Global Sourcing

Use Metrics to Improve Performance While Saving Cost

Global sourcing of business application development, maintenance or support promises savings in the neighborhood of 25-40 percent. That's too significant a cost reduction for companies to ignore, but with half of all global sourced projects falling short of expectations, and cost overruns in the range of 15-57 percent of the total price tag, buyer's remorse is rampant. Reasons for these failures range from poor communication and lack of success criteria to business process misunderstandings. 

In spite of the risks, organizations continue to approach global sourcing as a solution for:

• corporate cost-reduction initiatives

  Global collaboration can be tricky. We use Compuware to point our developers in India to the exact sections of the application code that needs work. This takes the burden off of them right away, and then I know specifically what code they’re working on. Jeff Oliver, Conseco project manager

• alternate, lower-cost labor
• dwindling skilled resources
• increased competitiveness
• pressures to reduce time-to-market.

Failure or limited success can result from the difficulty in producing definitive requirements and establishing metrics to measure success. Without these basics, the potential for any expected ROI is significantly reduced. 

In short, it's essential that organizations benchmark what they're global sourcing so they can later measure and validate what they're getting back. Companies that do not employ a solid plan may end up with inaccurate cost-savings predictions, unplanned expenditures and unacceptable deliverables.

Using the methodology outlined in our Metrics-based Management solution, Compuware can assist companies in achieving the ROI they expect by giving them a way to measure - and manage - key metrics to meet expectations.