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2.4.3. Quality improvement

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For years there has been dissatisfaction about the quality of packaged outsourced software and the torrent of bugs, fixes and patches. Most firms realise now that a low cost service in IT that does not deliver quality could erode savings as more effort will be required to correct badly delivered solutions. Therefore, the lower cost of labour in developing countries does not matter unless you also take into account productivity and quality (Yourdon, 2004). A survey by Deloitte & Touche showed that 47 % of the interviewed companies outsource their IT services in order to increase efficiency and to improve quality (Bajpai et al., 2004).

Quality in IT outsourcing takes a number of dimensions including meeting delivery time at specified cost and to the client’s specifications. If the delivered service meets or exceeds client expectations, then it is perceived to be higher quality. The measurable benefits of quality employment when outsourcing software development could be summarized as above (IDC research, 2003):

 Fewer software bugs: Often resulting thorough documentation of technical and functional requirements that allow coordinated version control.

 Getting it right first time: Results from having sound software engineering processes, skilled employees, and string project management. As a result, fewer or no reword needed, which translates into greater chance of completing a project on time.

 Swift resolution of problems: When problems do arise during the course of software development, they can be tracked, analyzed and resolved quickly.

 Improved productivity: The software engineering processes, methodologies, and also tools used a part of an integrated quality system can lead to improved productivity. As a result, more lines of code may be written per day, which in turn aids meeting project deadlines effectively.

In addition, in today’s offshore outsourcing philosophy, companies have benchmarks with their offshore vendors that ensure the employment of quality metrics that lead to on-time delivery of a robust system and result in cost savings. Thus, the companies most aggressively pursuing offshore outsourcing are those that know how to measure quality and productivity. Yourdon (2004) argues that such companies value measurement on quality initiatives such as ISO-9000, Six-Sigma and SEI-CMM and any countries or organisations that ignore or don’t know anything about these measures are likely to lose out. Moreover, based on a survey by Carmel and Agarwal (2000) of American largest firms, certification by a recognized third party is a key aspect of control of the adherence to quality and standards. For most firms in this study, CMM recurred as the dominant quality indicator and doing work with CMM-certified offshore vendors was viewed as a way to elevate the importance of process improvement within the US firm’s domestic sites.

The standards ISO9000 and CMM are common in the offshoring practice, even from the providers’ perspective. Most established offshore suppliers in the world have built up large centres with processes that are standardized and determined by quality norms offshore. These offshore providers believe that certification is the most important way to gain credibility with foreign customers. A study by Hawk and Mchenry (2003) in Russia showed that 15 of 29 largest Russian software companies where certified CMM or seeking CMM certification by the end of 2003. Likewise, an analysis of the top 300 providers in India showed that 216 firms have already implemented ISO9000 (Kobayashi-Hillary, 2004). The objective of certification standards is the implementation of balanced and tested communication flows between the principal and agent (Trampel, 2004).

Furthermore, software tool suites, such as Oracle application version 11i, represent a sharp contrast to the CMM level 5 standards they are coming to expect (Mirchanani, 2003). Thanks to these standardized tools, a country like India currently has the world’s highest percentage of ISO and CMM Certified software and service companies.

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