When at first offshoring doesn't succeed

Tough Shift - Lesson in India: not every job translates overseas, Scott Thurm, 2004

In Wednesday's Wall Street Journal, writes about one ValiCert's travails as it tried to offshore programming work, first by hiring Infosys and later by opening its own subsidiary in Bangalore.

In a nutshell, offshoring didn't work because
- ValiCert kept changing the definition or goals of offshored projects. Many projects were cancelled or delayed after months of work. This led to a) Infosys changing team members designated to ValiCert or b) software engineers at ValiCert's subsidiary becoming utterly frustrated
- Offshored projects were usually small parts of larger efforts and required intensive coordination. This approach failed because of difficulties in managing teams spread across 14 time zones, and because a lot of information that was considered intuitive or taken for granted in Silicon Valley was not available in Bangalore.
- Coordination and communication problems led to severe delays, inefficiencies and a breakdown of trust between the Indian and US teams.

Eventually, ValiCert learned how to make profitable use of offshoring and now believes that the company would not have survived without it. If at first ValiCert believed that colleagues would swap work across the globe every 12 hours, helping ValiCert 'put more people on it and get it done sooner,' now it offshores entire projects, such as adapting an entire program to a different operating system. It has also improved its communications flows between operations in India and the US to ease or at least spread fairly the burden of communicating across time zones.

Nevertheless, Brent Haines, in charge of coordinating the US and Indian teams commented that such collaboration requires extensive planning, ... 'something very unnatural to people in software.'

ValiCert merged with Tumbleweed in Feb 2002. The combined Redwood City, Calif., company's 150 engineers today are almost evenly divided among California, the Tumbleweed operation in Bulgaria, and the India office started by ValiCert. In Bulgaria, engineers write and test software, and scan millions of e-mails daily for traces of spam. In India, engineers test software, fix bugs and create new versions of one product. Last September, Tumbleweed released its first product developed entirely in India, a program that lets two computers communicate automatically and securely. Mr. Marur's team had worked on it for over for 18 months. Core development for new products remains in California, where engineers are closer to marketing teams and Tumbleweed's customers.

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