In the world of Oracle developments, there has been a great deal of discussion about the outsourcing model; that is, whether you should keep your Oracle project onshore or outsource elements (or the entire development) to an offshore location.
The basic premise and advantages of outsourcing overall have been thoroughly documented, and potential wins range from significant cost savings to a reduction in stock levels. Businesses also have an opportunity to focus on their core competencies. However, the debate over whether to keep Oracle developments and implementations onshore is still ripe for discussion.
Each option has its pros and cons. Many believe that for Oracle and other high-tech projects, an onshore approach is the better strategy to take. Let's take a look at the arguments.
The onshore argument
Practical experience and skills are guaranteed in your 'home' country, and the implementation will have been considered with a local or accessible skills base in mind. Europe is well advanced in Oracle and other ERP developments, and there are plenty of well-qualified practitioners in the field. Translate this to low-cost countries in India, Latin America and China, however, and that skills level is not guaranteed, or accredited to a level that may be recognised by UK project leads and employers.
Also consider local market factors. Local and native professionals will understand the technology favoured by the local market. And they have an instinctive sense about how to commercialise and apply it to specific markets and customers. This native knowledge can be incredibly useful.
Intellectual property is another important factor, more for software developments than implementations, but it's important to note that in the Far East in particular, countries are known for failing to observe copyright legislation regarding IP and its protection. Such breaches are less likely to occur in Europe and the US, where the legislation is strong and well understood.
Location is of course a key consideration, and proximity is one powerful benefit of an onshore model. If you outsource to a location that is several thousands of miles away, there is no chance of a quick catch-up meeting. Oracle projects usually benefit from regular face-to-face interactions and meetings, particularly if the project is being run according to agile methodologies. Although daily face-to-face updates are not necessarily a critical success factor to an Oracle implementation or upgrade, their lack of occurrence over time can lead to a build-up of issues.
Consider time as a relative of distance. Conference calls within the UK and Europe are usually not a problem so far as time zones are concerned. But calling China, India or Latin America is another story.
Language barriers are another obvious area of concern, particularly in a highly technical field such as software development. Even if outsourced staff overseas speak English, they may not do so to an ability that allows fluid and flawless communication, which lies at the heart of a successful project.
There are other factors to consider too. Extreme factors such as economic, financial and political stability of common outsourcing countries must be considered within the risk analysis. Local cultures and norms must also be considered; for example, in the Eastern world, it is normal to do as you are told regardless of whether this leads to success or failure. In the UK, the requirements of customers can be questioned to a certain extent, allowing professionals to guide them towards the best solutions for their needs.
The case for offshore
Of course, despite the potential downsides to establishing projects offshore, there is a powerful positive. The main one being cost. And from a GBP perspective, the lure of outsourcing overseas can be highly attractive. For example, hiring staff in India can result in savings of up to 60% compared to hiring in the UK. In China, the wage bill may be as little as 25% of that in Britain. Of course, the experience and quality of staff must be of an acceptable standard.
Hidden costs must also be considered, including interpretation costs and the need for increased project management costs. There are instances where outsourcing offshore can certainly make sense, such as for product testing, fixing, data testing, data loading and routine work. However, as a general rule, Oracle projects will tend to work best with an onshore team.
A third way?
There is also a third way, known as the onshore offshore method, or 'following the sun', which occurs when projects operate around the clock by using offshore providers during times of local downtime. This can be interesting if the right talent can be recruited and appropriate tasks are handed off to the offshore team. This approach can provide the benefits of cost savings and speed of implementation, although project management will also be needed around the clock, ensuring that project managers are able to hand over responsibility to each other at the start and end of their shifts. It also creates a highly pressurised project plan and delivery pattern that can be too ambitious for some projects, leading to communication issues through rushed work. And frustration when queries cannot be answered by the other party when they are offline.
Author: Andrew Thurstans, Maximus IT