Successfully Mounting Software Operations in China
For technology behemoths like IBM, Microsoft and GE establishing software development operations in and for China is relatively easy. They have the money, people and wherewithal to build operations quickly and efficiently. However, for medium and small size companies less able to mount software development operations on their own in China the answer is simple: outsourcing.
While any step in the software development process can be outsourced, some steps more readily lend themselves to successful outsourcing in China. A primary consideration is identifying a component of the process that is easy for a company to separate into a distinct module or task.
Early in a company’s outsourcing effort, it may be best to focus on the “low hanging fruit”. A common starting place is the process of globalizing a company’s product for Asian markets. Having the translation, localization and subsequent testing completed in China will ensure that a company’s product is ready for Chinese users. Moreover, a company can also find outsourcing partners with strong backgrounds in localizing software for Japan or Korea.
The secondary benefit to doing globalization work in China is that a company may be able to find an outsourcing partner who can assist with sales, product implementation and customer support after the initial globalization work is completed.
If product globalization for Asia is not an immediate goal, an organization might consider outsourcing segments of the development process that are not core functions for the company. These could include: testing, internationalization, or localization verification testing (for non-Asian languages). These portions of the process tend to lend themselves to partitioning as distinct tasks that can be outsourced with minimal impact on a company’s core team.
One point, though, to remember: if the U.S. government or military uses your product, outsourcing to China may not be an available option. Also, although Intellectual Property (IP) laws are increasingly being enforced in China, and the country has recently implemented a large body of legislation protecting IP, including “The Trademark Law of the People’s Republic of China,” Paris Convention treaty, “Copyright Protection Law” and the “Anti-Unfair Competition Law”, piracy and security considerations still need to be evaluated. Companies should take appropriate measures to ensure that a Chinese outsourcing provider offers full U.S. legal and IP protection before making core source code available to an offshore team.
HOW DOES A COMPANY GO ABOUT FINDING AN OUTSOURCING PROVIDER?
The number of firms providing software development services in China is growing rapidly. There are both indigenous Chinese companies offering outsourced services, and organizations that provide outsourced development using Chinese resources, with headquarters elsewhere. In the latter category you will typically find Western companies (based in the U.S. and Europe) and Indian companies that are establishing operations in China. The non-Chinese companies often offer more depth of experience in serving U.S.-based companies and a more Western corporate culture.
Size and scalability are other important considerations when looking for a provider. While Fortune 100 companies can be sure that even the largest outsourcing organizations will give their projects top priority, less prominent companies may get more attention and support if they work with relatively smaller outsourcing companies. However, companies looking to outsource need to be certain to verify that the outsourcing vendor has the capacity to scale as requirements grow.
If plans to expand market reach into Asia are driving a company’s decision to outsource to China, they must look for a provider with a broad range of services. The vendor should be able to provide implementation, system integration, training and local customer support. This will postpone the need to open offices in China until the volume of business justifies the direct commitment.
Beyond providing quality internationalization and localization services specific to the locale, a broad spectrum service provider should be able to leverage expertise gained from the engineering/testing aspects of globalization to provide better support, sooner, for a company’s in-country customers. Moreover, companies may also consider seeking a partner in China that has the capability to manage local help desk and technical support services by providing phone, email and live touch support for Level-1 and Level-2 inquiries.
Once a company has narrowed the focus to providers that can meet all of its needs, it will need to drill down into details, such as employee attrition rates, education levels, and depth of their staff’s engineering experience. Companies will also want to evaluate the maturity of their project management processes, the ease of use of their collaborative tools and the expertise and location of their project managers. Finally, companies will need to be sure to verify that the outsourcing provider’s project management staff can communicate efficiently with the client’s internal team. This will ensure that they can manage most of the outsourcing complexity and truly free company resources to concentrate on core processes.
When making the final selection, references need to be checked. And, if possible, a visit should be made to the provider’s delivery facility so that company executives and staff can talk directly with the provider’s technical staff.
SETTING UP AN INITIAL ENGAGEMENT
Importantly, once a provider has been selected, a company should insist on executing a pilot project. This effort will be relatively small-scale, involving minimal ramp-up time, with the objective being to see how the provider and their delivery model work. The process of executing the pilot project also gives the combined company/provider team an opportunity to resolve any problems in the working relationship before engaging in a large-scale project.
Prior to the start of the main project, a clear timeline should be established for building out the full project team and deciding on the degree of involvement a company wants to have in selecting team members. Also at this time, the company should work with its provider to complete any specialized training that will be required for the team’s engineers. Using a “train the trainers” model can be helpful if the company’s product is very complex. In this model, a small number of the outsourcing provider’s senior technical staff travels to the client site to be fully trained. They then return to China to train the team there. This can speed up the overall training process, while providing a chance for the trainers to get a feel for a company’s corporate culture.
In going forward with the company/provider partnership, a company will also need to establish communications protocols, including:
Very importantly, a company should test the network between its site and the outsourcer’s facility for peak load bandwidth and reliability. A security audit of the network should be conducted at this time, and any additional security procedures and process that will be required should be established.
HOW WILL YOU MEASURE SUCCESS?
Many outsourcing engagements are based primarily on improving efficiency. However, with this objective in mind, a low overhead is not the only indicator of success. Improving the quality of the company’s product while expanding potential markets are also activities that contribute directly to an improved bottom line.
Once a project up and running, it is important to measure performance by carefully monitoring pre-defined indicators. The company should examine its operational goals for the project, and then use the results to guide selection of the appropriate indicators. Good indicators will focus on output and not just activity. Outsource teams must be held accountable for what they produce, not simply for their level of effort. Factors measured should focus on tangible, quantifiable output. Objective measures will ensure that all team members around the 1world intuitively understand the factors that are being measured.
MOVING BEYOND THE INITIAL RELATIONSHIP
Once a company establishes a solid relationship with an outsourcing provider in China, it may elect to build dedicated teams in the region. Maximizing knowledge transfer within a dedicated team can ensure a ready pool of experts on a company’s products. If a company is planning to enter the China market, these in-region teams can create a total support system for partners, vendors, distributors and customers.
Smart companies can leverage an outsourcing partner’s trained resources to set up a product training team in China. Members of this team will be available to train both new technical resources and a company’s customers in Asia. Senior members of the training team can even be dispatched on-site to provide field support and training at customers’ Asian facilities. This field support team can assist with implementation, trouble-shooting and installation of product upgrades.
Clearly, in today’s business environment, being able – as a medium and small size company – to outsource software development in, and for China can level the playing field when those companies go up against bigger competitors. And making sure the outsourcing is done most effectively and efficiently will definitely allow those medium and small size companies to pursue the same efficiencies as bigger companies in order to remain competitive.
ABOUT THE AUTHOR
Jacob Hsu is the president of Symbio, a company that leverages China outsourcing teams to help companies become global leaders. Symbio helps organizations accelerate their software development and testing cycles by optimal application of its global resources and delivery models and it also localizes and supports technology products for any language or locale. Symbio now functions as a cost-effective and highly efficient extension of an organization’s development, testing and globalization teams. Symbio’s clients are among the world’s elite companies including: AOL, BMC, CA, Citigroup, EMC, FileNet, IBM, MasterCard, Mercedes- Benz, Microsoft, Nokia, Oracle, Palm, Sony, as well as more than 300 other leading organizations.
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