Software development – Indian link

Software development - Indian link

Indian communications links which allow on-line software work to bemonitored by the client, have made offshore application development aviable way to cut costs without compromising quality, says Rajan Naik.

Development of new IT systems is becoming increasingly important to organisations for maintaining competitive position in the marketplace.

The more exactly these systems fit the structure of a company, the greater the gains in terms of efficiency in the workplace, customer service and management control. In markets with long development times, however, the risks are high and time to market is crucial.

Companies have two options for the realisation of IT goals: the implementation and customisation of packaged software or the development of a complete custom solution tailored to fit exact requirements. Packaged software is designed for use by more than one organisation; yet every company is different. This means that to perform all of an organisation’s functions might require customisation of the package. The question is how large the customisation job would have to be before bespoke software development becomes a viable option and to what extent to which the software can be customised as the end result could be a more expensive yet sub-optimal system.

Where the optimal solution is bespoke software, carrying this out entirely in the UK can be extremely expensive. This used to lead many of these companies to reluctantly opt for a compromise between fulfilling requirements exactly and sticking to budgets rigidly.

Nowadays, the availability of offshore development has made bespoke software development an affordable option by tapping the resources of a country with lower domestic wage costs. We usually reckon on anywhere between a 40 per cent and 60 per cent reduction in total costs for offshore development carried out in India compared with the UK. Many companies, including major multinationals, are following this route to reduce costs without sacrificing quality. In addition, many of these firms are turning to the IT service companies which run their legacy systems to manage the whole process.

The advantage of using an IT services company is that it already has the expertise, human resources and development infrastructure to carry out the project. This can be an extremely important issue when time to market is crucial.

Hiring others to write your code is not new. What is new is that it has never been so cost effective, so safe and so convenient as it is now.

Cost effective – as labour costs are strikingly less than in Europe or the US. Safe – because the whole process is underwritten and managed by an IT service company. Convenient – the same UK firm that runs your legacy systems and installed your workflow can manage the whole process.

The main areas for offshore development are India and the Philippines.

From these locations, software development firms offer application engineering, reengineering and maintenance to IT user organisations and product developers.

Companies like Texas Instruments, Siemens, Motorola, AT&T and Philips have all chosen to locate their software development factories in India because of the existence of an established IT and communications infrastructure, a large pool of educated technical professionals, most of whom speak English and because of a favourable government policy.

The old, developed world’s image of India as a technological backwater is changing. Indeed, there are now more than 350 software companies in India including multinationals and indigenous firms that service both the burgeoning domestic software market and the export market.

Under its Computer Software Policy of 1986, the Indian Government began an ambitious programme of investment and reform designed to make offshore development a much more attractive option. These reforms involved the provision of technical training and the creation of special export zones with high speed datacommunications and drastically cut red tape. This has led to the development of a software industry in India approaching $1bn and the creation of the second largest English speaking scientific and technical cadre in the world – the largest being in the US.

The main concentration of IT services suppliers within India are in Bombay, where many software companies are headquartered, and Bangalore, India’s Silicon Valley. India has an extremely rich technical resource base and almost all types of bespoke software development can be carried out there.

This includes database applications, object-oriented development, traditional 3GL projects, client/server systems and technical software.

The communication links installed in the export zones enable computers situated anywhere in the world to be used by programmers in India on a real-time and on-line basis. They have also helped to allay concerns over the geographical separation between customer and developer as the client is able to monitor progress on his project on a minute-by-minute basis, ensure quality checks and communicate with the programmers as if the development were being carried out on site.

Adherence to rigid standards is critical in convincing reluctant UK firms that offshore development can produce the same quality results as UK software development organisations . Many Indian companies are now accredited to ISO9001 as well as several European and industry specific international standards.

However, offshore development is not the solution to all software development projects. The project must be large enough or consist of enough small sub-projects for the economic benefits of offshore development to be realised.

The larger the project and the more man hours spent on it, the greater the benefit of the assembly line approach adopted by most offshore software factories (these benefits usually begin to be worthwhile above 2,000 hours).

Overall length of project is another important consideration in that projects of under two to three months’ duration are generally not suitable for offshore development because of set-up and familiarisation times, unless these are continuations of earlier projects.

In addition, projects which would involve shipping prototypes or extremely expensive medical equipment around the world are unsuitable. There are obvious dangers of damage to the cargo in transit which would make development in the UK a much more attractive option.

Even if the cost benefits of offshore development provide a convincing argument, it might appear that the whole idea is one big logistical nightmare.

This is why it is important to have a company with local UK knowledge working alongside the offshore development factory. With its knowledge of the UK market and the requirements of UK firms, the local operation can first carry out the groundwork-assessment of requirements, functional design and detailed specification, and then pass the programming and unit-testing side of the project over to the offshore operation. The final stage of the project – internal acceptance, quality auditing, acceptance testing, installation and end user training – can then all be carried out by the local operation.

Offshore development might not be a universal panacea but it represents an attractive, no compromise option for system development that has until quite recently been unaffordable. As more companies take this route, new offshore development areas will spring up, contributing to the rise of the global IT market with offshore expertise supplementing local knowledge.

Rajan Naik is commercial manager at Origin India.

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