A world of difference

Home of the Samara State Aerospace University, the Russian city of Samara is a major scientific and educational centre on the river Volga, with a large pool of programming talent

Minicab company Addison Lee makes no secret of its commitment to using technology to accelerate business improvements. On the company web site, chairman John Griffin praises its IT director Peter Ingram for managing “some of the most radical technological changes in the transport industry”.

The firm’s ability to innovate is helped to a large degree by an offshore team of software developers based in Samara, Russia.

Outsourcing partner Haulmont Technology is able to draw on an enviable pool of talent as Samara is a major educational and scientific centre of the Volga area and home of the Samara State Aerospace University.

“Samara is a very technological area with lots of universities and resources. The Russian developers are not only intelligent, they also challenge what we do so they have become more involved in how the business operates as they make us think about why we do something a particular way, leading to improvements,” says Ingram.

The developers, who work on projects related to the Addison Lee booking platform, such as scheduling drivers to the correct job and tracking systems, can cost a lot less to employ than their British counterparts.

“They are bloody hard working and are appreciative of the opportunities offered by working on our projects. The cost of living in Russia is lower than the UK, so they are a lot less expensive to use than British developers,” says Ingram.

Many IT leaders still look to India when considering offshore software development. Ingram, however, was curious to know whether Russia would offer a better service, so he set a test to compare the two countries.

“It was a small project to reproduce a mapping application in .Net,” says Ingram. “Setting a test is a great way of deciding which offshoring location works best for you. Salesmen will promise the world, but you need to find out how your offshore partner will perform. We preferred the Russian developers’ approach. The Indian developers were eager to please, but did not deliver,” says Ingram.

One of the problems associated with offshoring is that distance and cultural differences can lead to communication problems.

“You do have to have a face-to-face relationship with your offshore outsourcing partner. We have been on visits to Russia and had beers with the guys. You don’t have to do that, but we want the offshore team to feel they are key to our business and we reward them with bonuses when certain targets have been achieved. It is part of the loyalty-building process,” says Ingram.

Addison Lee has attempted to minimise the difficulties of communicating across long distances and cultures by establishing joint working groups. “When a Russian developer is asked to do something, they will go away and deal with it tirelessly. But their responses may seem abrupt at first when you are used to the niceties in conversations,” says Ingram.

All the Russian developers have good English, and channels of communication are maintained around the clock.

“You can’t rely on one method to communicate. The Russian developers have home broadband and we have their home and mobile numbers so we can use email, Skype and the phone –­ all the tools available,” says Ingram.

The nature of Addison Lee’s work means that 24-hour operations are essential, as is support. That accentuates the difficulty of working across time zones, and specific provisions were built into the service level agreement (SLA) “so that we can make real-time fixes to any bugs”, says Ingram.

The enterprise architecture means that an application can be rolled back to an old version while the offshore team fixes bugs in the new version of the software.

“We are constantly flip-flopping between the old and new versions as our deployment and testing of new applications and technological improvements is like a conveyor belt. With an innovative IT strategy, it’s important how you design your architecture or you run the risk of getting stuck down a cul-de-sac, which is the last thing you want when your development team is offshore,” says Ingram.

In recent months, the security and financial risks of offshoring have come to the fore, but Ingram believes that problems can be avoided through painstaking due diligence.

“Parts of Russia might have a certain reputation. Some people say you need a bodyguard if you go to Moscow, but security there is as good as anywhere else in the world. We have done our due diligence, met the guys and checked that they did not have a dodgy rented office, but were based in an office block with key-code entry,” says Ingram.

He believes any offshoring arrangement relies on an element of trust, but that if thorough tests and sensible security precautions are undertaken, there should be little cause for concern.

“There is absolutely no reason why security fears should prevent a sensible business decision to offshore. Our partnership is a marriage ­ – we have good days and bad days,” says Ingram.

If offshoring is like a marriage, it is one that should be based on a rigid pre-nuptial agreement.

“The source code is our intellectual property and is held in escrow and updated every day. If Russia stopped all communication with the West, we are safe in the knowledge that we have a full backup of the source code and would not be ruined as I could support applications here by hiring a lot of Java developers. The agreement also stipulates that if Haulmont wanted to work with another taxi firm, it would have to ask us first,” says Ingram.

Providing business leaders understand what they are looking to offshore, and understand the management overheads that are necessarily involved, this is one long-distance relationship that really can work, says Ingram.

“If you bring in the right people to meet your technological challenge and consult thoroughly, then offshoring can be a fantastic solution,” he says.

Read our case studies of Edge IPK and Unibet

The third part of our definitive guide to offshore outsourcing looks at both the skills available from providers and those required to manage an outsourcing relationship