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Offshore, Outsource, and Distributed Team

Offshore, Outsource, and Distributed Team. CS 577b Software Engineering II Supannika Koolmanojwong. Outline. Distributed Teams / virtual teams IT Offshoring Twenty practices for offshore sourcing Offshore agile development. Distributed Team. Why distributed team?.

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Offshore, Outsource, and Distributed Team

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  1. Offshore, Outsource, and Distributed Team CS 577b Software Engineering II Supannika Koolmanojwong

  2. Outline Distributed Teams / virtual teams IT Offshoring Twenty practices for offshore sourcing Offshore agile development

  3. Distributed Team

  4. Why distributed team? • Your employees will love it •  flexible hours, no commute, a personal work environment, friends & family • especially “commute & cubicle” job • Hire great people wherever you find them • Use better communication tools • A chat conversation can be archived, searchable, and visible to the entire team • online collaboration tools, IRC, P2, yammer • Still be social • Meetup every 6 months (hack week), hiking + 10 minute lightning talks • Your offices will be more fun http://toni.org/2010/03/08/5-reasons-why-your-company-should-be-distributed/

  5. Challenges in distributed teams Failure to communicate and retain contextual information Unevenly distributed information Difficulty communicating and understanding the salience of information Differences in speed of access to information Difficulty interpreting the meaning of silence Anil Hashia, John Whelan , RuchiShewaramani An Innovative Approach to Managing Distributed Teams

  6. Cross Cultural Communication metrics Small PDI means that subordinates participate more in decision-making activities High IDV means that everybody has the right of his own opinion High UAI means that everything needs to be carefully planned Anil Hashia, John Whelan , RuchiShewaramani An Innovative Approach to Managing Distributed Teams

  7. Best Practices in Distributed Teams: Communication Anil Hashia, John Whelan , RuchiShewaramani An Innovative Approach to Managing Distributed Teams

  8. Best Practices in Distributed Teams: Management Anil Hashia, John Whelan , RuchiShewaramani An Innovative Approach to Managing Distributed Teams

  9. Best Practices in Distributed Teams: Schedule Anil Hashia, John Whelan , RuchiShewaramani An Innovative Approach to Managing Distributed Teams

  10. Outline Distributed Teams / virtual teams IT Offshoring Twenty practices for offshore sourcing Offshore agile development

  11. Outsourcing Trend in 2012 • Brazil • Worldcup 2014 • Olympics 2016 • Russia • India • China • Malaysia • Mexico • South Africa • Romania • Bulgaria • Sourcing Near Home • Rural areas • Native government incentives • Domestic Sourcing • BRIC Surge http://www.outsourceoffshore.info/index.php/2011/12/outsourcing-trends-to-watch-for-in-2012/

  12. Outsourcing Trend in 2012 • Collaborative and Strategic • shift outsourcing from the back-office and into additional customer-facing techniques • Technology Convergence • social networking, mobile platform • Cloud Concerns • cyber-security and risks of eco-terrorrism

  13. The Most Expected IT Outsourcing Trends in 2013 • Social Media Keeps Expanding Rapidly • connect customers through Facebook, LinkedIn, Google+ • Nearshore Becomes Closer • reduce costs, cultural similarity. • Business Moves to Sky • Google Drive, Drop Box, ServiceNow, SkyDrive • Enhanced Data Security • reliable firewall will become issue number one in outsourcing • India and China Become Less Attractive for Outsourcing (Salary) • 10.7% for India and 8.8% for China http://www.qarea.com/articles/most-expected-it-outsourcing-trends-in-2013

  14. IT OffshoringDavis, Gordon; Ein-Dor, Phillip; R. King, William; and Torkzadeh, Reza (2006) Journal of the Association for Information Systems: Vol. 7: Iss. 1, Article 32. 2 types of offshoring • Outsource some of its activities to service providers in other countries. • In this case, the service provider hires, trains, supervises, and manages its personnel. • a contract specifies the services to be provided, as well as time and quality measures • Set up service operations in the other countries • managed as a remote service site. • Workers are hired, trained, supervised, and managed by the organization rather than by an outside contractor

  15. 6 popular offshore tasks Programming, software testing, and software maintenance; IT research and development; High-end jobs such as software architecture, product design, project management, IT consulting, and business strategy; Physical product manufacturing – semiconductors, computer components, computers; Business process outsourcing/IT Enabled Services – insurance claim processing, medical billing, accounting, bookkeeping, medical transcription, digitization of engineering drawings, desktop publishing, and high-end IT enabled services such as financial analysis and reading of X-rays; and Call centers and telemarketing.

  16. Nearshore Same continent offshoring Becoming a more common trend, instead of offshoring US to Mexico and Canada Eastern Europe to Western Europe

  17. Issues from Offshoring 380,000 IT professionals are employed offshore and will be more 3.3 million service jobs could be lost to offshoring in the next 15 years by 2010, 102,000 IT and software jobs will have been offshored from the UK =12% of today’s IT workforce 40% of Western Europe’s 500 largest firms have begun moving service operations offshore

  18. Benefits from offshoring Cost savings Job upgrading for countries sending work abroad, Employment and income for the countries performing the work

  19. Future of Outsourcing • International economics • offshoring benefits everyone in the long run • Entire global system is better off when goods and services are produced the most efficiently • Even countries that lose jobs can benefit if they innovate • IT offshoring will still expand • Various HR activities will be outsourced • For US • programming and systems development jobs in the US are being lost. • new jobs focus on the management of vendor relationships and the customizing of externally-developed software.

  20. The Risks In Offshoring Information Technology Activities Compare to manufacturing jobs, IT activities may be less well understood and/or poorly documented by the client firm Hidden structural, cultural, legal, and financial risks and costs are often overlooked Deskilling the organization (will be able to maintain over time) Disruptions arising from political upheaval or war in an offshore host country Political stability risks of the offshores Disaster recovery in the developing countries

  21. New tasks of the CIO Monitoring an outsourcing contract -legal requirements Managing accuracy and completion risks associated with offshoring Managing the database and application software risks – configuration management Managing knowledge required for systems – documentation, back ups, training Considering a distributed computing solution

  22. Skills needed to manage offshoring • Relationship and contract management • client-vendor relationship; selecting a vendor, outsourcing contract, monitoring of progress, control exerted over the vendor, level of trust • Risk assessment and management • from political risk, to risks of natural disasters; infrastructure, transportation, back up sites. • Technology assessment and monitoring • Maturity of the technology, standards • Systems implementation and integration • learn the skills that are necessary to perform these tasks with lesser levels of outside help

  23. Skills needed to manage offshoring • Business Process Redesign • analysis and modeling skills must reside in internal function ? • Integrated business and IS planning • Strategic IS planning should never be outsourced • Mission-critical systems development and testing • Retain in-house; clients often wish to perform their own post-delivery testing • Security

  24. Twenty practices for offshore sourcingRottman, J., and Lacity, M. "Twenty Practices for Offshore Sourcing," MIS Quarterly Executive (3:3), 2004, pp.117-130. • Offshore market size : $10- to $30-billion by 2005 • Controversy • Stealing domestic jobs / Cut down bonus • Improving US economy • 2003 – $36,000 service job went abroad = 0.25% of US IT jobs (worth $130,000 in US) • Cost saving 10-50% from offshoring, 68% -quality improvement

  25. Risks of offshore projects

  26. Risks of offshore projects

  27. Outline Distributed Teams / virtual teams IT Offshoring Twenty practices for offshore sourcing Offshore agile development

  28. Offshore agile development • Be Prepared • Daily scrums via Skype, standards and infrastructure • Start Small • Small team, small chunk, small timebox • Consider a Hybrid Model • Manage Actively • Not totally hands-off,  intervene when necessary • Invest in Onsite Training • Bring people over, learn the process • Pick the Right Partner • Account for Time Zones 7 tips to offshoreagiledevelopment : Computer News Middle East, ISSN 1564-0078, 10/2012

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