Offshore Software Development - Frequently Asked Questions

1. General questions about offshore software development

Is it true that most development projects are being pushed offshore to save costs?

Why is the popularity of offshore software development growing so fast?

Why are Russian offshore software development companies most popular at the market?
Why do most of Russian offshore development companies reside in St.Petersburg?
Is it true that many world-famous US and Western European companies already use Russian sub-contractors for their programming projects?
What’s the difference between contract programming and outsourcing?
What kind of projects are most suitable for offshore development, big or small?

2. Questions about Intelligence-Soft development methodologies and services

What if I am not sure of functionalities needed for the software to be developed?
How do you manage change requests during the development?
What about Intellectual Property Rights? Or simpler, who owns the code developed by your programmers?
How can I communicate with Intelligence-Soft development team to keep trace of the progress?
How do I pay for your services?
Do the software development procedures used by Intelligence-Soft meet the demands of Western standards?
Can you set up a dedicated development team for us in Russia?
How do I get started with Intelligence-Soft?


to top

Is it true that most development projects are being pushed offshore to save costs?

While cost savings were the primary reason companies outsourced offshore in the early 1990's, in recent years priorities have been changing. Table below shows top 10 reasons for offshore outsourcing according to the International Outsourcing Study completed by Colorado Institute of Technology in November 2004. Values shown below is the percentage of respondents (top managers of American companies using the services of offshore software developers) who chose certain reason as having key importance for their decision to outsource.

Lower labor cost 70%
Staff augmentation 65%
Access to high quality employees 30%
Access to technology 30%
Meet customer requirements 25%
Meet parent company's requirements 20%
Localization 20%
Match competitors 10%
Extend hours/coverage 10%
Other 40%
   

Why is the popularity of offshore software development growing so fast?

There are two main reasons:

  shortage of domestic IT professionals in USA and Western European countries
  customer’s wish to cut development expenses.

Drew Robb’s article from “Information Week” magazine explains both mentioned reasons. Click here to view selected fragments from this article.

Why are Russian offshore software development companies most popular at the market?

Russia has a 40-year history of manufacturing computers and producing original software for them. For many years Russian universities put into the market more and more high qualified IT professionals to satisfy the growing needs of military enterprises and research institutes in human resources. Political and economical changes of recent years caused serious production cutback in many branches of industry. As a result thousands of well-educated and experienced engineers became unemployed or underemployed. It means that today it is much easier to find a high-qualified programmer or WEB-designer in Russia than in any other country.

Another important reason attracting customers to Russian offshore software development market is a relatively low level of programmer’s salary and small overheads. It allows to minimize expenses that in many cases is the determinant.

Why do most of Russian offshore development companies reside in St.Petersburg?

Firstly St.Petersburg is rich in IT professionals. Russian oldest and most respectable centers of education - St.Petersburg State University and St.Petersburg Technical University (former Polytechnic Institute) are located in our city. In addition to these two, every year more than 20 St. Petersburg Collages and Universities train thousands of software professionals having B.S., M.S. or Ph.D. degree in computer science.
Another important factor is St.Petersburg’s favorable geographical position in the North-West of Russia, very close to Scandinavian countries and not far from other European countries. Its seaport, International airport, large communication infrastructure attract foreign customers.

Is it true that many world-famous US and Western European companies already use Russian sub-contractors for their programming projects?

Yes it is true. Such well-known corporations as Sun Microsystems, Motorola, Lucent technologies, IBM, SCO, Lynx, Nokia, Nortel Networks, Intel, HP, Rockwell, Samsung, Boeing keep long-term co-operation with Russian programming teams employing from 10 to 300 developers each.
You can easily add to this list more names of Western European and US companies using the services of Russian offshore development firms if you find a minute to look at articles from popular IT magazines collected on our site.

What’s the difference between contract programming and outsourcing?

These two terms are often confused, but they are not the same at all. Contracting is when a company (customer) purchases services from another company (supplier). In this situation, the customer "owns" and controls the process. In other words, the customer tells the supplier exactly what it wants and how it wants the supplier to perform those services. The supplier cannot vary from the customer's instructions in any way. The customer can replace the supplier quite easily by canceling the contract.
In outsourcing, the customer turns over the control ("ownership") of the process to the supplier. The customer tells the supplier what results it wants the supplier to achieve, but the supplier decides how to accomplish those results. In outsourcing, the supplier has expertise in a certain process (such as programming or web development, etc.), and it has economies of scale. If the customer were to dictate to the supplier how to do the job (as happens in contracting), the customer would be destroying an important aspect that makes outsourcing work – the value that is created by using the supplier's expertise and economies of scale. Telling the supplier how to do the job also eliminates accountability on the part of the supplier, and this is an important element in successful outsourcing relationships.
Here is an example of software development services that are outsourced and that are contracted.
Contracted: The customer says it wants a program for staff planning. The customer tells the supplier how this program should work, how screen and printed forms should look like, which programming language and development tools should be used, etc…
Outsourced: The customer says it wants to automate the process of staff planning assuming that he needs some software to reach the result. The customer describes his intentions in general way, assigns the limit of expenses that he is ready to spend and provides supplier with all necessary information about planning rules and practice in customer’s company. Then the supplier decides how to accomplish the task, how many programs customer really needs, should these programs be implemented as client-server system or no, which programming languages and database systems are most suitable, etc.
We don’t want to say here that one of these two models is better than another. Depending upon the situation, each of these models may be desirable and successful. Intelligence-Soft engineers have an experience in both.

What kind of projects are most suitable for offshore development, big or small?

Both. If your company has only small programming tasks from time to time, then by delegating the work to offshore team you will save your time and money because in this case you don’t need to hire domestic professionals having skills and experience necessary to each project. With big projects you profit even more by the occasion of using offshore development team assigned to work exclusively with your project and manage this team as your own personnel.

What if I am not sure of functionalities needed for the software to be developed?

It is a very common question. Offshore development model is a joint effort and we welcome all our clients to work in close association with our team from the very initiation stage. We are even ready to take up your requirements verbally and put them into proper documentation formats in order to reflect your needs. We put all our efforts to analyze your business needs and then start working from there. We, along with you, will undergo a brain storming process to bring the best of outputs.

How do you manage change requests during the development?

Here is the extract from our standard software development agreement answering to this question:
"Customer may, in its sole discretion, request that changes be made to the Specifications, or other aspects of the Agreement and tasks associated with this Agreement. If Customer requests such a change, Developer will use its best efforts to implement the requested change at no additional expense to Customer and without delaying delivery of the Software. In the event that the proposed change will, in the reasonable opinion of Developer, require a delay in delivery of the Software or would result in additional expense to Customer, then Customer and Developer shall confer and Customer shall, in its discretion, elect either to withdraw its proposed change or require Developer to deliver the Software with the proposed change and subject to the delay and/or additional expense."

What about Intellectual Property Rights? Or simpler, who owns the code developed by your programmers?

Our agreements with our customers assume that all source codes, graphic images, files, databases, documents and other materials developed under the terms of the agreement become the sole property of the customer upon completion of the development and receipt of final payment.

How can I communicate with Intelligence-Soft development team to keep track of the progress?

Communication with Russian development team is often a concern for foreign customers. The issues could be:

  language barriers,
  quality and availability of modern telecommunication technologies in Russia.

We can say that once you decided to outsource your project to Intelligence-Soft you don’t need to worry about communication. We pay special attention to the language education of our employees. Each developer had passed special tests to confirm his/her ability to speak English fluently before he/she was hired.
Progress of telecommunication technologies and global networks made it possible to communicate with the foreign contractor staff as easily as if they were sitting in the next room. By using modern communication technologies like Internet telephony, software for working groups (“groupware”) and videoconferences the customer has full everyday control over the development process.
And finally, we implemented Web-based Project Management System providing Intelligence-Soft developers and our clients with the set of convenient planning, monitoring and communication tools for day-to-day control and collaboration. Visit Project Management System web site for more details.

How do I pay for your services?

Intelligence-Soft accept payments in US dollars or Euro by means of wire transfers to our bank account.

Do the software development procedures used by Intelligence-Soft meet the demands of Western standards?

Intelligence-Soft development methodology assumes following of conventional Western standards in planning of the development process, in execution of administrative, financial and technical documents. Our technology of the development doesn’t differ in any way from that in other industrial countries.
Furthermore, if our customer has any special demands to forms and contents of the documents (for example, internal company’s standards) we are ready to follow these demands as well.

Can you set up a dedicated development team for us in Russia?

If you expect a steady flow of work using consistent programming languages and operating systems for the period of one year or more, it may be good idea to have Intelligence-Soft set up an offshore team dedicated exclusively to your company. Required number of developers is not important - the size of your team may start even from one engineer. Your will have an opportunity to manage the work of your team members as if they were your own employees.

How do I get started with Intelligence-Soft?

All you have to do is to send us e-mail. Our project manager will contact you promptly. You are welcome also to fill in our Project Description form or Contact Us form.



Take part in our Offshore software development survey


Want to share your opinion about the outsourcing of IT jobs with other visitors of our web site? Want to get an access to the answers provided by other people? Take part in our offshore software development survey.



Project Management  ||  Software Department  ||  Mobile application development  ||  Business Model
News  ||  Offshore Development  ||  Articles  ||  Testimonials  ||  Contacts  ||  Post Your Project
Site map  ||  Privacy statement

Valid HTML 4.01!     Valid CSS!