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An Outsourcing Project Gone Sour
Monday, November 17, 2008

The big business of outsourcing to India is heading for hard times unless Indian companies pay attention to several key issues: product quality, tight project management systems, and on-time delivery.
It is certainly true that Indian companies need to move up the value chain in these trying times. India remains the country with the most SEI CMM Level 5 companies. But these firms need to adhere strictly to key processes and quality standards that will keep them the blue-eyed darling of the tech industry. As the following case study shows, bad things happen when they don’t. This is a “real world” example, and a lesson to study.

LACK OF COORDINATION A well-known software development organization accepted a project outsourced to it by a leading financial company. The proverbial saying that “well begun is half done” unfortunately was paid only lip service in the handling of this endeavor — with harsh results.

From the start, the bagged order was a case of over-commitment. Normally, during contract negotiations, the marketing people consult with the project head to get an accurate estimate of how long it will take to complete the project. In this case, the marketing professional failed to take this step, a case of miscommunication between both parties.

Shouldn’t the project manager have been able to estimate the delivery time accurately? Says a source: “Most of the times here, the project manager is not versed in the technical nitty gritties. If that’s the issue, then he may not be able to estimate the exact time which results in considerable delays.” This happens in the “conceptualization” stage of the project. ANALYSIS STAGE The “analysis” phase of a project is when the contractor gains an understanding of the requirements of the customer. In India, the customer typically does not explain his exact requirements from the stage of conceptualization (blame it on the set of practices followed). In this case, the problem was further compounded because the detailed design documentation processes were not up to the mark. “The process of detailed design documentation is looked down upon by most of the technical people here,” the source says. “And that is the case with most organizations in India.” This can be tackled to some extent by letting the “functional” people in the project take care of the documentation.

But, he continues, “in relatively smaller organizations like ours, that is not done. So there is no demarcation between ‘technical’ and ‘functional’ people. This results in documentation that the user may not be able to understand, which results in refining the work further, thereby eating up more time. And this is exactly the thing that happened with this project, too.”

IMPLEMENTATION STAGE After all these processes were completed, the customer was not satisfied with the output. The key problems included incoherent documentation and increased complexity with every modification. Relations between customer and contractor quickly soured.

The lesson: process control is critical. In this case, neither organization had an efficient system in place. The result? The project dragged on for more than a year past the original deadlines set during the first stage of the project.

Situations like these can be avoided if better practices are followed and attention is paid to each detail. This naturally would lead to enhanced customer satisfaction — and repeat orders!

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