Sam Eiring

Outsourcing Software Development  “Outsourcing Software Development involves shifting of software development activities by a company to third party service vendors or software firms that may be located in offshore destinations.” (  Outsourcing began in the late 1990’s when the cost of IT development skyrocketed because of the hype of the internet.

Outsourcing  Advantages/Disadvantages  Uses for Outsourcing  Outsourcing at Thomson Reuters  Steps to Begin Outsourcing  Cost Savings  Hidden Costs

Advantages  Can save money and time  Get access to specialized labor at low costs  Cut Human resource costs  Software research at lower rates  Reduce training costs  Allows ability to provide product support 24 hours

Disadvantages  Must have very specific requirements  Loss of managerial control  Many hidden costs  Threat to security and confidentiality  Possible loss of flexibility  Language barriers  Difference in time  Initial Cost

Uses for Outsourcing  Specialized Development Teams  Specialized Testing Teams  Support services Call Center Desktop Support Helpdesk  Expanding workforces

Multi-Source Outsourcing  Multiple teams with specialized tasks Can gain access the best developers of each task Lowers Risk of Failure Can use trained testing experts Allows the company to use smaller outsourcing markets ○ Lowers cost Not a single contract Creates independence between testing and development

Outsourcing at Thomson Reuters  Location: Bangalore, India  This is an in house form of outsourcing The facility was set up as a sister company At the beginning there were 10 developers and one manager overseas and a Team Liaison in the office The employees have been an expansion to the company  Overseas Employees Divided assigned to a specific team in the office

Training at Thomson Reuters  There are Cultural Differences classes held for both employees overseas and in house. Teach the differences between different cultures  Brought overseas employees to the US to have face-to-face meetings and training  Ratings of Overseas teams for each project Survey covering different aspects of the project

Culture Calculator

Overseas Employee Rating Form Work RequestWR12345 Assigned To:Name Feedback Given By:Name Datemm/dd/ccyy Areas of ObservationRatingCommentsAreas for Improvement Analytical skill Coding skill Testing skill Process compliance / follow BDSG standards Communication skill On time escalation of issues Quality of deliverable Time management skill Task management skill Productivity Responsibility / commitment Rating scale: 1=Low, 5=High

Overseas Employee at Thomson Reuters  Since they are in house they are treated the same Time reporting They do not have any technical differences  Some Issues they have Specific Instructions Language Barrier Time Difference

Steps to Begin Outsourcing  Imagine a Software development Partner Draw up what your ideal partnership  Selecting your International Outsourcing Partner Request referrals Contact each potential Partner Pick a partner who uses the same Development Process  Ask for Code Samples Helps determine the skill level

Steps to Begin Outsourcing  Protect your rights Use a Lawyer Security Deadlines  Good Communication Face to Face communication Phone

Signing a Contract  Identify security requirements  Require your partner to provide a 3 rd party security audit  Allow the right to perform process audits.  Set turn around times  Require Documentation for all steps of development

Cost Savings with Outsourcing  Overseas help does not need: Healthcare Social security Pension Paid Time off Bonuses Office Space Computer and Software Licensing

Cost Savings with Outsourcing BenefitMedian Amount% of Total Base Salary$80, % Bonuses$1,9991.8% Social Security$6,3315.6% 401k/403b$3,1452.8% Disability$8280.7% Healthcare$6,1035.4% Pension$4,1383.6% Time Off$10,1869.0% Total$113, % Overseas Developer = $20/hr x 40hr wks = $40,000

Hidden Costs  Initial Costs: Research to find a partner Training Setting up a process to manage and send work to your outsourcing partner  Contact Liaison  Errors from Overseas Developers

Conclusion  Advantages/Disadvantages  Uses for Outsourcing  Cost Savings  Hidden Costs  Outsourcing is Different for each company  It is a long term investment  It is a constant improvement process

References  Miller, Brett. "Selecting a Custom Software Development Company." Custom Software by Preston blog. Custom Software by Preston, 1 June Web. 15 Feb  Palisade : Controls for Outsourcing Software Development. Oct Web. 5 Feb  Berg, Ryan. "Guest View: Addressing security in outsourced applications - SD Times: Software Development News." SD Times: Software Development News. Software Development Times on the Web, 15 Aug Web. 5 Feb

References  Mullaney, Jennette. "Software development trends in 2008: Outsourcing, agile development." Software quality management, testing and QA resources - SearchSoftwareQuality.com. 26 Dec Web. 5 Feb  Filev, Andrew. "Adopting and Benefiting from Agile Processes in Offshore Software Development." MSDN: Microsoft Development, MSDN Subscriptions, Resources, and More. July Web. 5 Feb  Kielpikowski, Bob. "Outsourcing At Thomson Reuters." Telephone interview. 19 Feb

References  "Salary Wizard - Java Developer." MySalaray.com. Mar Web. 04 Mar

Questions ???