Productive Use of Offshore Development Resources

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I have experience at two companies that relied heavily, in some cases exclusively, on offshore development resources. In both cases, the companies neglected to consider and adequately accomodate the challenges presented by an offshore partner, including language differences, lack of domain knowledge in the offshore centers, time and geography differences, high attrition levels overseas, lack of experience, poor infrastructure, and other issues.

Here is the background of both situations:

In April 2008, Jack Xu, VP of Engineering and Research, and eBay Fellow, announced his retirement from eBay. Jack started at eBay in 2002. In 2004, Jack was responsible for opening eBay's first overseas development center in Shanghai. Jack played an instrumental part in growing the China Development Center to over 400 R&D staff. Three years later, Jack partnered closely with PayPal to establish the Marketplaces India Development Center, staffed with over 100 R&D professionals in Chennai by the time he retired. Jack also served as the Vice President of Hua Yuan Science and Technology Association (HYSTA). Resources at both eBay's CDC and IDC have development and test roles on customer support software projects. Those resources lack domain knowledge of the customer support environement in which the products they develop are used. Geographic and language differences make communication extremely challenging. Lack of adequate infrastructure force the offshore resources to do all their work and communication from the office during normal local work hours and limit what they can do from their homes.

Accela, Inc., is majority owned by Sandy Chau. Sandy also is majority owner of Achievo, Inc., a software development service provider with offices in Shenzhen and Beijing. Accela contracts with Achievo for over 100 software developers and quality assurance test engineers. Those resources lack domain knowledge of the municipal planning and building department environements in which the products they develop are used. Geographic and language differences make communication extremely challenging. Lack of adequate infrastructure force the offshore resources to do all their work and communication from the office during normal local work hours and limit what they can do from their homes.

In each case, it appears that the use of offshore resources is driven by political motives rather than by an interest in producing value for the customer. This is not to say that offshore resources cannot be employed effectively as software development partners, but the issues that go with the decision to use offshore resources must be understood and resolved for the arrangement to provide value to the business and its customers.

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