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I posted this article called "Offshore blunders. Who is to Blame?" on CIO.com the other day. The story discusses a few case studies that I have personally witnessed over the years.

There are many reasons why offshore development fails:
* Resistance to Change
* Unrealistic Expectations
* Lack of repeatable processes
* Poor vendor management
* Poor vendor performance

Usually when there is a report of an offshore development project failing, the critics immediately jump on the anti-offshore bandwagon and declare that offshore development can't work. When you look at the reasons these projects fail (listed above) how many of these are the vendor's fault?

Resistance to change - This is the number one reason for failed offshore projects. Companies tend to ignore the basics of change management. The staff sees offshore as a threat to their jobs and becomes unwilling to cooperate and allow the vendor to be successful.

Unrealistic expectations
- Some companies struggle to deliver so they think throwing projects across the ocean will solve their problems. If you can't manage projects onshore, how the heck do you think you can manage them offshore?

Lack of repeatable processes - Regardless of whether your vendor is CMM level 5 or ISO certified, your home based staff needs to have some form of process in place or your project will most likely end in a disaster. You still need to deliver the appropriate specifications to the vendor, have valid change control procedures, perform code and design reviews, and perform project management best practices to keep the project on schedule.

Poor vendor management - Shipping projects offshore may reduce the amount of development that you need to take on, but it increases the level of oversight that you must provide. Keep in mind that the vendor does not have the business knowledge that your staff has. If you let them make all of the decisions you are doomed for failure. Let them make recommendations, but approve all decisions.

Poor vendor performance - Ah, finally something I can blame on the vendor, right? Wrong! Who is responsible for selecting the offshore development team? That is the person who is accountable. This is no different if you performed a vendor assessment for a CRM package and you picked a package that did not meet the business needs. Is it the software companies fault? Will the CEO blame the vendor or will he hunt down the CIO?

Let me add that as a taxpaying American citizen, I don't like the fact that our beloved IT jobs are moving offshore. I can moan and groan about it all day long or I can figure out how to make it successful so I can satisfy my users' needs. As a leader in IT and a shareholder of my company, I understand the economics of offshore development.

IT is not the only industry that has been losing jobs overseas. Manufacturing and engineering jobs have been leaving the country for years. It just took a while longer for the IT industry to follow suit. Until our government gives companies incentives to keep jobs at home (don't cross your fingers on seeing this any time soon), jobs will continue to move offshore.

The next time you see an offshore development project fail, before you post your next "I told you outsourcing doesn't work" article, research the reasons why it failed. The odds are that they failed for one or more of the reasons I highlighted above. If that is the case, then who is really to blame?

4 comments

  1. remiv  

    Mike:

    Since you and I are posting regularly on CIO.com, I would like to have the chance to talk to you about both offshore and WEB 2.0, two major topics for me. I visited your Blog but did not find any easy way to contact you.

    I am in San Francisco, and my email is remiv at favic dot com

    My blog is www.remi-vespa.com

    Let's see if we can help each other

    remi

  2. Pankaj Arora  

    Quite true.

    Offshoring could be easily classified as project. Result of any project is in hands of stakeholders.

  3. James McGovern  

    As an American citizen and patriot, maybe you could comment not on reasons things fail but how other patriots could cause more outsourcing undertakings to fail...

  4. Mike Kavis  

    @James,

    I am not sure I understand your comment.

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