Offshore testing – will it work for your organisation?

New Thinking 25 January 2016 Madhusree Bandyopadhyay

Offshore testing has been topical for decades, polarising enough to have gained some ardent supporters who have profited from the practice, while others oppose it strongly – but both factions with their own arguments. The decision to offshore however, needs to cater to both the organisational culture and the organisational structure.

The most obvious advantage of offshoring is cost reduction and this is supported by rate differentials. From my personal experience of working in a variety of offshore IT service delivery companies, as well as in New Zealand, offshore companies offer an appealing rate with up to 40% to 50% in savings. However, as far as software testing services go, there are a few other major factors to be considered.

  • Testing involves an intense and real-time involvement of business personnel. Geographical distance, cultural barriers and time zone differences pose significant challenges while conducting testing from an offshore location. Differences in time zones between India and New Zealand, for example, mean that real-time co-working is challenging – and the turnaround time for trivial issues excessively high. To fix this, offshore testers are subsequently brought on site during the test execution phase, reducing the cost advantage substantially.  
  • In order to leverage on an offshoring model, requirements and business processes require thorough documentation and management. Otherwise, lack of domain and application knowledge can result in incorrect testing and defect reporting. For some clients, it may mean additional costs and, for others, a change in the current organisational practice. Without detailed test specification and business process documentation, an organisation cannot hope to gain optimal benefits from offshore testing.
  • Some hidden costs are not considered during budget planning by New Zealand clients. The total cost of ownership of the testing process must be taken into account during cost assessment of remote operation. The initial time spent to select offshore vendors and the transition phase may take three to six months. There may be long waiting periods to get a visa for on-site presence which is required during the transition phase. Multiple travel costs by the client to inspect the offshore site and PMO costs to overview offshore work may have a significant impact on the total cost of the project. 
  • Indian system integration companies are challenged by a high attrition workforce, which can be as high as 27% according to the Hay Group Study. This high rate of staff turnover can also have an impact on final delivery.
  • Currently, the Agile and the iterative delivery model are preferred by many Kiwi clients to get quick ROI. The most important facet of Agile delivery in a fast-moving workplace is communication. Without it, processes can fall apart and deadlines can fail. Working with a testing team with little Agile experience (very common in an offshore site) and often with a time difference of more than seven hours, can be scary. Agile is most effective when presented face-to-face. Offshoring can defeat the purpose and effectiveness of this model.
  • In India, I’ve witnessed the cost of offshore services rising by as much as 10% to 20% per year and these figures are expected to continue to rise in the foreseeable future. Now compare that to the 1% to 2% per year rise in New Zealand. Clearly, the once significant cost advantage that offshore locations once thrived on is dissipating. 

Certain situations do profit from offshoring – for example, testing with niche skills unavailable in the local market or a quick team ramp up for a client or component testing by virtue of its simple nature. 

On the other hand, end-to-end integration testing (E2E) and user acceptance testing (UAT) are serious candidates for onshore testing. E2E and UAT onshore testing guarantees close business and customer interaction during the test design and test execution phases, reducing the risk of error. Testing would be more realistic if copy of the production data is cloned in an effective way and used during manual testing. Using production data in a non-secure environment outside the country will violate a number of regulations and it’s the client organisation that is ultimately responsible to ensure regulatory compliance about customer data.

Performance testing is another area to be considered for onsite testing. Remotely connected performance test execution from offshore doesn’t build the right client confidence due to uncertainty on network latency and service quality.

Testing is more of a live operation than other software activities. Before making a decision based on the rate difference alone, an organisation should also factor in its own organisational work culture, an adequate level of control over the project for risk reduction and end-customer satisfaction.