Fortune 500 Turning to Russian Programmers
Political instability in India combined with Russia's depth of programming talent makes it an attractive new location from offshore software development.
What do companies such as Boeing, Motorola, Intel, Siemens, Citibank, Dell, the U.S. Department of Energy, IBM and Zurich Financial Services Group have in common when it comes to programming? All are turning increasingly to Russian offshore resources in preference to India.
Why? One possible factor is the political instability that pervades the Pakistan-India area. Few American enterprises seem as eager as they once were to risk mission-critical projects in an environment that could erupt into war.
Perhaps more important, though, is the quality of Russian resources. "Russia possesses a unique intellectual capital that should translate into existing investment opportunities in the years to come," says Alexander Andreev, a financial analyst at Brunswick UBS Warburg.
A recent study by Brunswick UBS Warburg showed Russia's intellectual depth: Russia leads the world in engineers per 10,000 citizens; science students make up half the total graduates. And while Russian programming is a little cheaper than India, it produces superior programming resources.
"As a result of the educational system and culture, Russian code expertise is married up with a quality that American companies find highly desirable—the ability to innovate and be creative in their approach to solving customer problems," says Dmitry Loschinin, CEO of Moscow, Russia-based offshore software developer Luxoft.
With such talent available, offshore programming is shedding its image as a low-end Y2K/mainframe-maintenance game, evolving more and more into high-end Java, Oracle and Web-development assignments. Russia, in particular, seems to do particularly well when sophisticated algorithms and complex coding are involved.
Take the case of Boeing Company. During the 1970s, Boeing developed a mainframe-based drawing system to electronically store information on the thousands of drawings and blueprints created in the development of aircraft and related systems and equipment. Known as the Automated Drawing Accountability and Distribution System (ADADS), this system served the company well for nearly three decades.
"The ADADS system was of high quality but out of date," says Scott Griffin, vice president and CIO at Boeing. "It includes more than a million drawings as well as systems used by engineers and designers to update existing designs and construct new ones."
By the late 1990s, however, this drawing storage and distribution system was in need of modernization. ADADS documentation didn't meet Boeing's strict quality standards. So many changes, additions and updates had occurred over the years that documentation needed to be redone for many parts of ADADS. In addition, architectural limitations meant that it was increasingly difficult and expensive to meet new requirements.
For these reasons, the company requested that Russian offshore software developer Luxoft assist in redeveloping this legacy drawing distribution system. Boeing contracted with Luxoft to convert the entire system from Fortran 77/Unix running a hierarchical database to a Web-based Sun Solaris system using an Oracle relational database. Programmers used IBM WebSphere 3.5 and Java 2 Enterprise Edition.
"Luxoft converted our drawing system to a modern Web-based platform while preserving existing business logic and retaining full functionality," Griffin says.
One of the primary requirements was to design and develop a sound architecture that enabled enhancements and adjustments to be made in the future should Boeing decide to further enhance the system. The aerospace giant also wanted system maintenance to be easy and cost-effective, taking into account its existing hardware and software standards.
Boeing invited Luxoft to first conduct a detailed analysis of the legacy system, identifying its key elements and weak points. The company then restored system documentation. In order to preserve ADADS' business logic, the Russian-based programmers developed several proprietary conversion tools to support the transition from the old system into the new one.
The project further involved the development of intricate user interfaces for the system as well as interfaces to specialized equipment used by Boeing. WebSphere and Java 2 platforms were again used. For instance, a highly specialized microfilm development device was tied in to ADADS over the Web.
By modernizing the system, Boeing's ADADS has developed far greater functionality. It now:
- Supports all aircraft drawing and blueprint distribution requirements
- Maintains information on all current drawing configurations
- Tracks the location of original manual drawings, linking them to later iterations and related drawings or blueprints
- Generates order forms for printing and distribution of documents as needed by Boeing's technical or managerial staff
- Records internal and external distribution requirements for all documentation processes distribution requests from 23 other computing systems that can now be tied in to ADADS
- Provides Web access to all of this information
- Offers automatic and custom reporting options to management that weren't available before
- Provides detailed statistics, as well as billing information.
"The new ADADS system is based on the industry standard technology and can easily be integrated into our global information system," concludes Griffin.
Details: Boeing's ADADS System
Project Leader: Scott Griffin, VP and CIO
Organization: Boeing Company, Commercial Airlines Group
Location: Seattle, Wash.
Web Site: www.boeing.com
Business/Mission: The world's leading aerospace company, and the largest manufacturer of satellites, commercial jetliners, and military aircraft. Total company revenue in 2001 was $58 billion.
Goal: Cost-effectively convert a legacy drawing system from a hierarchical database to a relational database and put it on the Web while preserving existing business logic.
Scope: The drawing and blueprint database contains over one million documents and had to be moved from mainframe to a Web-enabled architecture. It's accessed by 23 other information systems used throughout the Boeing organization.
Equipment/Platform: Mainframe running Fortran 77/Unix with a non-relational database had to be moved to a Java/Sun Solaris platform using an Oracle 8.0 database. Utilized programming languages and tools such as IBM WebSphere 3.5 and Java 2 Enterprise Edition.
Evaluation Requirements: Cost, quality of programming resources, ability to meet Boeing's Software Engineering Institute-based software development quality standards.
Solution: Instead of using in-house talent or hiring more staff to carry out the conversion, Boeing contracted with a Russian offshore software developer.
Results: "As well as the system's greater flexibility and expandability, the conversion improved system stability, reliability and access," says Griffin. "It has also reduced cycle-time and increased flexibility, allowing for the support of new requirements and thereby lowering maintenance costs."
Cost Savings: Programmers in Russia cost about $25 per hour compared to $115 per hour for comparable U.S. resources. Overall, though, Boeing didn't realize proportionate savings. Unforeseen communication, travel and management costs over the project's year-long duration absorbed more resources than Boeing originally anticipated.
Security Issues: The legacy system had its own security system that differed from Boeing's global security system, making it inconvenient for end users as they had to go through two distinct security processes in order to use the system. These security systems are now being unified.
It's possible to transfer business logic in full from a mainframe to a Web-based system but it takes detailed programming as well as the development of effective conversion tools to support the transition.
It takes a strong commitment to offshore outsourcing that involves far more communication and management than would be expected at first. This includes taking into account time differences, language differences, and differing cultures. Over time, this can always be worked out, but it takes time and energy for a strong relationship to be built.
Future Challenges: Adding data distribution functionality as well as complete integration with Boeing's global information system.