When the CIO for a ticketing services company heard from his CEO that they were going to scrap plans to get work done by a big-name firm in
Paciolan competes with Ticketmaster, but with a different approach. Whereas Ticketmaster, the gorilla of the box office, typically takes over all operations of ticketing, then shares a portion of revenues with the venue, Paciolan offers reservation functionality in a self-service model. The college basketball, professional baseball, hockey, museum and performing arts centers box offices that make up the bulk of its clients license access to the software modules they want and then set up their own ticketing operations, paying a fee to Paciolan for each aspect of the service they use in their environment.
Three key factors drove the company to look outside its own IT organization for help, according to CIO Patrick Wilson. ÒThe first was our ability to scale. We\’re in a situation internally where we\’re trying to build out — rebuild an existing product, on a new technology platform. We needed the ability to scale with resources, much more effectively than we had in the past. The second key thing that we were looking to do was enhance or increase our efficiencies and quality of building products, which we were hoping to get through an offshore partner. The third was cost.Ó
The major project involves moving from a 20-plus-year-old character-based product, called Universe, which runs on IBM\’s Unix operating system, AIX, to a Sun Microsystems J2EE Web-based platform running on Linux, using IBM\’s WebSphere as the application server and DB2 as the database. As
Only about half of the 50-person internal IT team is conversant with the new set of tools and technologies. Of the other half, a couple of have been cross-trained on the platform, but that was taking place at a Òlow volume, low riskÓ pace.
Paciolan\’s only previous experience with IT outsourcing was with a US-based firm that handled quality assurance and testing.
–> TIP #1. Be ready to walk away from months of effort when a new idea comes along.
That inexperience biased the CIO toward going with an India-based service provider. ÒI was more inclined to [work] a much larger organization — an India-based organization that had been there and done that, because we didn\’t have the in house expertise,Ó said Wilson. ÒWe were looking for a larger partner that could bring a lot to the table.Ó
That drove the selection process for his team. They\’d gone through a formal request for information and request for proposal with six Indian firms. Of those, they\’d selected two to go through due diligence with. They were even scheduled to visit the two companies in
Then a Paciolan board member who was a venture capitalist suggested the company look at working with Objectiva Software Solutions, a service provider with its primary technical operations in
That suggestion led then-Paciolan CEO John Hnanicek to postpone the selection process, generating dissatisfaction among the IT team in charge of the effort.
ÒWe\’d spent six months making a decision and we were ready to start to execute against that decision, and now we were stopping again to go reevaluate,Ó recalls
–> TIP #2. Fast-track due diligence is a reasonable route to vendor selection when you really understand what the key factors are for your project.
Those six months of vendor evaluation wasn\’t a total waste for Wilson and his selection team. It enabled them to home in on the key things they wanted to accomplish with their partner.
Satisfied, the Paciolan team interviewed a series of Objectiva client references. Then they went to
Eventually, an agreement was struck. Paciolan retained the right to pick resources. Objectiva offered a Òvery effective pricing structureÓ vs. what [the client] was seeing from the Indian companies. And the service provider went about demonstrating through a pilot project how committed it was to working with the client.
–> TIP #3. A pilot project needs to be substantial enough to give you a solid sense of what it will be like to work with the service provider long-term.
Paciolan\’s pilot started around the end of February 2005 and lasted until August — about six months. Two Objectiva staff members came from
According to Pete Hallock, a senior engineer at Paciolan, the pilot was to evaluate how well the Objectiva team could understand the application logic, how quickly they could come up to speed and deliver against task.
Paciolan had a lot of tasks to complete, so it picked a small subset of the list for the
–> Tip #4. Use the pilot project to evaluate other aspects of the company too.
Since Paciolan expected to need about 50 people, one area of concern was how well Objectiva could scale. That required Hallock to travel to
During that visit Hallock evaluated Objectiva\’s security procedures as well as its network set up.
–> TIP #5. Expect to run into problems during the pilot. That\’s what it\’s for.
In the case of Paciolan, Hallock reported network latency issues between the two sites. Objectiva immediately set up a Sprint backbone line as a direct link between the two companies with a private VPN to resolve the weakness. As Hallock explained, ÒThey\’re a growing company… They had too many people on their network, so they upgraded the network.Ó
At the end of the pilot project, he said, ÒThey had met our expectations. So we moved forward.Ó
–> TIP #6. An optimal offshoring structure involves domestic staff and offshore staff.
Objectiva has a technical director, Fred Nicholson, based in the
Another Objectiva person — Jeanne Beyer — is involved from a staffing standpoint. And Tao Ye, president and COO of Objectiva
–> TIP #7. The more senior the personnel, the better their English skills should be.
Objectiva keeps an English teacher on staff to train the more senior people to learn English. Hallock said that usually once a week, during work hours, these people attend English class for an hour.
Although writing skills — particularly through email and instant messenger — tend to be uniformly good, Hallock found that among Òintermediate developers — some of the guys who aren\’t expected to do as much technical discussion and technical writing — their English skills aren\’t fluent, but they\’re decent.Ó
In the course of interviewing prospective new hires, he performed the interviews in English with an interpreter at this side. Out of interviews for 14 positions, the interpreter Òprobably got involved one or two times to make sure they understood the question.Ó
–> TIP #8. Steady state means internalizing the offshore team as much as possible into ordinary operations.
Paciolan currently has five resources internally dedicated to the project and 10 in
Eventually, the entire project will involve a series of teams structured around functional areas. Each functional area will build a part of the product suite. For example, one module is a Web-based sales channel solution, which provides the tools that allow end users to go to the Web site and purchase tickets. All aspects of that module — registering, managing an account, buying tickets — would be handled by a single functional team.
The goal is to have a cross-functional, cross-continent organization.
From the Paciolan side, each team will have a senior engineer leading it; a business analyst to do functional design and interfacing with the client; a user interface design person; and one or two quality assurance analysts. Paciolan\’s people will retain UI design, application architecture, testing, and other client-facing activities. Objectiva will handle the Òactual manufacturing, the engineering,Ó said Hallock. The core development team will be in
In total, each team will have about 10 people, though several will work on multiple teams. About 25 people will be US-based and 50 or more will be in
–> TIP #9. Managing the offshore process is a daily endeavor.
Hallock said he and Objectiva\’s onsite coordinator have a daily call with the
At the end of each workday in
As the project expands and more people are added, the same structure will be followed.
Person to person contact also goes on. Through their US visits (seven of 14 Objectiva team members have been to the US for extended periods), China team members know who to contact on the development and business analyst staffs in the US to answer particular kinds of questions. So they use email, as well as Skype for voice over IP phone conversations.
Hallock considers the scheduled conversations a vital key to the project\’s success. ÒIt\’s a little more organic when everybody\’s local. You can walk over to the guy\’s desk, ask him a question. You send him an email, you talk in the hall. When it\’s a team that\’s offshore, you have to schedule some time every day to make sure everybody\’s talking to each other.Ó
–> TIP #10. Expect the offshore team to show more consistency in their results. But don\’t interpret that to mean you can eliminate the onshore team.
The advantage the offshore team enjoys is that it doesn\’t get distracted. ÒThey\’re not doing anything but what they\’re supposed to be doing,Ó Hallock said. The onshore team, he pointed out, is Ògetting pulled for production support; someone\’s asking them, ÔCan you check this out? It\’s not working.\’ The people onshore have a hard time staying totally focused on the given tasks, because there are so many factors when you\’re here and the whole rest of the company is here.Ó
–> TIP #11. Don\’t underestimate the amount of training your offshore people will need.
That means Paciolan is constantly helping them to understand the Òvocabulary of the ticketing business,Ó said
–> TIP #12. Even a fixed price agreement needs flexibility built in.
–> TIP #13. How do you know you\’re in a true partnership? The signs are pretty obvious.
Ultimately, he said, ÒTo a certain degree, as you sit down and look at it, our failure or success is going to be based on the relationship we have with them, and our ability to work with them and manage that relationship.Ó
Sometimes, a partnership can prove risky. At one point, Objectiva\’s technical director actually came to Hallock and inform