Managing the Five Main Risks of Offshore Software Development Projects

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You’ve heard that using an offshore software development team can save you a lot of money on development.

That may be so when things go really well but that’s an exception unless you manage the risks properly. What are the main risks, and how can you mitigate them?

Requirements Management and Change Control

With software projects in rapidly changing or emerging business environments, business requirements can change significantly during the life of a major project. This can be challenging to manage even with an onsite team, but with a remote team and a working day significantly out of phase it is doubly so. A much more rigorous documentation process is required than would be the case with an onshore team, and a collaboration toolset is highly advisable.

Culture & Language Gaps

Most software offshoring activity takes place in the Indian sub-continent, Russia and China. A typical cultural gap exists between the Western style of surfacing issues openly, whereas it is frequently the case that in other cultures such as in India, directly informing a client about a project problem runs counter to their innate communication style – and that’s without considering any language and idiom issues. Those who have worked with Russian teams know that an answer is really ‘NO’ when you’ve asked three times and the answer is still ‘No’ – despite the Russian reputation for directness.

Sub-Optimal Communication

Beyond culture and language, the basic complications of remote communication for, say a 3 hour design meeting or daily Scrum stand-ups are significant. Poor project team communication is a clear risk, borne out by the evidence of many failed projects. To mitigate this requires high investment in communications technology, which may not be economical for a one-off project.

Communication risk also involves misinterpretation of terminology, so establishing a project Glossary is advisable.

Project Management and Team Structure

It may seem obvious, but project management (including testing) processes have to be much more rigorous, otherwise you will get what you pay for – mistakes and all – as contractual requirement may be followed pedantically with no ‘feedback and check’ loop.

Agile projects rely on close cooperation and ‘same-room’ team interaction. Offshoring can make this impossible and enforce a traditional ‘waterfall’ approach with a typical loss of responsiveness.
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It is often the case that a development team will include a highly capable team leader, but the rest of the team will be trainees and recent graduates with little real business experience to apply to specific project context.

Inevitably, these sorts of problems lead to project over-runs. Many companies overcome these issues by installing one of their own onshore team as project manager co-located with the offshore development team. This is expensive and can take a long time to implement; therefore it is only appropriate for a series of projects.

The Biggest Risk

For a UK company wishing to mitigate these risks there is a simple solution – engage with a UK software development specialist and offload your offshoring risks.

Therein lies the biggest risk – choosing the right company.

A suitable company will be able to provide onshore UK business analysts, technical designers and a project manager, yet deliver the development savings you require by using its established links with tried and tested offshore development teams.

You get the best of both worlds. The contract risk is minimal, you have a local project interface and any development headaches belong to the UK software company you engage. Then you can focus on running your business and a company such as Sequential Software Solutions will focus on delivering your custom software project.