14 LESSONS FOR SUCCESSFUL TESTING OUTSOURCINGReal examples from Europe and Asia

Luís AmaralMay 20, 2016

Agenda• Context

• What is outsourcing

• Nearshoring vs Offshoring

• Lessons 1 to 14

• Bonus lesson

• Conclusions

About me• Currently:

• Independent Consultant focusing on Test Management, Quality Management and Project Management

• Vice-chair of the ISTQB® Marketing Working Group• Co-founder and member of the board of the PSTQB• Owns and runs an online business• Lives between Switzerland and Portugal

• Past:• Co-founder and director of Strongstep – Innovation in Software

Quality• Worked and lived in several European countries with in development

and management roles• Masters in Informatics Engineering from FEUP, University of Porto,

Portugal

Context• We live in a world of multiple opportunities and limited

resources

• Testing is becoming more and more a key topic

• In accordance to Tehnavio report CAGR (Compound Annual Growth Rate) is growing 10% per year in 2014 and 2015 and the trend is to accelerate in 2016-2018

Value of Software Testing in 3 years:60+ BUSD (Technavio)

80+ BUSD (IDC)

What is outsourcing• In business, outsourcing involves the contracting out of a

business process to another party

• Software Testing Outsourcing is software testing carried out by an independent company or a group of people not directly involved in the process of software development.

• In the scope of this presentation the outsourcing will be carried out by a 3rd party located in a nearby or far away country or region

Why do we outsource?• Companies primarily outsource to reduce certain costs —

such as peripheral or "non-core" business expenses, high taxes, high energy costs, excessive government regulation/mandates, production and/or labor costs.

Implications of outsourcing• Cost Management• Workforce Management• Processes• Logistics• Communication• Security• Rules and Regulations

Nearshoring vs Offshoring

Nearshoring

• Same region• Not so low or similar cost• Similar culture• Similar time-zone• Cheaper logistic costs

(travel, visa, data, …)• Less language barriers

Offshoring

• Distant location• Lower service cost• Usually a distant culture• Usually 4+ hour difference• Higher logistic costs

(travel, visa, data, …)• Possible language

barriers

Lesson 1Decide why you’re outsourcing• Start with WHY

• Your HOW and WHAT should reflect your WHY

• Look at companies like Apple (“to fight the status quo”), or Wall-Mart (“help better the community”)

• Some typical whys for testing outsourcing:• Cost management• Workforce management• Independence acceptance

• Trick: Write your why and discuss it with the team

• Pitfall: You end up doing things without a reason and rationale and after sometime with difficulties to evaluate and move forward

Lesson 2Buy well, but it has to be good for both

If you pay peanuts, you get monkeys

• You don’t want to have you’re A-players working with a team of B or C-players

• Open books policies in countries this is well accepted are usually a good way to “enforce” fairness

• Trick: Keep regular contract review rounds and re-negotiate if needed to make sure both parties are happy

• Pitfall: After sometime your best resources are taken out from your account; The delivery level decreases and the relationship deteriorates

Lesson 3It is not plug and play• Outsourcing is like any relationship

• 5 phases of any relationship• The Romance Stage Contract negotiation• The Power Struggle Stage First weeks/months, we do it on our own way• The Stability Stage We know where each of us should be• The Commitment Stage We agree on what to do• The Co-Creation We are fully in sync, we adjust when needed and there is value

every day in every moment

• Trick: Agree on a plan with your supplier and follow-up and adjust regularly

• Pitfall: You take too long to get to the last stage where value is created fast; you break up before getting to any point of stability loosing your investment and cost of opportunity

Lesson 4Communication

Lesson 4Communication“Ineffective communications is the primary contributor to project

failure one third of the time, and had a negative impact on project success more than half the time.”

“High-performing organizations create formal communications plans for nearly twice as many projects as their lower

performing counterparts”

• Trick: Write to gain trust, explain why you write; add formality first, relax afterwards

• Pitfall: Relationships degradation, money and time are spent with no value

Lesson 5Teach proactiveness• We’re all different and we’re even more different across

countries and continents

• You cannot assume anything, you have to teach everything

• Proactivness is easy to teach, but difficult to implement

• Trick: Use checklists

• Pitfall: wrong expectations; work does not get done

Lesson 6Build know-how

The CFO asks:What if we train all the people and then they leave us?

The CEO repliesWhat if we don’t train them and they stay?

• Know-how together with trust are maybe the 2 most important building blocks of an outsourcing relationship

• Trick: Plan training• Onsite, offsite and remote• Specialist and Management• Behaviors and culture

• Pitfall: The team won’t perform; wrong expectations

Lesson 7Logistics matter

“Where is my tester?”“The test manager does not pick the phone!”

“The team cannot access the system, but I can, can’t you fix it fast?”

• Logistics and logistic costs have to be careful thought• Space and Time• Communications• Systems

• Pitfalls: If logistics are not in place, time will pass, money will be spent and no results will be achieved

Lesson 8Care about people• We’re all equal!

• Your outsourcer resources are your resources, they work for you, do do the work you request them to do, the validate your solution

• Trick: Involve all your resources in the same activities when possible, events, dinners, communication

• Pitfall: People need to be loved produce great work, your outsourcers work quality and productivity will decrease and you’ll suffer

Lesson 9Onshore and nearshore/offshore mix• It is easier to work with your colleague who sits in the desk by

your side than with someone who sits thousands of KM away, speaks a different language and has a different culture

• Ensure there is a local connection to your outsourcer at all times (when possible)

• Trick: Having a local manager or account manager at your site (ideally with a small rotating team) should be part of your contract

• Pitfall: Even with all means of communication we have, tools and easy access to people it can happen that the needed work is not being done

Lesson 10Measure and control

What can’t be measured, can be managed

• Measure can be easy, tools can help

• Create a simple scorecard (ideally automatically generated) that runs regularly (daily, weekly) and discuss it with your counterparts; adjust as needed

• Trick: Measure for both sides comfort, use any tools from MS XL to fully automated report generating tools

• Pitfall: If you don’t manage you only have a feeling of what’s happening and when you really notice what’s happening it might be too late to steer back (without high costs)

Lesson 11Quality matters• When we talk about testing, quality matters (actually,

quality always matters!

• Quality is reflected not only in the results but as well as on path to get there

• Trick: Measure quality as well

• Pitfall: You loose trust in your testing team and on the testing results

Lesson 12Processes and procedures• A process avoids discussion on how to execute something

(maybe even if it is wrong!)

• Processes are live documents, they are never final and there is always place for improvement

• Trick: Document as you go, when you need a new process or procedure document it, you don’t need to do all in day 1; Decide what to document according to the maturity of your supplier

• Pitfall: In certain regions there is a high rotation of the workforce, if you don’t have all documented, you’ll be always starting

Lesson 13Tools• We live in the world of (IT) tools, there is one for everything

• You don’t need a Ferrari to walk for 10 meters

• Use a good toolset to keep all documentation, this is a must

• Trick: Use the tools rationally, if an XL does the job do not over complicate

• Pitfall: You don’t want to be caught in the middle of something you don’t know what it is

Lesson 14Automate• Automate everything (when possible)!

• Automate testing, automate the processes, automate the reports, …

• Trick: Sell automation as door to open new projects, and new resources

• Pitfall: Your cost of opportunity is high when you don’t automate, you can do the same with less, do more with the same or even do more with less

Bonus lesson!

Bonus lessonInsource or change to another outsourcer• If you followed some of the lessons it will be easier (it is

never easy)

• Don’t be afraid of doing this, but don’t take a blind leap

• Trick: Know your reasons, start with the WHY

• Pitfall: There will be an investment, but if you’ve done this once you know your process

Conclusions• Start with the WHY

• Great when it works

• There is an investment needed

• It can “ruin“ your business if you don’t control

Thank You!

luis.amaral@acm.org