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Five lethal mistakes in offshore software development

As I’m sure you’ve heard, there are far-away lands where the best and brightest youths flock to science and technology schools. They emerge a few years later in hoards of brilliant and eager software developers. Why not put them to work for you? They are smart, talented, easy to find and hire and they work for very reasonable pay. The big guys have been doing it for years and recently, smaller and smaller startups are incorporating offshore development into their plans.
As a development manager I have, over the years, utilized development teams in India, China and Russia. Here are some lethal mistakes to avoid:

Downplaying the culture gap

Communicating with your offshore developers may seem easy; in all likelihood they speak decent English. A friend of mine, a European microbiologist who hosts in his research lab science grad students from all over the world, commented that in recent years the level of English spoken by young foreigners has improved dramatically. I think he’s right, and I believe that what we’re seeing is a generation of young people, now in their twenties, who speak good English because they grew up with Internet access and were exposed to a lot of English content.
But beware: culture is much broader than language and communication has a lot more to it than words alone. Intonations, gestures, idioms, slang, vocabulary, unspoken assumptions, acceptable and unacceptable behavior vary wildly across the globe and these variations can lead to catastrophic failures in communication. The fact that good English is spoken on both sides might lull you into thinking that you understand each other when in fact you do not.

To avoid this mistake:

Encourage offshore participants to explain back to you their understanding of a conversation (especially if the conversation is one-sided in nature, e.g. you are assigning tasks or briefing them on a new initiative).
Document and share meeting minutes; writing gets the non-verbals out of the way.
Mind the gap; keep reminding yourself of the cultural differences that you must bridge.

Managing offshore developers remotely

The whole point in offshoring is to save money, right? Excellent offshore developers are sometimes easy to come by, but hiring good managers is never easy and not nearly as cheap. You might be tempted to skip hiring a manager altogether, tap into the startup spirit and “do it yourself” (that is: manage your offshore developers yourself, remotely). My advice: don’t!
Managing people is hard, managing developers is harder. A software development team’s manager needs to be there with the developers, meet with each one on a regular basis, get a first-hand account of their activity, successes and challenges. Unless you are an expatriate offshoring back home you already have a cultural gap standing between you and your remote team. Add to that the time zone differences and the loss of non-verbal cues that come with long-distance telecommunication and you have yourself a recipe for failure.

To avoid this mistake:

Hire a local manager for your offshore team. If the team is small (less than 5-10 developers) you can hire a “working manager”: a senior developer that also happens to have management skills. If your team is larger than that, hire a full-time manager. In any case you must have a single point of contact and accountability on the ground, close to your developers and on the other side of the geographical and cultural gaps.

Skimping on travel

International travel is expensive, time-consuming and uncomfortable. With video conferencing and web meetings readily available you feel like you are virtually there, but “virtually” does not cut it. If you don’t travel to visit your offshore team you might never interact directly with some team members (usually the more junior ones), you will never get a feel for the atmosphere in their office, you might never know what is working well and what isn’t. If you never visit your offshore team you are relying completely and blindly on your remote manager, creating a dangerous single point of failure in your organization.

To avoid this mistake:

Every six months or so clear some time on your calendar, make sure your passport and visas are in order, get a plane ticket and pack your bags.
To make things a bit easier, alternate between traveling to visit your offshore team and inviting your offshore counterpart to visit you. This will give your remote manager an opportunity to interact with other members of your local team. Travel can be a burden, but in some cases your remote manager may see these trips as an added benefit.

Failing to protect Intellectual Property

Coders handle one of your company’s most valuable assets: the code. At home you are protected from code theft by non-disclosure and confidentiality agreements, ethical norms and the legal system. Personally, I never encountered a developer that stole source code and sold it to a competitor. Both the developers and your competitors have too much to lose in terms of reputation and legal liability (both civil and criminal).
In a foreign country, do you know what the social norms are? Will the social norms protect you? Can you enforce a non-disclosure or confidentiality agreement? Can you count on the legal system? If you fail to answer these questions before trusting your offshore developers with critical parts of your code you might find yourself up the creek without a paddle.

To avoid this mistake:

Get sound advice, specific to the location of your offshore team. Do not share critical portions of your code with developers in locations with a questionable confidentiality record.

Placing marketing functions away from the target market

This mistake is common among foreign companies that start out with a development center in a low-cost locale and develop a product for the US market. Once product development is complete they would open a sales office in the US and leave product development,QA, tech writing and other functions back home where things are more reasonably priced. It hurts to spend big bucks on a US sales force when you have grown accustomed to much lower costs, but you know there is no escape from it.
But what about marketing functions? Do you really have to hire super expensive US-based product managers? Lead generation is all done via telecommunication, it’s not quite the same as sales, is it? And what about collateral writing, does it really have to be done at $80 and more per hour when your brightest developers work for less than a third of that?
The answer is yes, you have to spend the money and keep your marketing functions close to the target market. If you don’t, you are wasting your money on your US-based sales team. Instead of results, they will deliver a constant flow of complaints about the quality of leads, marketing materials and product features.

To avoid this mistake:

Once you commit to the US market, hire a local sales and marketing team, don’t blunt your own competitive edge with a marketing team that is not in touch with its own market.

Need Help?

Do you need help defining, building, marketing or selling your software product? drop me a note, I’d be happy to help.

Category: For Senior Techies

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4 Responses

  1. Thuy Nhien says:

    I am completely agreed with your point: “culture is much broader than language and communication has a lot more to it than words alone”. Also your tips to avoid this mistake are very useful.

    In addition, I want to mention Offshoring 2.1 – a remarkable approach to these pittfalls. With a management of people from the same cultural area and the application of modern communication technologies, customers don’t have to experience misunderstandings. Instead of complaining, they become an important part of the project team.

    Thanks, Avi!

  2. Jonny McPican says:

    If you are an American company selling products to Americans, then you should build them in America. If you do not, you are unpatriotic.

    • MurkyGrey says:

      Jonny, it’s hard to argue with your assertion, but the fact is that companies have no incentive to be “patriotic” and full incentive to be profitable. As citizens and shareholders we have two options: we can influence companies to start caring about being patriotic, or we can influence the environment in which American companies operate so that the two interests (“profitable” and “patriotic”) converge. Personally, I think we have better chances of success and less risk of doing damage with the latter.

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