By Philip Karecki Companies across many industries have achieved the kind of revenue growth that stockholders are demanding by offshoring software development. While driving down hourly and projected costs in a significant fashion, offshoring has distributed development teams across the globe.

Distributed development has grown in clear phases. In the first phase, teams were made up of employees of a single company in multiple locations within that company. Those employees could be distributed across two or three buildings on a campus or across several states, provinces, or regions.

Distribution became global in the next phase as companies, either through wholly owned subsidiaries or joint partnerships, purchased facilities in other countries and directly employed citizens of those countries. The latest phase has seen more partnerships between vendors who have their own distributed development capabilities — the partnership between CSC and IBM is only one example — which means teams are distributed across companies.

Global sourcing is no longer just about India. It is evolving as other areas — China, Eastern Europe, even South America — expand the talent pool by getting into the game. Global sourcing is no longer just about less expensive labor, either. More and more, it’s about getting access to that bigger talent pool.

Manage globally the way you manage locally

But how do you manage that global distributed development model to sustain growth? You will need to change your operating model for IT, but you can do it by applying the same core components you used in traditional development projects.

The difference between traditional development projects and the global ones you have to manage today is that now you have to factor in a 24x7 development cycle with different cultures, different time zones, and the distances between the people doing different facets of the development work. But the same five core components — delivery model, technology, people, processes, and governance — still apply.

Delivery models   You need to understand your delivery models. How does the in-house team translate the business value to derive requirements that can be passed off to the offshore development team?

Technology   How do you leverage emerging technology to accelerate those business innovations? Is this something you’re going to model upfront, locally, and give to the distributed development teams to use in a consistent fashion around the globe? You need to mature the technology significantly to facilitate this process.

People   Developing a plan for the new organization means revising your hiring, training, and investment plans. Whether it’s cross-cultural training and skills or taking people who are able to liaise between the business and the technology, you need to focus on the right people with the right skills.

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