The problem with outsourcing

The advantages of outsourcing are well established. The benefits are compelling:

• access to highly skilled, stable workforce and introduction of additional creativity/experience to the R&D process
• radically lower costs
• flexibility to use and pay for resource only when needed.

However, for the many UK software companies this has been a difficult resource to use. Without local knowledge, experience in outsourcing and the funds to evaluate and establish a secure working relationship, the majority of small to medium sized, UK software companies have not been able to take advantage of this. Typically outsourcing services have been geared towards the larger company, with major projects or investment available. This does not help the small to medium sized organisation and has typically locked them out of this market.

Zoral has been established specifically to solve this problem. Zoral has:

• on shore, UK and USA based management
• offshore Eastern European based development teams
• a well established and successful methodology for multi-location development
• a successful track record in supplying sophisticated development services
• a specific and unique focus on helping UK software companies to deploy an outsourcing solution.

With capital resources coming under ever more pressure, more and more companies are turning to offshore resourcing. In order to remain agile and competitive, this is becoming a tool that no UK software business can afford to overlook.

As an introduction, we have listed below a number of Frequently Asked Questions and answers based on Zoral’s own trading experience.

Why use outsourcing at all?

Outsourcing is a strategic management tool that provides the opportunity to drastically reduce costs and release capital and time needed to improve core operations. Therefore, the driving force behind the decision to outsource is the ability to concentrate on core competencies. For an increasing number of companies, there is no alternative to outsourcing to achieve this goal.

Below are a number of key reasons why businesses most often choose to outsource some of their processes.

Cost-Driven Reasons

• Reduce costs through Zoral’s performance and lower cost structure
• Turn fixed costs into variable costs
• Reduce fixed overhead
• Fix costs for quantifiable deliverables

Organizationally Driven Reasons

• Enhance effectiveness by focusing on the core competence of your organization
• Increase flexibility to meet changing business conditions, demand for products and services, and technologies
• Increase product and service value, customer satisfaction, and shareholder value

Improvement-Driven Reasons

• Improve operating performance
• Improve quality
• Obtain expertise, skills, and technologies that would not otherwise be available
• Improve management and control
• Improve risk management
• Acquire innovative ideas

Financially Driven Reasons

• Reduce and control operating costs
• Unlock available capital funds
• Reduce investments in assets and free up these resources for other purposes

Revenue-Driven Reasons

• Reduce time to market and improve competitive edge, generate more product more quickly
• Accelerate expansion by tapping into Zoral’s developed capacity, processes, and systems

 

How much could I save?

This depends on the level and duration of resources purchased, but typically you can save between 40%+ versus using on-shore resource.

 

Why should I use Zoral?

Zoral’s management, business practice and staffing have been specifically established to meet the needs of the UK software industry. We understand the market needs and provide a responsive service to our customers. We have a proven track record in this field and, as such, are unique.

 

What size of project can I start with?

Customers can start with a small test project to establish and measure the relationship and grow from there. Unlike many other outsourcing operations we have no lower limit for project size. At the upper end we are able to resource 20-30 man/year teams as and when required.

 

What type of outsourcing projects has Zoral completed?

One of the ways Zoral differentiates itself from general outsourcing is by maintaining close links to Eastern European research and scientific community. For example, Zoral currently has a number of scientists both in the United Kingdom and Ukraine working on advanced analytical libraries, complex meta data driven systems, data warehousing and functional programming.

Zoral operates principally from London and New York. We are involved in different types of projects at these locations. In both locations we implement full Systems Development Life Cycle with comprehensive, best practice QA and product release methodologies.

Projects completed include,

• Development of complex, low-latency, large-scale Data Warehousing systems utilizing Ab Initio (ETL engine) and C++
• Design and development of meta data repository and executable meta data driven rules engine
• Development of high speed, large volume data analysis and OLAP
• Developing metadata/rules driven, multi-tier, Java based GUI and visualization engines and components
• Development of custom parsers, interpreters
• Development of automated code conversion engines to convert from a source language to a target language with minimal manual intervention
• ODBC/JDBC drivers and interfaces in C++ for vector RDBMS
• Simba/MDX drivers and interfaces for OLAP in C++ and Java
• Development of a comprehensive security environment and host intrusion prevention system, including custom security drivers, applications, methods and procedures and implementation for a Windows 2000 operating system based topology. Implementation operating system kernel level security, databases and applications security Software utilized: C++, Assembly, Java, various RDBMS engines
• Development and implementation of real-time trading systems for a major investment bank utilizing C++/Unix
• Designed and developed a secured system for Internet payments and transfers (BSD Secure shell), for the middle office of an Investment Bank
• Development of Credit Card fraud detection analytics
• C# .Net development environment and related application development.

Zoral offers reliable, high quality and cost-effective custom software development services in the numerous areas including,

• Data Warehousing and analytics
• Advanced data analysis and BI applications
• Advanced Java GUI and N-tier development
• Thin client and Web development
• Device drivers
• Adapters and middleware
• Component development.

Our development team has professional expertise with a wide variety of technologies. Its list you can find on our Skills page.

 

Are the Zoral team fluent in written and spoken English?

Yes. Good English language skills are a pre-requisite for both off-shore and on-shore staff All Zoral employees, without exception, communicate fluently in English.

 

What development methodologies does Zoral use?

Project Management

Every software project in Zoral is considered as a separate, complex engineering task. Project management is carried out in accordance with the principles promoted by the Project Management Institute. Zoral software development methodology is primarily based on the Rational Unified Process and brings some ideas from the Microsoft Solution Framework model. The methodology fully complies with the requirements of ISO 9001 standards. The Software engineering process is broken down into the following four key phases:

Analysis

During this phase a dedicated team of our experienced analysts and partners helps the client to define detailed project requirements. It is enough for the client to provide the general list of business objectives, which will be clarified and formalized in order to become a solid foundation for the future software solution. We pay a great deal of attention to this first phase of the project as it shapes the quality of the software solution and its potential benefit for the client's business. Zoral analysts work with frequent contact with the client's team or partner’s team to assure smooth transfer of the future system. The result of the Analysis phase clarifies the time and cost estimate of the development and maintenance effort. The contract is only signed after the parties come to agreement on all aspects of the project.

Design and Development

Certified engineers in our software laboratories in St. Petersburg and London carry out detailed design of the technical specifications. Knowledge transfer to the client's team is organized in a convenient and cost-effective manner by means of our tight integration to our UK based staff, and via email, instant messaging and teleconferencing. The project can then follow incremental software development or rapid prototyping models. Progress reports and deliverables are normally provided on a weekly basis; internal and partner reporting for control purposes is daily. Source code is recorded and stored securely in the Microsoft Visual SourceSafe database, which is backed up nightly.

Testing

Once the modules of software have been developed, the project team first tests them in order to ensure that implementation precisely reflects the specification. After the project development is completed, installation packages along with all documentation are passed to the dedicated testing group. An important feature of the process is that testers are independent; they do not report to the project manager and so create an entirely independent view. Interaction between the testing group and the project team is formalized. All bugs are logged in our or the clients fault logging database along with the names of developers and testers involved, so that the process is completely transparent and traceable. During this phase partners and clients can actively participate and contribute to the overall test plans and conduct desired verifications.

Over the years, Zoral QA Team has developed a focused quality control and testing checklist, which ensures that every solution delivered by Zoral, measures up to the highest international standards.

Implementation and Ongoing Support

All software developed by Zoral is fully documented: the client receives user manuals, administrator's guides, and the source code with comments. Software is shipped in the form of an installation package, which can be set up on client's site by people with minimal IT skills. When the software is tightly integrated with client's systems, an on-site visit of Zoral support engineers or certified partners can be provided. On-site training is also available. Ongoing support may be provided on a 24x7 basis via Zoral technical support centre.

Collaboration

Zoral can deliver software development solutions in a number of ways. The customer can engage our outsourcing team on-site, off-site or bring-in one of our Eastern European or European staff, or any combination of these. Workload can be distributed differently throughout the project lifecycle.

Analysis and design phases of the project may be performed on-site and off-site. Off-site approach is ideal for the projects where the scope is defined by the customer in detail. When requirements are unclear at the beginning of the project, analysis phase may be performed on-site through the combination of customer’s resources, help from Zoral staff and analysts on-site.

Once the project is defined, development and testing activities are performed at the Zoral development centre. Progress reports and deliverables are made available to the customer and partners at pre-agreed intervals. Partner or client project managers remain always in synch with the Zoral project manager. This is by regular contact via, personal visits, phone, video link and through the Project Monitor section of our web-site. Zoral provides Web-based project management collaboration using Microsoft Project Central. Through Project Central you are assured that your project manager will be able to work closely on project management related activities with the Zoral project manager, including receiving automatic e-mail notifications when changes and updates are made to the project plan. The customer or partner may also choose to receive remote access to the development server via a VPN or other secure means. By accessing the development server remotely, the customer can monitor progress in real time, and maintain overall control even though work is being carried out offsite. Zoral has the ability and flexibility to adjust the development model to become a seamless extension of our customers' IT organizations.

Zoral deliverables are shipped as scheduled in the form of an installation package or source code with build scripts. When the software is tightly integrated with client's systems, an on-site visit of Zoral engineers or Zoral partners may be necessary. Integrated source code control techniques with clients or partners source code management practices is typically implemented as part of the development and release process.

 

What are some of the risks of outsourcing and how does Zoral mitigate these?

Major risks in outsourced management stem from lack of

• communication, or frequency of communication
• scope management & escalation procedures
• defined, mutually agreed statement of work
• detailed project plan and milestones
• cooperation between client and outsourced management and teams
• consistent, well defined methodologies
• mutually accepted bug tracking tools
• mutually utilized source control system and source release management procedures
• rigor in QA at every major milestone of the project.

Zoral mitigates these risks as follows:

• Communication - Weekly status reports are sent to the appropriate client management and include work in progress, accomplishments for the week, resource allocation, potential issues and opportunities. Every month a detailed SWOT (strengths, weaknesses, opportunities and threats) analysis is issued to the management team. Daily communication via e-mail or IP Telephony is efficient and cost effective. To increase hours of overlap with the client team, Zoral employees work shifted hours. Often, Zoral clients invite Zoral management to participate in client meetings thus integrating both teams further. Integration of Bug tracking systems are also a good way not only to manage quality and issue resolution but to integrate both teams around deliverables in a timely, pro-active manner and improve communication and cooperation.
• Scope – Scope creep is always dangerous for both sides and is carefully managed by the Zoral VP of Development. By breaking the project into small deliverable milestones, scope expansion is easier to manage and project timelines can be adjusted by increasing resources, timeline and expectations. All scope changes are carefully documented, mutually, formally agreed and reflected in project plan changes, which are themselves kept in source control environment.
• Statement of Work – Carefully prepared, mutually agreed upon statement of work is part of all our outsourcing agreements. This helps control scope creep and focuses both sides early on the benefits of the outsourcing project.
• Project Plan - Based on the statement of work, a detailed project plan is produced as part of the deliverables for the requirements gathering phase of the project. The project plan (MS-Project is usually used) outlines detailed tasks, milestones, resource allocation, dependencies and duration. The project plan is mutually agreed upon and all project reporting and tracking is done based on the project plan. This gives both sides a common reference point from which to evaluate progress and manage risks.
• Cooperation – Zoral encourages client team members to visit Zoral and work with our team on sight. This, along with the social activities that go along with such visits, greatly facilitates mutual cooperation and reduces “us .vs. them” mentality. Integrating key Zoral team members into weekly client meetings also better aligns both teams and processes.

 

How much can I place offshore?

This will vary from project to project, but typically we see up to an 80/20 mix, i.e. 80% offshore, 20% onshore.

 

What sort of projects work best offshore?

This is a key question, with no simple, formula answer. However, this is an area in which Zoral has gained much experience, so can help you assess your overall workload and provide competent advice.

 

What do I do next?

We would be to discuss your requirements, or simply to meet and provide more information our services and experience. Email or call us at the addresses on our contact page [link to contact page], or simply enter a brief outline of your requirements [link to requirements page] for a 24 hour response from Zoral.