final product once all the pieces come together.

Spending the time to prioritize projects that lend themselves well to outsourcing will pay off in higher success rates, stronger relationships with your offshore partners and company confidence in the outsource model and your ability to manage it.

Step 2: Set Common Goals

Every line-of-business owner understands the value of communicating clear goals around which the team can rally and drive toward a common end state. When establishing your relationship with outsourced partners, it is critical to present your vision up front, identify shared goals, agree upon performance metrics and literally have all parties approve the strategy in writing.

It is essential to understand the "before" scenario from which the "after" results may be measured. Many companies are not clear about their application goals and therefore cannot judge results. By simply understanding what would move the dial for your company and knowing what success looks like, your organization can drastically improve project success.

When working with offshore teams you have little control over details such as internal processes, team dynamics or even standard working hours. Attempting to micromanage partners leads to additional, unnecessary communication issues that slow the project. Managing against a common goal enables your partner to take the path that best suits their business culture, and ensures the entire team meets at its final destination on time and on target.

Step 3: Establish Clear Roles

You can avoid communication missteps with your outsourced partner simply by establishing clear roles and standard lines of communication. Attempting to communicate with employees in the wrong level at any organization can result in vague responses or delays in obtaining accurate information, and when the partner is offsite, you may not know how to properly escalate the conversation. The entire model may seem broken when in fact, you just need the correct name and contact info.

In an ideal situation, you should have a single point of contact on the offshore side who is a recognized peer with key members of your internal team. Communicating through the proper channels will make a world of difference in the process flow, leading to strong relationships that erase the lines between internal and external players.

Step 4: Identify Team Benefits

"Outsourcing" is a term that often instills a degree of paranoia, which can permeate your entire team as employees question the stability of their roles within the organization. Is outsourced development just the first step? What does this mean for me? In the worst case, internal team members may wish to see poor communication lead to project failure in the hopes of sabotaging the outsourcing model.

It is imperative to have open communication early on about the motivation for choosing to outsource and the decision's intended benefits. The reality is outsourcing is often a sound business decision intended to strengthen revenue streams, gain a competitive edge and ultimately drive business growth. Employees should be encouraged to focus on the benefits of healthy growth, which plays a greater role in job security than offshore Web development.

Outsourced development impacts all members of the team from business analysts and project managers to visual designers and QA testers. Work with your team to reevaluate their processes and embrace the benefits of outsourcing. Ensuring all team members realize the value of outsourcing will encourage them to do their part to meet the communications challenges, keep the project on track and ultimately prove the model through faster ROI realization.

Step 5: Evaluate and Measure

Recognize your next outsourced project as a pilot. Choose an appropriate project, establish clear goals and metrics and ensure all team members understand their roles and how they will realize the benefits of an outsourcing model. Lay out milestones to check in on progress and follow up with mentoring sessions to address pain points before they derail the project. Finally, document your evaluation of the completed project and measure results against objectives. Any challenges must be recognized as lessons learned, corrected in an evolving software development lifecycle and overcome in subsequent projects.

In the hospitality industry, it's in our nature to think globally. Every day, we go out of our way to meet the needs of all guests, regardless of differing languages and cultures. We encourage our guests to embrace travel and extend their relationship with our brands by frequenting our destination sites - or those of our alliance partners - around the world. In short, we get the fact that offshore communication challenges can be overcome. And we demand that when these issues stand in the way of business growth, they must be overcome.

Armed with global sourcing best practices as applied to new application development, you can confidently apply this model to your business and recognize measurable benefits. Celebrate key wins and champion them as building blocks toward successful implementation. Greater productivity and the fiscal benefits promised by outsourcing are closer than you may think.

Maurice Martin founded iRise on an early and accurate prediction of Java acceptance and Internet growth in 1996. In addition to his business management role, he shapes the iRise corporate vision, and guides the product strategy and roadmap. He gained his business and technology acumen during tenures at Deloitte Consulting and Accenture, working with clients such as Capital Group, Kaiser Permanente and Southern California Gas Company prior to founding iRise. Maurice earned a B.S. in electrical engineering from the University of California at Santa Barbara. Mr. Martin can be contacted at 310-426-7886 or mmartin@irise.com Extended Bio...

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