| Introduction | | | | benchmarking current performance thoroughly and |
| The recent sharp downturn in the economy is forcing | | | | prepare detail business case to ensure that the |
| independent software vendors to reconsider their | | | | provider delivers a tangible return on investment |
| approach towards product engineering. In light of the | | | | - Do not focus only on cost reduction. Take a strategic |
| new business realities, companies are forced to | | | | view of the engagement and select a partner rather |
| consider how they can reduce their R&D budget, | | | | than a vendor. This will ensure that you gain other |
| or get higher return on the same or incremental | | | | tangible and intangible benefits |
| investments. However, it is becoming increasingly | | | | - Give proper importance to outsourcing location. |
| important for ISVs to enhance customer loyalty and | | | | Evaluate parameters such as past history, availability |
| reduce support cost! ISVs are realizing that one way | | | | of skilled manpower, language capability, political |
| to achieve this is by improving the quality of the | | | | stability, stable economy, etc., along with cost |
| product without increasing the cost of quality. | | | | structures |
| Consequently, ISVs are actively considering | | | | Outsourcing Benefit |
| outsourcing non-core functions like testing to cut costs | | | | Cost savings, though a major result, is not the only |
| quickly, avoid new capital investment, and improve | | | | benefit of outsourced product testing. Benefits from an |
| product quality. | | | | outsourced product testing initiative become more |
| Why Outsource Product Testing | | | | significant when combined with a global delivery model |
| Testing is a vital phase in any product development | | | | and right-sourcing model. In addition, companies that |
| initiative. Frequently changing requirements coupled with | | | | have already out sourced their product development |
| a reduced product development life cycle has | | | | process will be benefited by using an independent third |
| increased the pressure on testing teams to do more | | | | party for testing. Here the testing partner works as a |
| at less. They face time crunch as well as resource | | | | certifying authority, providing unbiased insights into |
| crunch. A survey conducted by the National Institute of | | | | improving product quality. Following are the benefits |
| Standards and Technology (NIST) has found that US | | | | that come out as a result of a successful outsourced |
| companies spend as much as $60 billion on fixing | | | | product testing initiative. |
| software defects at the post-release stage. This | | | | - Higher return on QA investment: ROI of a product |
| study also reveals that third party QA & Testing | | | | quality initiative includes the savings occurred due to |
| could have saved companies nearly $20 billion. The | | | | decreased rework, increased customer satisfaction, |
| direct cost of quality in terms of staff time by itself is a | | | | lower support costs, and decreased product |
| compelling reason for considering QA & Testing | | | | maintenance cost. An outsourced product testing |
| outsourcing model. Though it is difficult to measure, the | | | | program, if executed successfully using an offshore/ |
| loss of revenue in terms of repeat business, due to | | | | dual-shore model, not only lowers the cost of testing |
| unhappy customers, is also significant. A well | | | | by reducing staff cost, but also helps to increase |
| structured outsourcing model can help ISVs reduce | | | | product quality. A company can save up to 40% in |
| cost (by using less expensive resources) and increase | | | | direct staff cost and another 10-20% in associated |
| the quality of the product, which ultimately results in | | | | costs through outsourcing model. |
| satisfied customers. Migrating to an outsourced | | | | - Shorter Revenue Realization Cycle: Outsourced |
| product testing model, where the onus of product | | | | product testing can help reduce time to market with |
| quality is shared with the participating testing company, | | | | the usage of additional skilled resources and test |
| will give product companies a competitive advantage | | | | automation. This helps the company to reach market |
| in the marketplace. | | | | faster and protect/create competitive advantage. |
| Current Situation - However, as per a Forrester report | | | | Hence, outsourced product testing initiative helps |
| published in 2008, despite the enormous potential | | | | companies shorten their revenue realization cycle, |
| benefits of outsourcing, not many organizations | | | | which means they can achieve more with less capital |
| currently outsource their testing activities. According to | | | | or invest the free resources in growth related |
| a survey of IT leaders, only 16% of organizations | | | | initiatives. |
| outsource software testing while 16% expect to | | | | - Improved Efficiency: If properly planned, a well |
| outsource to a third party in the next 12 months. | | | | defined outsourced testing engagement can bring |
| Though another 29% were considering using a third | | | | improvements in quality and delivery processes. |
| party for this service, a substantial 39% were not in | | | | Outsourcing engagements are governed by defined |
| favour of using this service. While this is one side of | | | | Performance Metrics (PM) and Service Level |
| the story, the outsourced testing market is actually | | | | Agreements (SLA). Outsourced testing service |
| experiencing a rapid growth, and according to the | | | | providers have formal and proven testing |
| same Forrester report, outsourced testing services is | | | | methodologies rather than heuristic or experiential |
| growing at 50% annually or higher. There is a growing | | | | techniques to identify, generate, and execute test |
| awareness that software product testing is a | | | | cases. These formal methodologies provide for |
| specialized skill, and cannot be accomplished merely by | | | | enhanced coverage and defect identification resulting |
| any developer. But it is becoming increasingly difficult | | | | in an improvement in product quality. Clients can benefit |
| for CTOs to allocate enough funds to hire expert | | | | from working with outsourced testing companies by |
| resources, or train the existing resources to meet the | | | | sharing best practices and investing in process |
| demand. As a consequence, product quality is | | | | improvement initiatives. |
| increasingly being compromised. | | | | - Flexible Scale: The testing lifecycle is characterized |
| Offshore outsourcing | | | | by staffing peaks and troughs. Managing this variation |
| Though ISVs are slowly getting convinced about the | | | | of utilization becomes a challenge for in-house testing |
| benefit of outsourcing their QA activities to offshore | | | | departments. This always results in either lower |
| partners, in most of the cases they merely treat this | | | | utilization (higher cost) or non availability of skilled |
| as a cost saving measure. Offshore outsourcing of | | | | resourced when required most. But in an outsourced |
| product testing, if treated strategically, can yield more | | | | product testing scenario, managing the ebb and flow of |
| than just cost benefit. However, treating offshoring as | | | | resources becomes the responsibility of the testing |
| process of simply moving existing software product | | | | partner. Hence, outsourced product testing provides a |
| testing to an offshore outsource partner may be | | | | much needed degree of flexibility to the client |
| counter-productive. Executives making the decision to | | | | Organisation, and allows them to focus on product |
| offshore testing must draw the strategic plan for | | | | design and development activities. |
| outsourcing, define their goal, and last but not the least, | | | | - Independence and Insight: Good software |
| must understand the possible pitfalls of outsourcing. | | | | development practice calls for separating the |
| This will enable them gain maximum from their | | | | development team from the testing team. The primary |
| outsourcing initiative. | | | | purpose behind this separation is to provide an |
| Challenges Faced in Outsourced Product Testing | | | | unbiased view of the product quality. In many cases, |
| Activities | | | | these checks and balances are compromised due to |
| We all know that product development, being a more | | | | constraints like product release pressure, same team |
| intense & involved process, differs from | | | | working for both development and testing, absence of |
| application development. Similar is the case of product | | | | any proper certification process, etc. Outsourced |
| testing. Hence, outsourced product testing comes with | | | | product testing brings a certain degree of |
| its own set of challenges. Some of the major | | | | independence, leading to greater visibility of product |
| challenges faced in outsourced product testing are: | | | | quality issues. This unbiased and independent insight |
| - Partner integration: Success of an outsourced | | | | helps the product management team to make more |
| product testing initiative is based on the integration of | | | | informed business decisions on product release |
| methodology, usage of proper tools & | | | | schedule and product quality. |
| technologies, and a right-sourcing approach. It is easier | | | | In a distributed development scenario, when product |
| said than done. And is normally is the primary reason | | | | development is outsourced, an outsourced testing |
| for failure of such initiatives. | | | | team becomes even more valuable. The outsourced |
| - Proper communications management: Due to | | | | test team serves as the certification authority, |
| language and cultural barriers, time-zone difference, | | | | providing for an unbiased third view, which is |
| physical distance, and poor processes, many times it | | | | independent from client's Organization and the |
| becomes difficult to have an effective communication | | | | outsourced development Organization. This evaluation |
| process. | | | | is more objective as it is delivered independent of two |
| - Mismatched or miscommunication of expectations: | | | | reference points. |
| Absence of a well-defined goal and an ineffective | | | | Conclusion |
| oversight process, along with poor communication, can | | | | Outsourced Product Testing is not a new idea - |
| create difference in expectations | | | | current economic situation has made it more |
| - Lack of product engineering focus: Most of the | | | | appropriate and attractive. Over a period of time, the |
| offshore vendors are application service providers. | | | | process also has become mature and you have more |
| Hence, they do not have the required expertise or | | | | offerings available from service providers. The current |
| more importantly, the necessary product mindset to | | | | economy, customer's intolerance towards product |
| test a product | | | | quality issues, and new competitions are leading more |
| - Management issues due to the lack of a workable | | | | product companies to adopt the outsourced product |
| test management process and associated | | | | testing initiative. Outsourced testing service providers, |
| methodology | | | | who compete with one another and whose core |
| - Vendor problems or vendor infrastructure problems | | | | business is to provide these services, have also made |
| such as poor data bandwidth. | | | | an investment to go up the value chain by developing |
| - IPR protection concerns | | | | reusable IP in the form of automated testing |
| Overcoming the Challenges | | | | frameworks and employing the necessary skilled |
| Many of the barriers associated with Outsourced | | | | resources to serve customers and maintain their |
| Product Testing activities, as mentioned above, can be | | | | competitive edge. These service providers have |
| overcome by selecting an experienced and reliable | | | | become more efficient over a period of time, and |
| testing partner with requisite product engineering | | | | offer services faster, better and more cost-effectively |
| expertise, quality orientation, structured processes, | | | | compared to an in-house function. |
| proven credentials, and an impeccable record on | | | | The current recessionary state is opening up a |
| protecting its customer's IP. This will ensure that | | | | strategic option for leaders: free up scarce cash for |
| product engineering principles are in use and best | | | | deployment elsewhere to focus on core capabilities. |
| practices are consistently applied. Cost advantages | | | | We see a greater flexibility in offerings from |
| are achieved through various means such as - | | | | outsourced test service providers, and an overall |
| optimization of the testing process, test automation, | | | | increased receptiveness to outsourcing in general by |
| leveraging low-cost test centres. When successfully | | | | Organizations. Globalization (aka flattening of the world) |
| planned and executed, outsourced product testing can | | | | has also resulted in product companies seeking new |
| reduce the overall product engineering cost by 40% or | | | | ways of doing business, learning new techniques, |
| more, as well as shortening the time to market and | | | | optimizing the software manufacturing process, and |
| improve overall software quality. But to ensure the | | | | making funds available for global initiatives. This makes |
| best possible results from product testing outsourcing | | | | the business case for outsourced product testing |
| initiative, you must: | | | | more appealing as it enables organizations to free up |
| - Hire specialist companies to conduct product testing, | | | | both its cash and critical resources and have a partner |
| These companies should have strong background and | | | | care for its quality. Outsourced product testing offers a |
| proven track record in providing Product Engineering | | | | strategic option to ISVs to be prepared to scale new |
| Services | | | | heights when market conditions improve. |
| - Plan the process thoroughly. Invest time upfront in | | | | |