Risk Factors for Offshore-Outsourced Development Projects

Fri 29 August 2008

The June 2008 CACM contains the article "A Risk Profile of Offshore-Outsourced Development Projects"

Since this is a common profile, I thought I'd reproduce the Top 10 Risks. Some of these are universal across all project profiles ("Lack of top management commitment"), but others are definitely more problematic for offshored projects. I've highlighted those I think are notably different. All of these should be addressed in your project planning...

  1. Lack of top management commitment
  2. Original set of requirements is miscommunicated
  3. Language barriers in project communication
  4. Inadequate user involvement
  5. Lack of offshore project management know-how by client
  6. Failure to manage end-user expectations
  7. Poor change controls
  8. Lack of business known-how by offshore teams
  9. Lack of required technical know-how by offshore team
  10. Failure to consider all costs

That's not to say that I think the ones I did not highlight are unimportant, it's just that I think you can run into those issues onshore (if you replace "language barriers" with "poor communication skills").

Inadequate user involvement and poor change controls are, I think, more acute risks with offshore-outsourced projects because there's a certain amount of "out of site, out of mind" to these projects. It's not like people are hearing programmers talk around the watercooler or at lunch; offshore projects have a greater risk of 'going dark' for long periods of time. Similarly, with different working hours, different holiday schedules, etc., I think it's considerably more common for offshore work to get off the change-control rails. You really need to do daily check-ins with offshore teams, just like you do with local teams. It's harder and slower than a standup meeting, but I think it's definitely a necessary part of the daily routine.

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