Computerworld - For global companies developing business-critical applications, time to market is of the essence, particularly as they launch e-business initiatives.
An approach that has worked in the past—adding second and third shifts here at home—doesn't play well these days, with skyrocketing salaries and a lack of IT talent defining the market. Increasingly, global companies are taking advantage of the fact that they have offices in multiple time zones and are expanding their development efforts by opening development centers around the world and staffing them with people who work in shared environments with U.S. teams.
One company that's doing so is San Francisco-based DHL Worldwide Express Inc., which has opened centers in the U.K. and in Malaysia, India and other parts of Asia.
The international delivery giant is able to take advantage of time differences between these locations and California to create an extended workday. More important, it's able to put more bodies on problems at a time when IT hiring in the U.S. isn't easy.
Circumventing Restrictions
Like other global companies, Fremont, Calif.-based ApplianceWare Inc. looked outside the U.S. when it couldn't find the development talent it needed here.
"Our location in Silicon Valley places us in the most competitive software environment on the planet. The lack of available talent and the exorbitant prices mean we can't afford to expand development operations here," says ApplianceWare President Stacy Kenworthy.
Initially, ApplianceWare decided to open its own facilities in Minsk, Belarus, to take advantage of a sizable pool of talented developers and a 10-hour time difference that, when complemented by the West Coast time zone, would increase the number of hours the company could work on projects.
However, says Kenworthy, the company found that government restrictions on private enterprise would make doing so prohibitive. ApplianceWare's solution was to partner with BelCaf, a development firm in Minsk. BelCaf has since changed its name to Sam- Solutions.
Although ApplianceWare doesn't have to hire developers in Belarus, it considers Sam- Solutions to be part of its business. Therefore, it worked with the developer to appoint a manager to oversee work and handle translation issues between Fremont and Belarus. The company also frequently sends an IT manager who works in Denmark to Minsk to ensure that processes and delivery are on track.
There are cost advantages to doing development in offshore locations, but they shouldn't be a primary driver, says Kenworthy. And those savings can be offset by additional travel and communication costs, he says.
"You need to make substantial investments in communications," he says. "And there's no getting away from face-to-face contact, so there's airfare, investments in process creation, investments in learning curve and other front-end work. You're basically changing your organizational structure."
- Kym Gilhooly
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