Your enterprise resource planning (ERP) software is developed in India; your web site is hosted in China; and your help desk calls are answered in Costa Rica. Despite language barriers and related problems, offshoring can provide significant benefits in terms of increased productivity and reduced wages—a tough "1-2 punch" that is difficult to ignore or explain away. So why not also consider off-shore or remote implementation of software?
This article looks at several reasons why remote implementation can make logical and fiscal sense for US-based companies. Applicability for other countries will depend greatly on their wage scale and currency evaluation. The remote implementation alternative versus the on-site approach may not be for everyone; some organizations may feel uncomfortable with an implementation team located 1,000 miles away. However, you should seriously evaluate a remote implementation scenario to determine its applicability to your software project and its potential impact on your project's budget and timeline. A software vendor, who can offer a choice between remote and on-site implementation, may be the tie-breaker in a competitive situation.
Cost savings is the most obvious and easiest reason for justifying remote implementations. Typically, the cost of labor in off-shore locations is significantly less than that at your location. Consequently, professional services for such activities as business integration, design walk-thrus, configuration planning, and gap analysis can be performed at much lower costs remotely than on-site. In addition, living and commutation expense will be virtually non-existent.
Most software vendors estimate that, for every dollar spent on software, a company can expect to spend three to four dollars on implementation services. In a remote implementation scenario, this ratio is likely to be an amazingly low one for one: one dollar for services for every dollar of software. That is an impressive 60 percent savings and difficult to walk away from without close scrutiny.
Single-Sourced, One-Stop Servicing
There are times when it pays to have all of your eggs in one basket or, at least, in one location. Remote implementation may be one of those times.
Typically, when an on-site consultant finds a problem, there will be a couple of hours or days playing phone tag with the developers. Then, it often takes more time finding and rounding up the right group of technical resources. Now, we're ready to discuss the problem.
The advantage of a remote implementation is that is that the consultant has immediate, real-time, person-to-person access to the technicians and developers who can look underneath the hood and inspect the code. This is the concept of single-sourced, one-stop servicing that is more readily available with a remote implementation scenario. However, there is a catch or qualification.
This type of servicing is viable only when the remote location houses both the technical know-how and the business consultants who have gained insight into your environment. So, the first assumption is that the business analyst has spent a certain amount of time on-site understanding your workflows and processes, special requirements, and, overall, how you want to do business going forward. A remote implementation does not mean a complete lack of an on-site presence, but rather one where this presence is significantly reduced and more effectively utilized.
Secondly and more important, co-location of technical and business analysis resources means that all experts are available to work on your implementation at the same place, at the same time, looking at the same information. Having a software vendor's consultant at one location and a third- party development center in another continent is not remote implementation. It is simply a foolish attempt to save money by using cheaper labor pool. This is the classic "wolf in sheep's clothing" rouse.
True remote implementation savings can only be realized and project hours reduced when the implementation experts—the designers, developers, and analysts, have the opportunity to work side-by-side to solve your problems and successfully configure the software. Obviously, this can be more readily and effectively accomplished when these resources belong to the same organization.
In many implementation projects, you may have to wait on gaining familiarity with the software until you have the hardware configured or installed. In remote implementations this should not be the case. The initial load and configuration of the software can be done off-shore on the vendor's hardware. Familiarity and testing of the software can be achieved with the advantage of high-speed Internet access. As a result, your organization may be able to avail itself of end-of-quarter or end-of-year discounts on hardware, further reducing the total cost of the project. Regardless of the path you take, you have the flexibility to make hardware decision based on your timetable and not that of project's timeline, and the completion of the project should not be affected.
Efficiency and Effectiveness
With remote implementations your organization can use its own personnel more efficiency and effectively. Consider this the band-aid rationale. As any self-respecting hypochondriac knows, the best way to remove a band-aid is to rip it off—momentary inconvenience followed by relief. This analogy can be applied to implementations if done remotely. For a short but intense period of time, your resources are dedicated to the project to complete such activities as as is, to be, and gap analyses. Upon completion, the vendor's consultant or business analyst takes the collected and analyzed information to the remote development center where the software is tailored to your business conditions and environment.
Why does this work better for a remote implementation? Due to the close proximity of the business analyst working with the developers, typically side-by-side, the chances of misunderstanding or misinterpreting the business requirements are significantly reduced, if not totally eliminated. Just as a picture is worth a thousand words, a narrative description with a verbal give-and-take to supplement workflows will usually result in the software being configured correctly the first time rather than through a trial and error process. Likewise, testing will be completed by the developers with the business analyst hovering over their shoulders. If necessary, previews of the software can be provided to your personnel via webcasts and the Internet. Again, this method makes efficient and effective use of your valuable resources
When a business analyst returns to your location, hopefully amid fanfare and rejoicing, your personnel need only confirm that what was requested was exactly what was done.
Even with the above reasons and rationale, remote implementations may be still met with a healthy amount of skepticism. Phrases like "We have never done it that way before" or "How can we work with someone thousands of miles away?" will be whispered in the hallways and around the coffee machine. There is nothing to say that, after starting a remote implementation, you cannot change course and revert to a more traditional implementation approach.
The safety net or fallback contingency for a remote implementation is that you lean on the old fashioned way, namely on-site. While there may be some slippage in the project schedule, your costs will be no greater than estimating an on-site implementation in the first place. So, if your organization is open to new ideas and approaches, a remote implementation may be appealing. You should, however, document the caveat, particularly with senior management, that an on-site implementation is your contingency if your organizational assessment is a bit askew.
Hopefully, you can appreciate the merits of a remote implementation of software that typically go well beyond cost savings. Better utilization of your staff, greater flexibility in decision-making, and increased productivity through the co-location of vendor resources are equally appealing. If you feel that your organization can literally work outside of the box and wants to reduce project costs and time, remote implementations may be your ticket.
The critical success factors for remote implementations include
Having your personnel available to work on an implementation when and as needed is important to any project. However, for a remote implementation the criticality of this factor is accentuated. While part of the cost savings of a remote implementation is achieved through the measured and controlled participation of the vendor's consulting staff, maximum use must be made when these resources are on-site.
The remote implementation certainly shifts the paradigm and replaces more traditional approaches. Accordingly, the project team and users must be flexible and comfortable with trying different methodologies and effectively using technology. For example, webcasts used to replace or supplement classroom training; high-speed access to your configured software on the vendor's hardware to complete testing.
Proximity and Cooperation
The key to an effective and successful remote implementation project is the tight interaction between (1) the project team, that understands the business requirements; (2) the consultant, who translates these requirements into software terms; and (3) the developers, who build the bridges to ensure the software satisfies the needs of the business. Frequent access and sharing of information among these groups is critical. The proximity of these resources, particularly between the consultants and developers, and a spirit of cooperation are essential.
Typically, in an on-site implementation the vendor's project team is assembled from available resources to provide adequate and detailed software knowledge. As such, consultants will spend as much time learning to work among themselves as with the client. Conversely, in a remote implementation, the project team is much smaller. As a result, a close and familiar working relationship is repeatedly reinforced while working remotely.
At times, stretching the safety tether by working remotely can place a strain on an organization. Organizationally, you need to realize that these minor and temporary "inconveniences" are realizing tremendous savings. This fact needs to be stressed repeatedly within the project team and the company. This is where executive sponsors can provide immeasurable assistance.
About the Author
Joseph J. Strub has extensive experience as a senior project manager for the planning and executing ERP projects for manufacturing and distribution systems for large to medium-size companies in the retail, food and beverage, chemical, and CPG process industries. Additionally, Strub was a consultant and Information Systems Auditor with PricewaterhouseCoopers and an applications development and support manager for Fortune 100 companies. Currently, he is a senior consultant for 3i Infotech.
He can be reached at Joe.Strub@3i-Infotech.com.