Have you been outsourcing offshore in general for a long time now and to where?
We had been outsourcing to India for about six years. We were not particularly happy with the situation. The hourly rates are excellent, but the high turnover that we experienced as well as the difficulty we experienced in live collaboration with the developers took away a lot of the value.
What are the main issues do you find that make life harder when outsourcing?
There is nothing that beats having the group that you need in the room. Email, phone, video conferencing, collaboration software… they are all attempts to mitigate being able to have everyone’s presence. We have all of those tools, and each one improves the situation, but they do not collectively compare to having everyone in one place.
We also have no control over the company that the contractor actually works for – we can create as much as a positive work environment as possible, but if they don’t have that same work environment in the company we contracted, we will see higher turnover and burnout.
You have a contract with Brazilian firm Stefanini IT Solutions for your agile software development and testing needs. What helped you to choose them as a partner firm?
I first came in contact with Stefanini a number of years ago when I was initially researching the nearshore model. I initiated that meeting. I met them in Sao Paulo via a Brasscom event, which paired companies seeking Brazil IT outsourcing with Brazilian organizations.
I was very impressed with their team and the fact that they were very strong in pursuing Agile development methods, and that they were actively pursuing mid-sized enterprises. There were other companies that I looked at in Brazil, but Stefanini was also the front-runner leading into price negotiations.
Did you ever consider doing it yourself – just opening a remote office in Brazil with your own team?
For spurts of about 10 seconds, then I shudder at the logistics and don’t think about it again. There are numerous employment laws in Brazil (as everywhere), and the concept of dealing with those is overwhelming.
The only way that I would honestly consider a remote office is if my company had a strong presence in Brazil. Even then, I would very much tend toward outsourcing.
Do you see Brazil as a potential market for your company, as well as a provider of IT services? If so, does that make it more attractive working with Brazil on IT so you build a relationship with the country?
My company is primarily in the railroad industry and disaster, as well as environmental remediation. Brazil is quite dependent upon trains and they have certainly their share of man-made and natural disasters.
I think [Brazil] is an excellent market for my company, but I only oversee technology. That decision is, as they say, above my pay grade.
President Obama vowed to crack down on firms that use offshore outsourcing though the tax system. Have any of those election promises become a reality?
Not at all.
What do you see as the key advantages and downsides of your team in Brazil, especially compared to a different offshore team?
The nearshore model is completely different than outsourcing to India. The time zone similarity is critical to being able to dynamically schedule meetings and discuss issues on an ad hoc basis. Because the time zones align so closely, I have the same level of confidence that I can connect with someone in Brazil that I have in my ability to connect with someone in my building.
People at corporate, ranging from the product owner to accountants to system administrators know the individuals on the team in Brazil. The team is on our phone system which is tied in with our video conferencing system, so I see the team members daily. This never happened with India.
On the downside, I think sourcing individual English-speaking developers was more difficult in Brazil. English is a secondary, optional language in Brazil and nowhere near as commonplace as it is in India. So, staffing teams was noticeably more difficult in Brazil, but not prohibitive.
If you were going to advise the industry in Brazil on how they can paint a better picture to US firms, what would you say?
I actually wrote an article on this topic for InformationWeek, last year. The highlights are that Brazil needs to pursue industries where there are similarities in predominance, and to strongly push the Agile development methods.
São Paulo is the largest financial center in South America, and most of our programmers have experience with financial firms. Petrobrás is one of the largest companies oil companies in the world. There are numerous industries where Brazil has strong domestic experience, and they can parlay this into international outsourcing.
The other is the nearshore model. Because of cultural similarities and similar time zones, Brazil is an excellent way to give the sense of staff augmentation rather than offshore development.
As we have daily meetings, I actually see more of our Brazilian team members than I do of most people in my corporate office. Tight integration of teams really leads to a better product, and Brazil should push that axiom.
What was your impression of this year’s Carnival mission organized by Apex Brazil, which you attended?
Carnival was incredible, Apex organized an excellent event. It was top-notch all around. I was surprised that Carnival was so kid safe. Yes, they do have some of the elaborate costumes that are somewhat revealing, but they are not presented in a lewd manner.
Most of it was like a Macy’s Day parade times a million – I used to live in New York and have seen Macy’s Day parades. If I go again, I will actually look into bringing my family.
Source:http://itdecs.com/2011/04/qa-why-hulcher-picked-brazil-over-india-for-it/
