Entries RSS · Risk Sharing Partnerships, solutioning offshore quality issues?
Unlike in the software industry, 0-default in terms of integration is the quality standard of aeronautic giants Airbus, Boeing, Dassault, Cessna and Embraer.
It takes thousands of suppliers to manufacture a plane. And guess what? Suppliers don’t immediately get paid for their work. Airbus, for instance, has built risk sharing partnerships with all its suppliers to reduce its working capital and enhance interest alignment.
But what is a risk sharing partnership? Basically, for each plane sold to an airline company, the supplier gets a percentage of the revenues corresponding to the relative value in complexity and workload it has put into the project. As an example, Messier Bugatti wouldn’t get paid when it ships carbon brakes, but would receive x% of all revenues derived from Airbus using Messier Bugatti’s aeronautical braking systems – x most probably being the result of both a negotiation and a cost breakdown analysis.
When it comes to hacking code, it seems so many complains about offshore development quality that it’s the responsibility of both software module suppliers and their clients (quality’s usually good when the client know what it takes to manage a project) to define new business models to align interests of all parties involved in information system projects. For instance: fee per SQL request, percentage of each transaction, percentage of each sale in B-to-B markets, etc. I don’t abide anymore by the paid-per-man/day dogma: it lacks the handcuffs to help invisible contractors turn into business partners.
In my opinion, risk sharing partnerships represent an elegant solution to the drawbacks of offshore development.
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.NET (C#), Africa, Asia, Business Process Management, Business intelligence, Business strategy, CIO, Clusters, Consulting, Economics, Entrepreneurship, Europe, Globalization, HP, IBM, Israel, Networks, Organization, Outsourcing, Project Management, SME, Software, USA, innovation, open-source, operations
[...] Risk Sharing Partnerships, solutioning offshore quality issues? Filed under: Business strategy, CIO, Globalization, Israel, Organization, HP, operations, Business Process Management, Clusters, SME, Business intelligence, IBM, .NET (C#), Europe, Software, Economics, Project Management, innovation, entrepreneurship, USA, Asia, Outsourcing, Networks, Consulting, Africa, open-source — Jeremy Fain @ 12:46 am [...]
The ability to offshore successfully is distinct from the ability to manage a development project successfully.
We have come across several ways to tip the scales in favor of quality offshoring. Here are a few:
* Don’t rely on top-down scheduled meetings and communication. Offshore developers should work directly with the business analysts and others writing requirements. People on both sides of the ocean should be encouraged to call and email each other directly.
* Invest in the right tools and templates for your development environment. With outsourced teams, rely on your tools to replace the conversations that take place on a day-to-day basis for onsite teams.
Hope these two tips help.
See also our discussion at http://www.manoatech.com/quality