Offshoring Product Development: The Proximity Conundrum

The biggest ingredient of successful off-shoring has got to be how well business requirements get translated in a way the technical development fraternity understands it. This rather low level need grows up into understanding business drivers, customer needs and market segmentation later as the off-shoring matures (I hope to write about that some other time). It all starts with the translation bit, though. There are three models (two-and-a-half actually, but more on that later) that should lead to effective off-shoring.

All the models have three components:

  • Business: They bring home the bacon and write the pay-checks. They spend most of the time understanding customers, the competition, emerging trends and finding out innovative ways of satisfying customer wants. All requirements originate from this group though asking them to provide granular detail would be a criminal waste of their time. This function is never “out-sourced” though it can be off-shored to captive centers
  • Technical Development: They build the software code. Included in this are software architects, designer, programmers and testers. Oh yes, project managers too.
  • Translators: They are reason for this post. Translators are those who understand the business requirements in whatever shape and form business articulates and converts that to whatever shape and form Technical Development understands.

The question is where should the Translators reside.

Both 1 and 2 above are valid models of placing the Translators. And the mistake people make is choosing one model over the other. The trick lies in starting with 1 and then replacing it migrating the model to 2. Here is why

  • Businesses that have never dealt with Translators don’t know how to. And if that team is a few oceans away, they never will. The endeavor here is to inculcate a behavioral change with Business and for that to happen it is imperative the the Translators are in closer proximity to them. At least initially
  • The communication load between Business and Translators initially will be very heavy. It is a risk to experiment with asynchronous communication methods then
  • Over time Business will become more at ease with Translators (and vice versa) and the communication flow will slowly begin to skew towards Translators and Technical Development. At around that time, the Translator function should be migrated towards proximity to Technical Development

There is a third model as well, usually taken up by companies with deeper pockets.
I personally do not subscribe to this one because it has one arrow too many for my comfort.

Communication is the most critical aspect of off-shoring and adding one more arrow adds significant risk of exploding (and [hence] breaking down) communication channels (Immortalized in The Mythical Man-Month by Fred Brooks).

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It is the best of times

Citigroup is tethering on the edges of bankruptcy. It is perhaps only a matter of time that GM files for Chapter 11 protection. The other so called behemoths can be seen standing in line for largess doled out by Uncle Sam. Oh, yes, Circuit City went belly up too.

Paradoxically, this is the very situation that large corporations promised will never happen. Size matters, their shirts read. History seems to have made bums out of the bumper-sticker management gurus. The bigger the size, the deeper seems to be the problems. Several commentators believe the solution lies in breaking up these companies into smaller ones to bring back a sense of urgency to survive (here’s advice to break-up GM and Citi). And Gordon Gekko lambasted the American bureaucracy in his famous “greed is good” speech more than a decade back.

If you are a product manager for a small sized company, busy solving a problem that customers will pay you for, this situation should be music to your ears. The world will very soon shift gears to Milton Friedman’s prophecy of “Small is Beautiful”. Words like “innovation”, “nimbleness”, “customer centricity” will make a comback sans the usual large company rehtoric of how they are best suited to deliver these. Yes, the broken-down large companies will appear in their smaller avatars but sadly, with their big-company-bullshit now genetically coded. Fear them not.

Keep your head down, Product Manager, and focus on your work. The next decade is yours.

PS: Stay away from the temptation of hiring someone who was fired from one of these large dianosaurs just because he has “connections”. The “connections” are looking for jobs as well.