On Wednesday, October 22, 2003 at 9:35:37 PM UTC+5:30, Your Special Friend wrote:

http://www.nwc.com/showitem.jhtml?docid=1421f3

F E A T U R E

How Offshore Outsourcing Failed Us

Oct 16, 2003
By Wesley Bertch

What are my options if my highly productive, 15-person software team generates only one-third the output our customers demand? I was
certain that augmenting our team with offshore development was the
right answer. It wasn't, at least for a small project we recently
outsourced to an Indian firm. Here's our story.

I lead the software development group at Life Time Fitness, a
high-growth, nationally expanding health and fitness chain. We're more
than just health clubs--we have spas and salons; cafés; member
services, such as personal training and swimming lessons; a division
that produces a nationally distributed magazine; a division that
formulates and distributes energy bars, powders and other consumer
goods to national retailers; and a corporate wellness unit that sells products and services to thousands of companies. In addition to
supplying these departments with systems, we provide software services
to Life Time's internal real-estate group. Keeping pace with the
growing software needs of so many diverse business units is a huge
challenge.

From almost every angle, offshore development appeared to be the ideal solution. We needed to augment our internal team cost-effectively,
without sacrificing quality. Judging from what analyst firms and the
media were saying about Tier 1 offshore developers, with their CMM (Capability Maturity Model) qualifications, Six Sigma quality
experience and "proven" low-cost development model, how could we go
wrong?

Personally, I was excited about the promise of offshore outsourcing.
If it worked, we'd be heroes to the business. Philosophically, I view
free trade as highly beneficial to its participants.

We met the key criteria for offshoring: centralized IT, process
maturity and years of experience working with Indians both in the
United States and offshore. We had executive sponsorship. We had IT commitment. We even had the perfect project to test the waters: a
small, low-risk Web application for our real-estate division. The application's purpose is to provide screens for entering new location information. The application isn't complex: The back-end database is Microsoft SQL Server; server-side Java components implement business
rules; and Java Server Pages (JSPs) are used for the front end. We use
BEA Systems WebLogic as the application/Web server and Concurrent
Version Systems (CVS) for source-code control.

The Tier 1 Indian vendor we invited to implement the project was
successfully supporting our Siebel 7 sales-force-automation
implementation, so both sides thought this project would be a slam
dunk. The vendor agreed to take on the project for a fixed fee of
$20,000, with a nine-week time line.

To avoid finger-pointing, everyone agreed that the vendor should
perform all phases of the project, from gathering business
requirements through QA (quality assurance). Life Time's internal
staff would monitor and participate in every way necessary for the
project to succeed. If the project proved successful (defined as
anything shy of disaster), we promised a small fortune in project
work.

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