Globalisation and PlusNet - Software Development in India

[#1]

I've just posted a new blog entry on PlusNet's ventures in India.
Have a read of it and give us your feedback and/or experiences you've had personally.
Community Blog; Globalisation and PlusNet software development in India
Matt Grest
Head of Future Development
PlusNet
[Moderator's note by Jonathan (chillypenguin):  You just can't get the staff these days,    I have sorted our Extra long URL out for you Matt  ]

[#2]

Must be cheaper 

[#3]

Quote from: Zathras

Must be cheaper

It's "Cost effective", but the key driver to doing this was not "because it's cheap".
Read the blog; it explains the motivations behind it.
Matt

[#4]

Since I come from a colonial family (my mother's family were out in India and Burma for over 100 years till the end of the war), I have no problems at all in sending work out to India.
Despite difficulties in sorting out a probably belated independence, and despite peoples misunderstanding of the British in India (no, we were NOT racist slave traders), when you go out to India, the welcome is warm and the business is great.
The relationship between Britain and India was always about trade first and foremost - it is wonderful to see that continue.

[#5]

I have no objection to outsourcing work such as this and am reassured that you are not going to go down the same route with CS because it is the main reason why I stay with Force9.
If this were not the case I might as well go elsewhere for a cheaper deal.
However, why is it so hard to recruit people in this country to work in South Yorkshire?  If Plusnet were based somewhere else in the UK would you be able to recruit suitable staff?
Apart from our accent (referred to elsewhere) is there a problem 'up north'?

[#6]

Quote from: poppy

However, why is it so hard to recruit people in this country to work in South Yorkshire?  If PlusNet were based somewhere else in the UK would you be able to recruit suitable staff? Apart from our accent (referred to elsewhere) is there a problem 'up north'?

That's the million dollar question; if only we had the answer.
Speaking on behalf of the Software Development side of the business, our recruitment process is very strict and we follow a stringent interview and assessment process before employing people.
I'm not prepared for us to compromise on this either. We get plenty of CVs in, but it is so important that we only recruit those people who can really add to our existing team. We've been down that other avenue and it'll not pay off in the long term.
We have some fantastic talent in our software development department (and in all areas of the business for that matter); we have got their by not compromising on quality.
For whatever reason, Sheffield doesn't appear to be the kind of city to convince people to relocate from other areas of the country. It's not got the lure of London, Manchester or Leeds for the type of person we're looking for; generally for the skillsets we're after you find this to be the 20 to 30 year old male; I'm generalising here, but it gives you the general idea.
You also find an annual attrition rate of around 18%; this is standard for the industry and occurs for many reasons; this also proves to be a continual pressure on all business like ours.
So, I hope that clarifies my motivations for looking further afield. Yes, our hand has been forced somewhat, but I've got full confidence that my strategy is sound and, above all, the PlusNet customer will see the direct benefits of this decision.
Matt

[#7]

Interesting blog entry, Matt. 
Your description of your business model makes good sense. The outsourcing of bau codewriting and analysis does indeed make onshore staff available for more focussed and immediate work, and the opportunity to get the bau done more cheaply is a no-brainer. As long as our good friends in the CSC are unaffected the customers shouldn't notice the difference. (And don't get me started on the difficulty of attracting skilled IT resource to Sheffield - I could probably make your hair curl with some of the problems we get at my place.)

[#8]

I had an experience by doing that offshore resourcing for a large company. Though this was not for IT development, I think it might still be of interest.
The same company did that in another context directly related to IT development and sustaining, I'll discuss it in another post.
We subcontracted a part of our engineering project to a company in India as they were sensitively cheaper than trying to do that in UK. However, due to contract Liquidated Damages we had to ensure some smooth progress, so we ask this company to send a couple of guys over to UK. That should have allowed us to avoid language issues, and proper control over the project as these guys were based in our offices.
To make is short, at the end of the project -project duration was about 18 months- and validate we should continue down this route, I did some simple analysis.
From a financial point of view, we saved 15% as compared to the initial budget. This is not the expected 50% we could think when they quoted us -they've even contracted to other companies in China for low skill jobs.
Two reasons for that decrease of "benefit": we first went for a time base contract instead of a lump sum and second our technical managers and experts booked a hell of a time because of increased support as this contractor had no knowledge of the specific points in UK.
At the end, we asked the UK suppliers and the Indian company to quote for another project: this time on a lump sum basis with LDs in case of missed milestones. A medium size UK based company was the most cost attractive and their proven success records left no doubt about their quotation credibility.
Regards,
Patrice
PS: I will not mention the business to avoid any breach of confidentiality.

[#9]

So still me, but now re. the offshore contract related to IT development.
The Customer delivers HW & SW products to an industry niche i.e. if you want to have the right product you need to know the business context of your Customers.
So the purpose of the project was to implement an hardware and software product for Industry with a number of quite specific requirements/constraints.
The Customer is based in North America and the offshore company based in India.
The Customer did some Technical Requirements documents, "the best they ever did" as they told me. The contract was a fixed price contract without however serious Liquidated Damages.
The contract contained all the phases from technical specifications to Factory Acceptance, plus a kind of Type Registration as we deal here with a commercial product in a harsh environment.
Though the duration of the contract was one year for the HW part, 2 years after there was still nothing commercially available. Regarding the SW, you wouldn't talk about it: just plain shame.
Here again, the offshore company was chosen if not imposed by Procurement without co-operation of technical people. The project team was not composed of the people who should have been there i.e. wasted time in learning this offshore team what they should know and do.
There was also not tight management of the offshore team.
Moreover no intermediary milestone was in place to validate the progress, I mean "physically" something you could see & touch.
As you notice there is no difference here in the way you should manage a project implemented by a UK based company or an Eastern Europe company or any other company.
The lack of resources PlusNet has pointed out is something IEEE emphasizes for years now. Technical jobs have no longer the attractive edge and for the few still interested in, the money is down in the South.
Going offshore more and more often is certainly going to aggravate this situation.
No so long ago, automation came to replace a number of jobs -and continues to. That didn't came from "other" countries.
The society changes, we have to change -or win the EuroMillions - European lotto.
Patrice

[#10]

Quote from: MattGrest

I've just posted a new blog entry on PlusNet's ventures in India. Have a read of it and give us your feedback and/or experiences you've had personally. [/url] snip

I would sooner we stay in the UK, A big bank/credit card company I`m with cocked up me request to cancel a credit card I had (the wifes 2nd card) they cocked it all up it was a night mare (long story) but the reason why, they could not understand my instructions even though I said it 5-6 times and asked them to say it back to me what I wanted. I`m now leaving this said major bank/credit card company (been with 20+ years) and moving to a UK based branch (as the TV ads say) so I`m not happy stay in Yorkshire or move to Lancashire (I`m from M/Ch 😉

[#11]

Quote from: kenny

I would sooner we stay in the UK, A big bank/credit card company I`m with cocked up me request to cancel a credit card I had (the wifes 2nd card) they cocked it all up it was a night mare (long story) but the reason why, they could not understand my instructions even though I said it 5-6 times and asked them to say it back to me what I wanted. I`m now leaving this said major bank/credit card company (been with 20+ years) and moving to a UK based branch (as the TV ads say) so I`m not happy stay in Yorkshire or move to Lancashire (I`m from M/Ch 😉

Yes, but let's be clear, we're not doing anything with our Call Centre, this is staying firmly in Sheffield. My blog post related to our decision to set up a software development team in India.
Matt

[#12]

The biggest problem you will face in India is staff retention. It is a cultural requirement to continually move on (and feather your CV) as a young IT professional in India. Consequently there can be a lack of continuity within projects. It's very disheartening when someone with whom you've developed a decent working relationship, and who has your confidence, suddenly isn't there one day.
A further problem can be the management ethic offshore, which incorporates a reluctance to say No. Everything you ask for will be agreed to, followed by a "clarification" email shortly afterwards! It's important to be extremely precise in your specifications, because an offshore resource will not apply the common-sense principle when building something. However, you know all that!

[#13]

I opened my big mouth again when you said a member of staff had just come back from India I said as a joke I hope Plusnet are not going to open a office in India.
Are you telling us no one in Europe could do the job for you?
It has to be down to costs?
I just hope customers will not have to deal with staff in India can you confirm this?
I have used dell tech support in India what a nightmare I tried for 10min to tell him there was a 3 in my serial code he asked me how do you spell 3 what is a 3
Their English is very poor and as for time zones problems
Puddy

[#14]

Quote from: puddy

I opened my big mouth again when you said a member of staff had just come back from India I said as a joke I hope Plusnet are not going to open a office in India. Are you telling us no one in Europe could do the job for you? It has to be down to costs? I just hope customers will not have to deal with staff in India can you confirm this? I have used dell tech support in India what a nightmare I tried for 10min to tell him there was a 3 in my serial code he asked me how do you spell 3 what is a 3 Their English is very poor and as for time zones problems Puddy

As I clearly stated in my Blog post, we are setting up a software development team in India; we are not moving any aspect of our Customer Support there or do we have any plans whatsoever to do that.
Please, read my blog post and allay any fears you may have about us doing anything untoward with the Customer Support area of our business..
Matt

[#15]

Quote from: passer

A further problem can be the management ethic offshore, which incorporates a reluctance to say No.

I can not directly comment on India but Malaysia also have a reluctance to say No and 90% of the time it's not a problem but if they did not have the answer in house they would outsource it. Without prior approval. This could be a problem on regulatory reguirements as I was involved in medical devices sold in the USA which were covered by FDA requirements.
I was outsourcing manufacturing and not design but I would not hesitate placing further orders for manufacturing in Malaysia. Just have to be aware on the Yes we can mentality. The product I was involved in had 2 manufacturing sites, one in Malaysia and one in the UK. The UK facility caused me more problems as when they had problems they would blame the design and stop production. When the majority of the problems were down to their procedures. In contrast when the Malaysia facility had problems they would investigate and report back with their findings and recommendations. So sadly have to say that the skill set was in Malaysia and not in the UK.