Ipreo, New York, New York, USA & EPAM Systems, Kiev, Ukraine
A financial software
company discovers a newfound faith in outsourcing.
from left, Arkadiy Dobkin, Dmitry Maizet, EPAM
PHOTOS BY RYAN DONNELL
Four years ago, Jonathan Meyer was ready to give up on outsourcing. The CTO of global financial software provider Ipreo had tried outsourcing a few projects to India, with only marginal success.
Mr. Meyer had experimented with a well-known vendor, a small boutique vendor and even a captive team of his own employees sent to work in India.
But none of his projects delivered much value because teams didn't always want to write code or build solutions. “It was always a struggle,” he says.
Following an influx of employees and acquisitions, Mr. Meyer had to rethink his outsourcing strategy. Several of the new hires hailed from Eastern Europe and encouraged him to look in that region for an IT vendor.
He was skeptical.
“In India, you know who the big vendors are, but in Eastern Europe, I had no idea where to begin,” he says.
A colleague suggested EPAM Systems, a U.S.-based IT outsourcing services provider with development teams across Central and Eastern Europe.
First the outsourcing team had to prove it knew how to handle security concerns around sensitive financial data. “Security is of massive importance to us,” Mr. Meyer says.
Technical skills weren't enough, though— Ipreo needed to be able to communicate effectively. The fact that senior team members spoke English fluently boded well.
But the proof would ultimately come in the results. Mr. Meyer gave EPAM a project to test the waters: a sophisticated data-analysis tool that his in-house team had already tried, and failed, to build.
“It was one of those projects that had a lot of complicated code, and at first, they didn't want it,” he says.
EPAM eventually agreed to tackle the project, and delivered it on time and to specification.
Since then, all of Ipreo's major engineering projects that can't be handled in-house go to EPAM, and Mr. Meyer has come to rely heavily on the company.
“I don't think of it as outsourcing. I think of it as ‘co-sourcing,’” he says. “Just as we have a New York office and a London office, I think of EPAM as our Kiev office.”
READY FOR THE BIG TIME
Based on the success of the initial projects, Mr. Meyer outsourced a major overhaul of Ipreo's flagship product, Bigdough, to the Eastern European team in April 2007.
Bigdough provides contact and ownership data on 50,000 capital markets professionals. The original version was built using ColdFusion, a programming application Mr. Meyer found to be too limited. “People loved it, but it didn't scale up,” he says.
Ipreo wanted to make the software more robust and scalable, but the company didn't have the resources or expertise to manage the redesign. So Mr. Meyer brought the project to his outsourcing partner.
The fate of the mission-critical project would depend on how well the two teams could collaborate, says Dmitry Maizet, director of technology solutions at EPAM and account manager for Ipreo.
“The most critical aspect of how we work with any client is about the relationship,” he says. “We take shared responsibility for the outcome, and we have a project management process that prioritizes communication and transparency.”
Before launching the project, Mr. Meyer's in-house engineers established the code style and methodology they wanted the EPAM team to follow. They also brought the lead engineers from Kiev to New York to discuss the project's goals and how the database would be used.
“We never want people making assumptions about the project if there are knowledge gaps,” Mr. Meyer says. “Unless you sit down and talk with your team about how to build it and what you want it to do, it won't come out right.”
There is no subordination between the client and the vendor team. Our people feel like they are a part of the team, and they are not shy about pointing out problems when they see them.
—Arkadiy Dobkin, EPAM
To avoid the out-of-sight, out-of-mind problem, Mr. Meyer set frequent milestones for the EPAM team and established a daily “10 at 10” call, when the two teams talked for 10 minutes about the project. “It's a way for them to build their knowledge about us, and for us to be comfortable with what they are doing,” he says.
To further foster trust, EPAM granted the Ipreo team full access to project data through a web portal and sent daily status notifications. “They don't need to ask us what's happening in the project environment,” Mr. Dobkin says. “They can see for themselves.”
Upon project launch, EPAM's team immediately started churning out pages of code that Mr. Meyer's team members had struggled to build on their initial upgrade attempt.
Fueled by their success, EPAM developers began making suggestions to improve the technology and evolve the design rules.
“There is no subordination between the client and the vendor team,” says EPAM co-founder and CEO Arkadiy Dobkin. “Our people feel like they are a part of the team, and they are not shy about pointing out problems when they see them.”
The redesigned Bigdough program was released in January 2009. Now EPAM is working on an upgrade that will integrate the database with salesforce.com, a customer-relationship management cloud-computing platform. It's scheduled to go live this month.
Ipreo has faced a few challenges working with an Eastern European vendor, but “no more than you would have with any company,” Mr. Meyer says.
Because of Ipreo's security concerns, for example, it doesn't give the EPAM team access to any data used in the tools it develops. Even Skype is verboten, as it's able to bypass firewalls, and any application that allows file transfers, instant messaging or voice that can't be monitored or archived has risk of viruses or worms. Although EPAM commonly uses Skype, team members are forbidden to use it on any Ipreo project.
The strong relationship forged between the two organizations has also given Ipreo the confidence to work with EPAM on a time-and-materials basis rather than a fixed contract.
The move marks a huge organizational shift, Mr. Meyer says, allowing Ipreo to adjust project goals based on changing marketplace needs without worrying about pre-defined specifications.
“It takes a gigantic amount of trust,” Mr. Meyer says. “If we miss our dates, it's our risk, not theirs.”
But it's a risk worth taking, he says: “Working this way makes us both more nimble.”
Companies shouldn't give up on outsourcing, Mr. Meyer believes. But they do need to invest the time and due diligence required to develop trust. “When you view outsourcing as a partnership, wherever your vendor is, that's when you get the best work,” he says. —Sarah Fister Gale
PM NETWORK DECEMBER 2010 WWW.PMI.ORG
DECEMBER 2010 PM NETWORK