Offshore Outsourcing

More Pitfalls to Avoid

Other factors can weigh significantly in offshore development projects, including the time difference between the customer and the vendor. Though outsourcing to India is common, Pacific Standard Time is twelve and a half hours behind India, for example—as wide a gap as you can get in the U.S.

Both sides of the project must be ready to work around the time difference. Says Covansys's Massey, "When we do direct client interface, our India organization is very accustomed to doing that on a timetable that accommodates the business day of the client in the U.S."

In fact, says, Vashistha, "Done right, the time difference can be a significant asset." By employing design, content authoring, and development teams both domestically and abroad, a broad time difference can mean developers are working on your site twenty-four hours a day.

For Comstock, dealing with the time difference while working on DriveGear.com was a mixed bag. "The time zone [in Russia] was an eleven-hour gap, but it wasn't that big of a deal. For some reason [the time variation] made a bigger difference with the Egyptian guys. It didn't seem like they made their hours flexible to a schedule where I could work with them."

International politics can also impact the success of any project. While most American companies are likely to be rightfully concerned when outsourcing to a country like Indonesia, even traditionally friendly countries can pose problems. India's recent conflicts with Pakistan, for example, drove considerable IT business back home, or to other countries.

"International concerns can definitely slow down or affect the ROI of deals," says Vashistha. However, he adds, "Many times this is related to tax and incorporation status, export rules, and other such areas." Consider the legal issues carefully before inking any deal with an overseas company. For example, if litigation becomes necessary, where will the case be tried?

Making It Work

"From our perspective," says Covansys's Massey, "making it work is not going to India and securing a facility and developing a management team and hiring talent. That's actually probably 10 percent of the job. The magic is in understanding how to put the infrastructure in place, put the process and methodology in place, to make that service reasonably deliverable to clients in North America and Western Europe."

To help bridge the divide between American companies and offshore vendors, Covansys tries to have its domestic and overseas employees work as closely as possible. "One of the advantages we have is that so much of our domestic employee population completely and thoroughly understands our offshore model. In fact, a huge number of our domestic employees actually worked in our offshore organization at one point in time. Our domestic employee population is in the range of 3,400 people. And of that 3,400, more than half are Indian-born."

Whether you work directly with a provider of offshore services like Covansys or you contract with a third-party development company to manage the relationship (as Comstock did for DriveGear.com), choose a partner that has a local presence. Without a local manager who can give you access to the work and contact with developers, an outsourced project can feel like flying blind.

In Adrian Comstock's case, he initially felt comfortable with his project's management structure, but the situation quickly changed. "[The project manager] was either fired or quit about three weeks after my engagement started," he says. "The American firm never introduced me to another project manager. The only person who was a liaison was the salesperson. And that guy, you know, he was a sales guy. He had already closed the contract; he didn't really have much motivation to keep close tabs on the Egyptians. So communication had totally broken down."