If you are capable of providing detailed design specs without any deviation or thought required, offshore development is a great option. The instant your SAP design requires a measure of experience and insight to make judgment calls, or to look for data or processing that is not explicitly spelled out in detail, you are headed for huge hidden costs.
The level of detailed spec design work by SAP functional consultants merely shifts the development time and costs to the higher-priced resources that are hidden from TCO and sales quotes. If you can write “functional” specs that more closely resemble technical specs with specific tables and fields spelled out in detail, program pseudo-logic defined, every possible alternative anticipated, and no detail left out, then SAP offshore development works well. If you are not prepared for that level of detail, then you are likely headed for a much larger invoice in change order costs and hidden functional time than you ever anticipated.
Offshore resources are often smart, industrious, and hardworking, but the ugly reality no one talks about are the real rates because these resources lack significant SAP experience.
This is the final post of a three-part series:
- Part 1 – SAP Offshore Development Project Experience
- Part 2 – Hidden SAP Offshore Development Costs
- Part 3 – Where Does SAP Offshore Development Make Sense?
A quick test for whether you should offshore your SAP project is the nature of the work. Commodity services are a perfect fit for SAP outsourcing or SAP offshore work.
If the effort involves any type of innovation, business transformation, or change management, then SAP outsourcing or SAP offshore development may be dangerous and will cost you far more than you are led to believe.
SAP Upgrades Might Support SAP Offshore Development
One area I have seen where SAP offshore development work makes sense is upgrade projects. Much of the development work there is re-working existing objects where the requirements from previous projects have been well tested and adjusted. If the work involves enhancements, the gaps are well-known and understood so that they can easily define the detailed SAP development requirements. From this standpoint, SAP offshore review and adjustment of existing code makes sense. Developers need little experience to use the syntax checker and do the occasional program adjustment. Other than possible poor coding, the risk is lower.
SAP Production Support Might Work With SAP Offshore Development
In a fairly stable production environment with few enhancement or new functionality requests, SAP offshore support might work well. The fix requirements are very specific and limited so that these types of small adjustments or corrections work well in an offshore environment. Even for some of the smaller and less complicated enhancements or improvements, SAP offshore support might work well. However, for more extensive troubleshooting or complex requirements, you are better off with local or onsite support.
For more details, see Outsourcing Your SAP Application Support. This article provides some insight and framework for understanding the SAP outsourcing or offshore fit.
Conclusion on SAP Offshore Development
Regardless of the hype and sales pitches, SAP offshore development has far more Total Cost of Ownership than anyone has been led to believe. There is a place for it, but that is rarely in a new project or an extensive rework of complex processing requirements. While you may not see the costs, the offshore project model will cost you unless you are fully aware of the requirements and hidden costs that are never defined in any of the sales pitches or materials. Of course, they will never tell you SAP offshore development might cost you far more than higher priced local resources in many situations. If they had that level of integrity, you would never engage with them for those services.
For more information and insight on this topic, see IT Outsourcing, Off Shore Support, Cost Cutting and IT Department Changes. That post provides some additional insight on where SAP internal resources should focus, as well as where offshore support might make sense.
