ACADEMY OF ECONOMIC STUDIES OF MOLDOVA

Report: The current

problems of offshore
zones
Course: Geoeconomics

Chisinau 2015

Toderas Tatiana
FB-147

Shortly about Offshore zones

Offshore zones (tax havens) are countries or territories with zero tax-registering companies.
Instead, there are countries of registration charges for business registration and annual fees. To
set up a business there, you also need to have a locally registered agent, pay your annual
government fee, and maintain a legal address .
Even if a lot of people use offshore zones, especially rich people, they do encounter with certain
difficulties which are:
-

Offshore work is not measurable or quantifiable, leading to lack of confidence in the

offshore effort;
Lack of visibility into day-to-day work;
Lack of a competent lead/point-of-contact;
Lack of plans for downtime;
Offshore teams lose access to onshore servers and applications;
Time-zone difference;
Cultural communication differences can create confusion;
Different life/business experiences mean different assumptions;
Things may get lost in translation;
Hidden costs are likely;

The detailed characteristics will be described shortly below:

1) Offshore work is not measurable or quantifiable, leading to lack of confidence in the
offshore effort:
Testing is inherently difficult to measure, and this problem is exacerbated when the testing team
is offshore. Having an easily accessible, centralized repository for your test cases and test results
is critical, and you must be able to easily and quickly view reports to see and measure numbers
of test cases created, what test cases have been run, their results, how many bugs have been
found, etc.
2) Lack of visibility into day-to-day work:
Quite simply, it is difficult to track what offshore teams are doing, especially offshore testing
teams. The days of the 'walk around manager' are over. In our experience, the best way to
maintain visibility into the work of offshore teams is to have every team member submit brief
status reports every day indicating

what they worked on that day,

what they are planning to work on tomorrow,

and whether or not they are facing any hindering issues (e.g. not being able to access
a server in the US, etc.)

This allows you to redirect any test effort which has lost focus or is not correctly prioritized, as
well as to address issues the team is facing in a timely manner.

3) Lack of a competent lead/point-of-contact:

While you want to maintain visibility into what every team member is doing, you must have a
single person on the offshore team who is responsible for their effort. It is nearly impossible for
an onshore lead to effectively micromanage an offshore team, and without a single point of
accountability at your offshore team, you have a recipe for almost certain disaster. Simply put, if
you don't have a good lead for the offshore team, get one as soon as you can! The offshore test
lead should have excellent communication skills as well as an in-depth understanding of your
application under test and perhaps be the main troubleshooter when inevitable problems arise.
This person should be a test lead who is actively involved in the testing effort, not a business
person/account manager who handles contract issues.
4) Lack of plans for downtime:
Remote teams, especially those located in developing countries, can experience any number of
problems which can lead to hours or days of lost productivity. Examples of these problems can
include power outages, network connectivity problems, viruses, excessively long build
downloads, build installation problems, "bad builds", blocking bugs which require help from
team members who are sleeping/offline, and the list goes on. Of course the best way to deal with
these bugs is to proactively prevent them from happening, but there will always be contingencies
that you didn't plan for.
Always have a backup or contingency plan for the team to continue working when the primary
tasks cannot be completed, with activities such as:

updating test cases

documenting exploratory tests
updating test plans
regressing old bugs
automating more test cases
brainstorming new test cases
developing new test data sets

5) Offshore teams lose access to onshore servers and applications:

Any number of problems can prevent your offshore team from accessing machines located
onshore, such as your defect tracking, test case management, software configuration
management/ build server, and other systems. Problems can include bandwidth issues or
complete loss of connectivity, regularly-scheduled backups which take the system offline, and
security policies that prevent offshore teams from accessing the network.
Some teams have dealt with this risk by replicating various databases to live in both locations.
No matter what solution you use, one of the most important things to make clear to your offshore
team is to "keep working" even if a system is down. For example, bugs can be sent via email if
the defect tracking system is unavailable. As long as the team has access to a testable application,
there is something useful they can be doing, such as exploratory testing.

6) Time-zone difference:
Clients usually choose to work with offshore developers in particular projects, because it is a
good option in many aspects. However, it presents them with a problem: time zone difference.
This means that when the developers are working at the working time in their place, the client is
sleeping because it is night in his zone. And if an error occurs in the development process, the
developers will either wake the client up to report the problem, or wait to the next day for his
response via email. Both of these two way are bad, because it is inconvenient, wastes time,
money, and loses the cooperation between client and developers.
7) Cultural communication differences can create confusion:
"Yes" is a word you are likely hear quite a bit. If you ask your offshore counterparts if they can
have a task completed by the end of business tomorrow, and they say "Yes," you may not have
received the response you think. While you think you heard "Yes, it will be done," they are more
likely saying "Yes, I understand" or "Yes, I'll do my best." Understand this subtly of
communication, and things will go much smoother.
8) Different life/business experiences mean different assumptions:
You know how your users respond to situations and what their work environment is like. Your
offshore team probably does not. Whether it's how an input screen is designed or the way your
users utilize reports, you will probably need to be painfully specific in your design because your
assumptions will likely be different from those made offshore. Those workers are not
inexperienced; they have just had different experiences.
9) Things may get lost in translation:

A number of offshore team members I have worked with spoke better English than some of their
American counterparts. That said, you will probably find that there are differences in the more
British English they are using in India as compared to American English. Even everyday
expressions may come off sounding very strange when heard by a foreign ear.
This does not mean you have to worry about what you say or choose your words extra carefully.
What it does mean is that you should not assume everything you are saying is being immediately
understood. Just as you might wait until after a conversation to look up a word you didn't
understand, your offshore team may be doing the same with parts of your speech.
10) Hidden costs are likely
In spite of the distances between the parties, communication still must happen. That will mean
telephone calls, telephone conferences, Web-based meetings, and possibly video conferences. All
of this is an additional cost to your project. And if you follow the advice above by having
someone onsite as a point of contact, the costs will skyrocket. Make sure everyone understands
that these costs will be there. Note, however, that these costs are small compared to the costs to
the project of not being well connected.

Conclusion:
The listed issues are just a small part of the whole big offshore business. In spite of the fact that
doing a business in a offshore zone is quite profitable there are still issues and difficulties that
should be taken in consideration and taken care of before even starting there.