Planning to Outsource Testing: OSTC or OSDC

Outsourcing testing services to outside vendors (we call them extended partners these days) is not a new phenomenon. There are many Offshore Software Testing companies (OSTC) exclusively focusing on testing services, such as AppLabs (acquired by CSC) , NeuSoft etc. Sensing the potential of exponential growth, major Offshore Software Development Companies (OSDC)  are also offering, testing services such as Impetus, Globallogic, Symphony, and Persistent etc.

It is understood that outsourcing the testing will speed up the testing, improve quality, reduce project cost, and lets you focus on business. But when it comes to selecting an outsourced business partner, it becomes difficult to make a choice between OSTC and OSDC offering testing services.

OSDC should be prefered if you have vision to outsource the complete or partial software development in future. There are instances where few customers outsourced the Development and Testing contracts to OSDC and OSTC companies respectively. Usually this happens when a customer has already outsourced testing to some OSTC and now planning to oursource the product development.  Viceversa, if OSDC does not have appropriate capability to provide the testing, customer involves OSTC for testing services. Though OSDC-OSTC collaboration model is also successful, however in such cases ownership and coordination become a big challenge.

Only deterent to go with OSDC is they are more focussed in Software development , hence you need to check their References, Testing infrastructure, Talent pool, Ramp-up capacity, Testing  and Tools expertise, Attrition of testing talent. It is good to look if they have a Testing Center of excellance.

OSTC are usually keeping watch on current Software testing trends and usually acquire required Talent. They invest a lot in research and has right mindset as well as sytem to carry out quality testing.  OSDC has Testing Center of Excellance to serve while in cases of OSTC, the entire company it self become Testing center of Excellence.

Do you think that OSDC should be prefered over OSTC because if required they have software development capabilities. Looking forward to hear your opinions.

Increasing profitability by converting Billing loss into profit

During the scheduling and scoping of a Time and Material (T&M) testing project, considering the leaves and holiday plans, at first place it is not unusual that the Managers think to negotiate the testing scope. Revising scope is necessary to ensure the closing the testing before the Release date communicated by stakeholders. However, this would let some bugs escaping to the Production. Another plan is to put extra efforts to ensure we cover planned testing before release date without compromising. However these extra efforts usually end up in discounts and converted to billing loss.

Usually a team member is supposed to work 8.5 hours a day. Hence a billing cap i.e. maximum billable hours = 8.5 x working days in the month, for a team member. Assume if there are 22 working days, then billing cap will be 187 hours.

Consider a project which starts in January and its first phase will be rolled out in March end. A team member “X” has two planned leaves in the last week of February. As it happens in the projects that more efforts are put in the later phases of the project, to ensure the timely release member “X” also puts extra efforts in month of March i.e. he puts 16 hours of efforts extra.

X has put in 187, 170, and 204 hours in January, February, and March respectively. So there is a billing loss of 16 hours in February and there is a discount of 17 hours to client. However Clients does not prefer to have such discounts as major efforts in the last moment may bring uncertainty and anxiety.

In another similar case, member “Y” has also planned leaves in last week of February. He started putting extra efforts as per his comfort, from the first week of February and adds 16 hours of extra efforts in the month February. In other words the extra efforts “Y” would have to put in March, he put in February.

Y has put in 187, 187, and 187 hours in January, February, and March respectively. He saved 16 hours of billing loss in February. Client is also happy as he got rid of last moment surprises. In cases of adhoc leaves, if possible “Y” should put extra efforts in the current month to reduce the billing loss.

Usually every team member gets >18 holidays in a year. With better leave and efforts planning, if you could save 5 days billing loss per person a year i.e. 42.5 hours per person a year then number multiply by the size of team, will make a considerable impact on profitability. By the same time, team will be able to deliver to the customer as per the agreed plans.

Image

This concept of saving is also applicable in Non T&M projects. Here the target is to identify and plan the Extra Effort to be invested to ensure the Productivity, Quality deliveries, Maximum value for the money to the customer, Minimum billing loss and increase the Profitability of team/company.

I advise that

  1. Customers should be aligned on this model.
  2. Teams should also get the share of this profit.
  3. Teams should be educated and enrolled to understand this model.
  4. Teams should not be denied leaves.
  5. Teams need to plan their leaves in advance though they can take leave on demand.

I never recommend reducing the billing loss by hiding the leaves of the team members. It is better to lose the profit than trust and credibility. . What are your views on this? Do share your experience.