How to Compete for Projects (and Win)
Against the Offshore Outsourcing Competition

by Bev Arnoldy

How can one ignore the cover page of the February 4th 2003 Business Week issue titled "Is Your Job Next?" The cover story begins with the following attention grabbing headlines:

The New Global Job Shift

The next round of globalization is sending upscale jobs offshore. They include basic research, chip design, engineering—even financial analysis. Can America lose these jobs and still prosper? Who wins? Who loses?1

As a stakeholder in a company that provides technical outsourcing services, the prospect of losing contracts to offshore outsourcing firms can be a very real and frightening situation. But you can compete and win outsourcing contracts if you:

• Provide Unique Technical Skills
• Ensure On-time and On-budget Deliverables
• Provide Competent Project Management
• Communicate Clearly and Often
• Create and Maintain Long Term Partnering Relationships

Provide Unique Technical Skills

A technical outsourcing services company has a higher rate of winning outsourced projects if the outsourcing company has unique technical skills that are limited or unavailable in offshore outsourcing firms.

One of the major reasons why AVISTA Incorporated2, an engineering services company, has been so successful is because they have a competent engineering staff with RTCA/DO-178B (for U.S. commercial avionics) and FDA 510(k) (for commercial electronic medical devices) software certification experience. Companies like Boeing, Lockheed Martin, Honeywell, Medtronic, and GE Medical Systems must pass certification if they want to market safety-critical or life-critical products that contain a software component. Because of the complexity and thoroughness of the certification process, few offshore outsourcing companies have the technical expertise or the project management staff to manage the certification process.

Ensure On-time and On-budget Expected Deliverables

At the beginning of an outsourced project, how does the client company ensure that at the end of the project the outsourcing company will provide the expected deliverables, deliver the results on time and within a pre-defined budget?

To guarantee that all these expectations are met, the project team members from the client company and the outsourcing company must work together to create a Statement of Work (SOW) before any work has begun. The SOW should include the following:

• Technical problem(s) to be solved.
• Description of users and their environment, and what the users want to accomplish with the product.
• Technical capabilities and main features of the product.
• Schedule and budget parameters.
• The change process to be used.
• How the product requirements will be documented and verified.

The SOW provides a technical and project management roadmap, which the client company and outsourcing company can use to progress through the project definition and execution phases.

Provide Competent Project Management

Technical competency alone will not ensure success in team development of outsourced projects. Projects must be closely managed, flexibly resourced, and project participants must be responsive to change. The role of a project manager is especially visible and necessary to ensure coordination and timely forward progress of the step-by-step project process. The project manager provides a project management roadmap for successful project completion. His or her job is to leverage planning, scheduling, and resource management to efficiently channel project efforts. By working closely with the project manager and representatives from the client company, a comprehensive project plan emerges that optimizes the cost, schedule, and performance objectives of the project.

Communicate Clearly and Often

Your project management staff should regularly meet with the client company's project/program management staff. At a technical level, the technical staff should interact as frequently as necessary. Despite the innovations of video conferencing and Internet meetings, the value of direct contact via face-to-face meetings provides a tremendous advantage in building and maintaining a partnership between the technical staff from both companies.

A "best practice" for any project is to ensure you have all the information you need to manage the project. Particular areas for focus include: tight controls over project deliverables and their quality measurements, formal details in budget and scheduling, well-documented client/vendor roles and responsibilities, and a change control process that quantifies impact on time and cost. If you have set up well-defined performance measurements that have been agreed upon between you and the client company, address them consistently. You should be able to build these performance measures from information from the weekly status reports and periodic review meetings.

Create and Maintain Long Term Partnering Relationships

Partnerships with client companies are exactly that: a partnership. Working relationships based on trust and mutual respect achieves the best results, and open and honest dialogue with all team members is necessary to ensure a culture of teamwork.

By putting your outsourcing staff and the client's staff on equal footing, the combined team shares in the project management and shares in the project risks and responsibilities. This approach ensures that decisions and actions will be mutually beneficial, and helps to eliminate many practices that pit the outsourced technical staff against the client company team.

If the client company considers the outcome of the outsourced project a success, a long term partnership has been established - and continues to the next joint outsourced project.

In Summary

Today, many companies are contracting outsourcing services firms that have the specific technical skills that they are unable or unwilling to "grow" in-house. For an outsourcing services firm, a combination of technical expertise and superior program management skills is essential. Communication from the project management level to the technical level on both sides must occur in order to quickly adapt to unforeseen changes in scope, schedule and/or budget. Moreover, in the long term, the key to successful outsourcing begins with partnership and trust between the client company and your outsourcing services firm.

About the Author

Beverly Arnoldy has over 25 years of experience in the technology sector. For her first 10 years, she was a software engineer. She then changed careers to focus on technical writing. Most recently, she has combined her technical writing skills with usability. After spending 15 years in the Portland area, Beverly has recently relocated to SW Washington on the Long Beach Peninsula. She can be reached at bev.arnoldy@usabilitynorthwest.com.

1 The complete article is found at: www.businessweek.com/magazine/content/03_05/b3818001.htm. By Pete Engardio, Aaron Bernstein, and Manjeet Kripalani, with Frederik Balfour in Manila, Brian Grow in Atlanta, and Jay Greene in Seattle.

2 See www.avistainc.com for information on AVISTA, Incorporated.