CHENNAI , INDIA

Jun 2001.

BILVAC Technomanagement Private Limited, based at Chennai , India , is a software development organization, where the management team has extensive experience in tie-ups with European and American organizations. This white paper explains the process of bootstrapping off-shore development services .

One of the business offerings from BILVAC Micro is off-shore software development services. The scope would include development, maintenance and support activities, from the off-shore centre at Chennai, leveraged by a few key on-site personnel at the customer organizations who are deputed from BILVAC. It is found that though many European and American businesses are aware of the following advantages of using software development services from an off-shore-based service centre, there is a need for having a clear bootstrap program to rapidly get into a mode where the following advantages would be realized :

· Scalability for the business

· Faster turnaround time

· Technology upgrades in time

· Cost Reduction

The salient steps towards this are:

STAGE A - Pilot

· Organization selects a pilot project

· Typical size in terms of effort could be 15 to 100 man-months of development.

· Typical cost could be around US$ 30,000 to 300,000 – these are indicative figures, and could also vary depending on the technology, skillsets, etc.

· The typical cost saving in this would be at least 30% of the cost of doing it with in-house resources of the organization.

· Typical duration would be between 3 and 6 months.

· Organization assigns one person committed to success of the project, - who will interface with the off-shore team leader. Need not be full-time, but a high level of commitment is needed, and initially a very positive approach to understanding and closing any culture gaps would be very much necessary.

STAGE B – Full implementation

· Decide on scale

· Typical volumes - 10 to 50 development professionals off-shore, from BILVAC.

· Decide on on-site team size based on business requirements, and interactions with off-shore team – 1 to 20 professionals, depending on the nature of project.

· Orientation for on-site team, to help them seamlessly work with the base organization – could be typically two days.

· Customize the process based on BILVAC methodology, as per specific requirements.

· Sign –off on service levels.

STAGE C – Scale up 

· May be done depending on the scaling up of operations of the European/American business

· Typically require BILVAC to commit 50 to 150 off-shore software engineers, and infrastructure to match them, and 2 to 75 on-site consultants

· Require the customer to commit/project an equal volume of business

· Could enable savings of average US$ 2 m per year.

· May require investments on both sides, like a shared/dedicated satellite link for data communications.

Recommendations

· Pilot project to be of average complexity - not to be the most complex nor be the least complex in terms of technical complexity, design issues, interaction requirements etc

· Close monitoring from both sides required definitely during Pilot.

· For a fast-growing organization, Stage –2 can be skipped and the bootstrap should move right on to scale-up.

· The long-term benefits should be borne in mind during the pilot.

· Experience has shown that the process of constant on-site interactions from senior development professionals serving as a bridge between the customer's business needs and the off-shore service team at BILVAC is much more effective than posting a customer representative at BILVAC, in the India center, during scale-up.

· All billing to be based on continuous monthly basis, for services of last month.

· Time sheets used optionally as a supporting document for off-shore and on-site work

· Project leaders, offshore or on-site may do 20% hands-on technical work and 80% managerial and process related work. They would be on a billable basis, since they provide crucial value addition to the success of the project. It is found that the project/process/team leader's contributions are absolutely essential to enhance the productivity of the ‘predominantly coding' resources.

· For help with identification of the pilot, BILVAC can help with a two-day consultancy, meeting a cross-section of your senior management, and help you identify suitable pilot areas.