Saturday, February 28, 2004

Embrace Transparency - the Antidote to Offshoring

A good thread at Joel Spolsky’s Ask Joel forum, is discussing, offshoring. What’s really interesting about this is the amount of opinion without much in the way of objective data. The guys who mention cost as the motive are on the right track. The real problem is that the industry isn’t measuring the right things and making an objective assessment of offshoring is difficult when there is a lack of information in the (software development) economy. What’s missing is data on lead time and client-valued functionality produced.

Quoting from the 3rd sentence in my book, “Senior executives, perplexed by the spiraling costs of software development and depressed by poor results, poor quality, poor service, and a lack of transparency are simply shrugging their shoulders and saying, ‘if the only way this can be done is badly, then let me do it badly at a fraction of the cost.’”

Rather than argue, that design can’t be separated from coding - because no one who isn’t in the software business will believe you - and even some that are won’t believe you either - [Different parts of a design have different levels of uncertainty, not all parts of a system are truly unknown until the code is tested. Ref: Donald Reinertsen, Managing the Design Factory and some other pieces at this site including Separation of Concerns.] - instead developers must embrace transparency.

When executives have all the metrics - the throughput (or production rate),  the work-in-process inventory, which is directly proportional to, the lead time (the process flow time to complete working code) which is a direct input to, the rate of depreciation of the design/ideas inventory, and leads to a depreciated net present value for projected revenue, from dollar values associated with sales made/(or lost) through faster/(slower) delivery, together with the working capital required to fund less/(or more) work-in-process - only then can they make informed decisions about offshoring. While executives only have cost metrics, they will continue to make sub-optimal decisions. It’s up to development organizations to learn to measure the right things and to report them transparently to the top of the organization. This will allow offshore facilities to be measured by the same yardstick. It isn’t enough to subjectively argue that a subject matter expert in Chicago and a developer in Bangalore will take longer to produce a product with lower quality than when the two of them are in the same room together in New York. You have to supply the objective metrics to back the argument.

Quoting the 5th and 6th sentences from my book, “Software development has to cost less and produce better results, more reliably, with better customer service, and more transparency. This book will teach the agile manager how to achieve that.”