Tips for Offshoring

Having just read Why you need to get rid of your freelance developer ASAP, and the comments under it, I can see that people are really clueless about offshoring. It’s a magic box that you put pennies in, and great code comes out a few weeks later!

Having worked for a few companies that sold themselves as “a magic box that you put millions of dollars into, and great code comes out a few weeks later”, I know that this is a serious misconception. Subcontracting is fraught with peril. Offshore subcontracting is fraught with more peril, but it costs less per hour. In both cases, the peril is avoidable, but avoiding it requires that you manage the relationship carefully.

I’ve worked with offshore teams on a couple of occasions, and in one case I was fortunate enough to get sent overseas to work with the team in their own offices. I think I probably have more direct experience with offshoring than most developers or technical project managers, and I’ve seen how offshored projects can go awry, so I thought I’d share some tips for those of you considering offshoring a software project, or those involved with such a situation already.

One thing to think about first is whether you’ve really looked for folks locally. Pretty much everywhere I’ve worked, the management has been vehemently opposed to posting a public job listing. Simply spending $75 or less on Craigslist was too much to spend for someone who’d probably be paid about $75/hr. Seriously. I’ve basically been limited to finding people I know, from past work or a mailing list or LinkedIn, and if nobody is available, panic! We need more people but there’s noooobody out there! Really? Have you tried?

A second question to ask is whether you could use a part-time (fixed # of hours/wk) or freelance person, and if they have to work in the office or not. If you’re about to hire someone thousands of miles away in a different time zone, you might want to make sure there’s not someone in town who just doesn’t feel like commuting but who’ll answer the phone during your business hours, or if there’s someone with a kid to take care of, who would be happy to work their butt off 5 hours a day in the office, but who needs the rest of their day to spend with the kid. Remember, you’re considering adopting a serious amount of communication overhead in order to get someone to work for you; you might do better to just find a 1/2 time person who is in the next room for a big chunk of each day.

Anyway, let’s assume you’ve exhausted those options and you’re going to definitely hire some folks in a foreign country far away.

Here are some questions to ask about the specific situation you’re evaluating, some of which are similar to things you’d want to ask about non-offshored situations.

Can you fire the developer without firing the project manager? Or are they a team that you have to fire as a unit, and lose all institutional knowledge? This gets even worse as the team gets bigger. Can you afford to can the whole development organization if you don’t like the way things are going? In other words, are you clear on whether you’re hiring a PM and having them hire developers in turn, vs. hiring a company that will act as a subcontractor?

Will the project manager fire the developer and find someone better, if the PM determines that the developer is not working out? Or will they try to cover up for it, or not worry about it since productivity is not their incentive, but keeping billable hours high is? Bear in mind that you may be paying the PM’s company one rate and that the developers may be paid 1/2 of that, and both you and the developers may see that as a really desirable hourly wage. If you think the PM works for you, then the developers should be paid by you, not by the PM, or at least you and the developers should have agreed on what the PM will pay them. Skimming contractor wages is common practice in the US, too, and depending on how extreme it is, it can create serious incentives for the PM to find new and inventive ways to cheat you.

Will the team’s primary language be the primary language used in your source code, and if so, will that limit your options if you decide to fire them and hire someone else? This isn’t a big issue for India, China, and Russia, but for some languages, you might have a very hard time finding another team that can read and understand the source code. You might also find that it’s impossible to integrate a local developer into your team because they only speak your language, not the language of the offshore team.

Are you sure they’re only working on your project, full time, and billing you their actual hours? Again, 150% of a low wage for you may not be a lot of money, but to them it might be livin’ large, and worth the risk of getting caught padding hours. As far as my moderate research can tell, there’s no systematic, reliable, direct way to measure programmer productivity (not that people haven’t been trying for decades to come up with a way to do this), so you pretty much have to have someone on your end working closely with the team who can make a subjective judgement as to whether they really need 12 weeks to do something, or if 8 people are really working on your project all day every day on their end, or if they’re just scamming you.

Do you know that the developer you thought you hired is the same person who is coding for you? This is a textbook US consulting company scam: bring in the rockstars with the stellar resumes for the sales pitch, and then gradually roll them off onto the next new project, backfilling with clueless newbies, at the same billable rate as the rockstars.

Of course, falsified resumes are a problem too, just as they are here. If the company is in another country, they may do things like making up impressive-sounding universities and companies to pad resumes, or just copying someone else’s resume and putting their name on it. I have had a resume sent to me by a colleague who said it sounded strangely familiar. It belonged to a person that we had worked with, and was copied verbatim, with the name changed. I was on a 2 person team with the actual owner of this resume; I’m pretty darn sure the third guy wasn’t sitting in the little office in Mountain View with us unnoticed. In another case, a large offshoring company introduced a team from India and even flew some of them over to meet us. Two of them were supposedly the project technical leads, but in 3 months they never responded to my emails, never checked in code, and never were available for conference calls, and the PM made up excuse after excuse for why they were missing. We received invoices with their hours on them, and I couldn’t get our folks to stop paying for them. I’m convinced that they never worked on our project.

Is the professional culture in the offshore country the same as in yours? For instance, do they work exactly 8 hours a day and then bail, even if they promised they’d get something done today and it’s not done? Will they stay late, work weekends, etc. if you say something is an emergency? Most cultures in the rest of the world consider U.S. and U.K. working hours and work culture to be too long and too intense (and they’re right, but that’s a different issue). A colleague told me a story about an offshore team that was working on fixing a serious production bug which the U.S. team was freaking out about and clearly communicating the level of urgency of, but which didn’t stop the offshore team from quitting at the usual time on Friday and not working again until Monday even though the problem wasn’t resolved. ASAP doesn’t necessarily mean what you think it does, if the person on the other end is not on the same wavelength about work culture as you are. Getting someone to work all night or all weekend may not be negotiable, or it might just cost time and a half, or double, or something like that. Just make sure you have that spelled out explicitly, and if that means you need a “B team” in another time zone, or a local developer resource, so be it.

My favorite model for offshoring basically eliminates the subcontracting agreement, making the PM and developers (and anybody else you want to hire offshore) part of a wholly owned subsidiary company in their country. Instead of treating them as a unit, treat them as individuals working for a unit that you own, so you can give raises individually, replace the manager if necessary, and generally so that you can keep working with your subsidiary continuously no matter what happens. This means that you need to be pretty hands-on with managing them, but you have to do that no matter what.

Hope this helps!

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