International Software & Productivity Engineering Institute Best Practices for Launching and Managing Outsourcing Subsidiaries Vladimir L Pavlov, INTSPEI Chairman and Chief Strategy Officer

Agenda 2 INTSPEI OverviewBest Practices How Can INTSPEI Help You Launch Your Outsourcing Facility?

Global 500 Companies 3

Productivity Strategies for a Software Company Partner Ecosystem’s Productivity Clients’ Productivity Employees’ Productivity 4 Decrease Spending Increase Outcome

How Can INTSPEI Help You Grow Productivity of Your Employees? We will help you optimize your existing software development process SDLC = Software Development Life Cycle SDLC Fine-Tuning: Increase Outcome We will help you create your new software development subsidiary in Eastern Europe SDC = Software Development Center SDC In-A-Box: Decrease Spending 5

SDLC Fine-Tuning 6 The most important decisions (and most expensive mistakes) are done at the beginning of the project The initial amount of quality control is minimal and then grows as development moves forward. This results in a costly rework (often hidden) on the late stages of the project INTSPEI SDLC Fine-Tuning addresses this problem. We enable our clients to reduce delays between bug insertions and bug fixes After SDLC Fine-Tuning, your engineers will start discovering and fixing critical mistakes virtually immediately - when introduced - not at the late phases where they are the most expensive to resolve Requirements Architecture Detailed Design Construction Maintenance Phase That a Defect is Corrected Phase That a Defect is Created Cost to Correct Cost to correct a defect greatly depends on how early it was introduced and revealed

SDC In-A-Box Turn-key outsourcing solution: INTSPEI creates a software development subsidiary for a client Currently we offer our services in Armenia, Belarus, Russia and Ukraine We can also help our clients to launch a subsidiary in any other Eastern European country INTSPEI cares about everything – hiring, facility, logistics, local legal requirements, business-processes, etc. The development center is launched as client’s subsidiary Alternatively, it can be created as INTSPEI subsidiary and then (when the client feels comfortable) the ownership is transferred to the client 7

Agenda 8 INTSPEI OverviewBest Practices How Can INTSPEI Help You Launch Your Outsourcing Facility?

Awareness Of Geo Difference Recommendations For USA / Western European Companies Learn differences between CEE countries Learn differences between the capitals and “regular” cities 9 Recommendations For Eastern European Companies Benchmark your offerings against global market Do not be afraid to outsource to the USA / Western Europe Focus on natural partnership opportunities

Integrity Recommendations For USA / Western European Companies Do not plan to do in CEE anything you would not do in your own country 10 Recommendations For Eastern European Companies Learn about the USA Foreign Corrupt Practices Act

Consistent Business Processes Recommendations For USA / Western European Companies 11 Recommendations For Eastern European Companies Learn about the USA Foreign Corrupt Practices Act Use the same business processes for all sub-teams Utilize process-patterns for distributed teams Use the same business processes for all sub-teams Utilize process-patterns for distributed teams

MSF Team Model 12 Advocacy Solution Delivery Development Test Release / Operations User Experience Product Management Program Management Architecture Solution Design Solution Definition Solution QualitySolution Usability Solution Construction Solution Deployment

MSF Team Model for Software Outsourcing Projects 13 Western Europe / USACEE Development Test Release / Operations User Experience Product Management Program Management Architecture

Best Practice: In Software Outsourcing Projects All Functional Areas Should be Covered on Both Sides 14 USA / Western Europe Program management Development Test User Experience Product Management Program management Development Test Release Management User Experience Product Management Release Mngmnt CEE Architecture

MSF Risk Management Discipline Risk Statement Risk Database, Risk Concepts and Processes Identify Learn Control Track and Report Plan and Schedule Analyze and Prioritize Risk Assessment Document Top n Risks 15

Risk Management for Software Outsourcing Projects 16 Western Europe / USA Risk Statement Risk Database, Risk Concepts and Processes Identify Learn Control Track and Report Plan and Sched ule Analyz e and Prioritiz e Risk Assessme nt Document Top n Risks Risk Statement Risk Database, Risk Concepts and Processes Identify Learn Control Track and Report Plan and Sched ule Analyz e and Prioritiz e Risk Assessme nt Document Top n Risks CEE

Best Practice: One Transparent Risk Management Process for All Sub-Teams 17 US A / Western Europe Risk Statement Risk Database, Risk Concepts and Processes Identify Learn Control Track and Report Plan and Schedule Analyze and Prioritize Risk Assessment Document Top n Risks CEE

IBM Rational Unified Process 18 Phases Management Environment Business Modeling Implementation Test Analysis & Design Preliminary Iteration(s) Iter. #1 Disciplines Iterations Iter. #2 Iter. #n Iter. #n+1 Iter. #n+2 Iter. #m Iter. #m+1 Deployment Configuration Mgmt Requirements ElaborationTransitionInceptionConstruction

RUP Disciplines For Software Outsourcing Projects 19 CEEWestern Europe / USA

Best Practice: All RUP Disciplines Span All Offices CEEUSA / Western Europe ElaborationTransitionInceptionConstruction 20

Project Postmortem 21 CEE Western Europe / USA POSTMORTEM 21

Best Practice: “Big Postmortem” For All Project Stakeholders 22 CEE USA / Western Europe POSTMORTEM

Relations With Local Universities Recommendations For USA / Western European Companies 23 Recommendations For Eastern European Companies Build relations with local universities Establish your own educational facility Build relations with local universities Establish your own educational facility

CEE Job Market Specifics 24 Two of CEE countries (Russia and Ukraine) are in the list of Top 5 the most educated countries in the world CEE software companies cry that there are not enough qualified resources on local job market

Agenda 25 INTSPEI OverviewBest Practices How Can INTSPEI Help You Launch Your Outsourcing Facility?

SDC In-A-Box Turn-key outsourcing solution: INTSPEI creates a software development subsidiary for a client Currently we offer our services in Armenia, Belarus, Russia and Ukraine We can also help our clients to launch a subsidiary in any other Eastern European country INTSPEI cares about everything – hiring, facility, logistics, local legal requirements, business-processes, etc. The development center is launched as client’s subsidiary Alternatively, it can be created as INTSPEI subsidiary and then (when the client feels comfortable) the ownership is transferred to the client 26

SDC In-A-Box: The Process Defining Scope Of Work Client and INTSPEI agree on the list of people to hire, office space requirements, business processes, budget, etc days Launching the Software Development Center INTSPEI sets up an office for the client, deploys the infrastructure, hires people, performs the paperwork to meet local legal requirements, etc. 2-5 months Managing Current Operations (optional) INTSPEI manages outsourcing office As many months as the client needs 27

SDC In-A-Box: Two Ownership Options Software Development Center is owned by the client from the very beginning Client Initially INTSPEI owns the Software Development Center As soon as the client feels comfortable, the ownership is transferred to the client INTSPEI 28

International Software & Productivity Engineering Institute Money-Back Guarantee Available for a period of 30 days after our services are completed 10% Discount for Participants of the CEE Outsourcing Summit Available for a period of 6 months after the conference

Next Steps 30 Assess your company’s productivity strategy: Employees’ productivity? Productivity of your customers? Productivity within your partner ecosystem? Contact INTSPEI Talk to me at a coffee-break Mail me at Order INTSPEI services: SDLC Fine-Tuning to increase outcome of your engineering process SDC In-A-Box to bring down the costs of your engineering process

International Software & Productivity Engineering Institute Thank You This presentation was delivered on September 12, 2007, in Kiev on the First CEE Outsourcing Summit You can download it from