Managing a CAD Outsourcing Project
by: Lakshman Balaraman
We must first emphasize that here we are talking about outsourcing CAD projects, which is significantly easier than outsourcing software development or IT services (earlier articles of mine have explained why).
This article also assumes that selection of the CAD providers has been completed with due diligence (the methods are described in an earlier article).
As I mentioned in those prior articles, one of the most important ingredients for successful outsourcing is management of the ongoing project by you, the client. To quote from those articles (here 'outsourcer' means 'provider'):
"This may sound obvious, but probably the biggest stumbling block to offshore outsourcing is that after all the contracts have been signed, companies abdicate responsibility for projects to the provider..."
--- Deepak Khandelwal, McKinsey, Worldwide
TASKS IN OUTSOURCING MANAGEMENT:
(1) You have to assume moral responsibility for the project.
A very senior executive should be made the champion of the CAD project. S/he will need technical and administrative people to help with the project, and these people should be informed of their induction explicitly. Let's call this group of people "the task force".
(2) The task force should define the objectives of the proposed CAD outsourcing.
Subjects to address:
- Which input documents will you be giving the provider? (Consider rough, dimensioned sketches, specifications and photographs of included objects, written instructions on what you want in the output, libraries of CAD symbols, design rules for elements not in the libraries of CAD symbols, drawings or sketches showing how the objects in the target area interface with the immediate environment, sample output documents).
- Which CAD platform do you want the work done on?
- Which output documents to you expect?
- What is the weekly project schedule?
- At what interval do you want the provider to send you the work in progress?
- What is the procedure for acceptance of the product?
- What is your payment schedule?
- What is the payment method? (Check, credit card, wire transfer?)
(3) The task force should put the above documents into a contract.
The contract should also contain non-disclosure clauses. The provider should sign and return the contract.
(4) Put robust communication mechanisms in place.
- Email is fine provided mailbox capacities are large. Without a doubt the provider should have a broadband connection, and if your CAD files are large and frequent, so should you.
- Instant messenger programs are good for discussion sessions.
- For frequent large volume transfers, one of you should have an ftp server.
- If voice communication is required, try Skype (free).
- Both you and the provider should have access to a scanner for digitizing sketches.
- You must also have each other's postal address and telephone numbers.
(5) Have a procedure in place for conflict resolution.
(6) As far as possible, do not let go of existing staff because you are outsourcing.
Identify unfulfilled skill needs in your organization when you first think of outsourcing. Explain to the relevant staff that you plan to outsource and that you will train them in those skills. If nevertheless some want to leave, they are responsible for their departure and not you.
(7) Be ready with support services and materials for your providers.
- For instance, you might have to send the provider files that are in a format for which they do not have the opening application. You should have the software and staff to convert the document into a format compatible with the provider's application.
- At the beginning of the exercise, the provider will typically have many technical questions. The task force should include staff whose time is specifically reserved for providing the answers.
- Be readily available to help as much as you can. This builds confidence in the provider's mind as well as a relationship between you and the provider.
(8) Develop a partner relationship with the provider.
- You should be partners in achieving the overall goal... this could be cost reduction, process improvement, more time for your core business, expertise, flexibility and so on.
- Discuss this goal with the provider, ask for their views and treat them like a department of your company.
- More research facts: In the first year, the important issues are the contract, performance measurements and relationships (in that order); by the third year, it's performance measurements, relationships, the contract.
(9) Budget for the outsourcing exercise.
Use this valuable observation to help you plan:
" ... end users engaged in outsourcing indicate that, on average, users spend from 5 to 12 percent of the total contract value on managing the relationship"
--- The Yankee Group (in a recent study)
CONCLUSION
- What we've just described represents the latest thinking on managing a CAD outsourcing project.
- The ideas are state-of-the-art and custom-made for today's world.
- We hope you use them and that thereby your business experiences a significant increase in efficiency, earnings and competitiveness.
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About The Author
You may freely reproduce and distribute this article without editing provided you do not edit it, and include the following resource box:
Lakshman Balaraman, MSEE (University of Michigan), is Executive Director of The Magnum Group, [http://themagnumgroup.net] (link: http://themagnumgroup.net), an engineering and architectural design services company located at Chennai, India.
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This article was posted on November 08, 2004
