Offshore Product Development (OPD) - Why should I?
ISVs today not only want better features in new products
but also want them faster. Partnership with a offshore product development company
can assist an ISV to stay competitive. By Shubha Sridhar
From a start-up company with a fresh idea to an enterprise
software product company, everyone needs reduction in product realisation time.
They are under constant pressure to upgrade and widen product offerings, augment
internal skills and capabilities, accelerate product development and reduce
product costs. To meet market demands and to gain a good return on investment
(ROI), they would need to spend smarter and strategically leverage the resources
available to them.
Considering that the ISVs (Independent Software Vendors) today not only want
better features in new products but also want them faster, it is imperative
that they look at capitalising on a partnership with a professional offshore
product development (OPD) company to beat competition, gain faster time-to-market
and reduce their initial investment in-terms of time, money and effort. More
important among these is the fact that an offshore product development company
can assist an ISV to stay competitivewhich is the main necessity today.
Benefits of Offshoring Product Development
OPD companies today are completely focused on developing products and have in
the process, developed mature quality processes. They are able to implement
world-class best practices within short timeframes due to constant improvements
through investments on Six Sigma and Capability Maturity Model (CMM)
programs, which form a critical success factor in implementing the full lifecycle
of product architecture, development and deployment.
Although offshore product development started as a tool for
labor arbitrage, today, the benefits gained by ISVs include higher quality,
development discipline and significant value addition in terms of process efficiencies
What can be off-shored
A product development lifecycle typically consists of certain core and non-core
services. These could be broadly classified as below:
- Market survey and capturing User requirements
- Technical requirements specification
- Product design
- Functional Specification, Development
- Cross platform compatibility, multi-lingual features,
- QA and test automation
It is common practice for the ISVs to retain core services, to begin with,
unless they believe that the OPD company have more skills in a specific domain
and have the ability to provide greater value in designing a product or perform
such other core services.
The productivity level of an ISV is higher if non-core services such as development,
test automation, cross platform compatibility, support etc are performed by
an OPD company. Apart from the non-core services mentioned above, there could
be other services such as development of certain components for the product
that form a separate entity in themselves. These can be implemented, maintained
and enhanced by the OPD Company. These components would then be offered to the
end-clients as an add-on to the actual product.
the past, ISVs were hesitant to offshore/outsource even the non-core services
fearing Intellectual Property (IP) infringement and leakage. Today, the OPD
companies have taken strict measures to ensure that IP is not tampered with,
by putting in place processes and rules sensitive to IP. Their security standards
comply with ISO 27001 and the likes. They have even invested in separate seating
areas and networks for employees working on different products. The ISVs insist
that the employees from the OPD company working on their products, sign non-disclosure
and confidentiality agreements, prepared by them.
The same precautions, as would be taken by an ISV are in place for an OPD company
today. An OPD company developing an ISVs product is treated as an extended
arm of the ISV.
A few common hurdles and apprehensions that ISVs face today and the approach
to solving them, are detailed below:
- Once the sale of a product is made, in order to
ensure end-client satisfaction, the ISV assumes that it has to maintain a
large services team to fulfill all specifications, customise the product,
integrate it and maintain it on the end-client environment.
- Maintaining such a team could cost a fortune to
an ISV. With constraints set by tight budgets, the process of establishing
a team proficient with the technology and the product may cause a dent in
their monetary resources. Besides, the need for service resources may not
be constant, there would be peaks and troughs in the amount of services work,
irrespective of which, the ISV would be forced to maintain such a team.
- Early on, most ISVs realise that their focus must
be on the core product. The costs incurred by the ISVs need to be channeled
towards making a better product, establishing them selves as market leaders,
promoting the product, branding etc. The non-core activities should be channeled
to partners whom they can trust and who specialise in such services, ensuring
that there is no additional strain on their budget.
- OPD Companies providing professional services have
come a long way since their inception, in-terms of infrastructure and resources.
They are well established and have meticulous screening processes in choosing
the technologists working for them.
- An OPD team works like an extended arm of the core
ISV team. Research has proved that the cost of manpower is reduced to almost
fifty percent when partner professional services teams come into play, in
place of an existing core team. The OPD companies would, additionally, bear
the costs of HR framework, infrastructure, governance etc. of their resources,
reducing these maintenance overheads for the ISV.
A Common Misconception
An offshore team may not understand or adhere to the required quality standards
of the ISV. Considering that the ISV holds complete control over the product,
a failing on quality would reflect poorly on its reputation. The loss of quality
for relatively cheap labour is not a fair trade-off. The compromise on quality
would be a disaster on the branding front and in turn on the Return-on-investment
- OPD companies are currently concentrating on taking
quality to newer heights. Processes like Six Sigma and Capability Maturity
Model have been established for the purpose of setting metrics. OPD companies
have dedicated Quality Assurance teams to ensure that these standards are
met and exceeded. They collect metrics to constantly upgrade their quality
processes. Resources working on the product are certified by recognised institutions,
which put their technical acumen through rigorous tests before certifying
them as competent in a particular technology.
- To avoid any compromise on quality and timelines,
Service Level Agreements (SLA) are drafted and agreed upon. These SLAs are
then measured and reviewed to see how the offshore companies have performed.
The role of an OPD in ensuring quality does not end with development services.
They test the product to the finest component and check for unfailing efficiency
Typical services offered by Offshore Product Development Companies today:
The OPD companies today offer both core and non-core services. Below are some
of the services being offered:
- New Product development / definition
- Product migration and re-engineering
- Product customisation
- QA and test automation, full product testing
- Product support
- Product integration / professional services
They even offer innovative prototypes and proof-of-concepts
to visualise the end product. They bring in greater
bandwidth to develop multiple versions of the ISVs
product thereby enabling the ISV to gain a faster time-
The OPD companies can:
- At the least, churn out more solutions at a faster
pace owing to the skilled resources that can be deployed in larger numbers
- Help ISVs to cater to a wider audience with varied
needs. OPD companies have offices world-wide and can deploy resources across
the world to service the ISVs client base
- Maintain a larger pool of resources, without any
additional costs to the ISV, owing to the fact that they are dedicated to
product development. The OPD company will invest in HR function, Infrastructure
and governance needs for the pool.
- Innovate, come up with better ways to engineer a
product and contribute proactively to assist in the ISVs business goals.
- Provide all of the above at optimised costs, owing
to the onsite-offshore model of servicing.
Considering that the OPD companies today offer more than
just programming services and lower costs, the ISVs should strategically leverage
a partnership with an OPD to get significant value in-terms of on-demand services
that will help garner a greater market share.
The author is Regional Manager (Technical Services)-Europe
at Torry Harris Business Solutions