Client Introduction

The company combines the industry's deepest knowledge of telecommunications and applications with award-winning patented testing and monitoring solutions to ensure its customers realize the promise of their technology investments. For over a decade, thousands of network equipment manufacturers, service providers and enterprises worldwide have trusted the company to reduce the time and cost of integrating new technologies into existing environments.

The Story

The main rational behind the company's decision to offshore their product engineering to Asia was cost saving. According to Lei Shen, the company' Chief Representative for China, "offshoring software development is a global market trend that affects any company in our industry; while our engineering expenses were under tight control, we believed that ultimately it was better to start the offshoring process before being under considerable market pressure to do so, and therefore have enough time to make the best decisions, and to move at our own pace."

A consensus emerged rapidly within the management team, not to set up a subsidiary but rather to establish a partnership with a local company. According to Shen such an approach would leave the company with all its options open, including the one to pull out easily in case the experience was not proven satisfactory.

The company was then faced this the question of picking the right location for the offshore team, especially since the company wanted to co-source its development; a process that includes the temporary relocation of some key employees to smooth the transition process, facilitate the know-how transfer, thus reduce the overall risk.

The decision was made for Shanghai, an International place, connected in many ways to the USA. Having made the decision on the location, the company looked for a mid-size company. "We wanted a partner large enough to be economically stable, but not too large, so the company could be a strategic customer for them" noted Shen.

With a local team already over 30 engineers, the company considers the operation a success; and now the plans is to bring the size of the team to 50 by the end of 2007. Although the exact cost savings will only be measured on a longer period of time, the company' management believes that the total cost of ownership has already been cut by more than 50%.

Business Challenge

Offshore part of its engineering team
Reduce engineering expenses by 50%
Find a reliable partner, as a previous attempt to outsource failed

Success Achieved

Hiring and training of a team of 15 engineers to develop and test the company' suite of products
Engineering costs cut by over 50%
New products delivered in a timely fashion