GM drives application development offshore

General Motors Corp. last week launched its latest Web-based application for car owners, marking the first time it has relied on an offshore organization for a big application development project.

In doing so, the automaker joined a growing list of companies turning to offshore development as a means to quickly complete complex projects. GM credits this approach with building the application in six months and at substantial cost savings over using U.S.-based consultants, said Stu Dressler, global program manager of Owner Center at GM.

Owner Center is a Java-based Web application that allows registered GM vehicle owners to track warranty, recall and service information online. It was built with BEA Systems Inc.’s WebLogic application server, Art Technology Group Inc.’s personalization server and a Web server from iPlanet E-Commerce Solutions, an alliance of Sun Microsystems Inc. and AOL Time Warner Inc.

Teaneck, N.J.-based Cognizant Technology Solutions Corp. led the project for GM. Two to four project leaders working at GM’s Detroit headquarters managed a team of about 25 developers in Bangalore, India, Dressler said.

Many companies outsource IT services to manage costs during economic downturns. But the complexities of these relationships, particularly with offshore vendors, require strong project management on the user’s part, said Mike Dodd, an analyst at Giga Information Group Inc. in Cambridge, Mass.

“When done properly, [offshore development] can achieve cost-cutting goals, but it’s not a silver bullet,” he said. “It’s like a marriage: If you rush in with haste, it won’t work.”

Caterpillar Financial Services Corp. has also tackled that challenge. The Nashville-based financial wing of Caterpillar Inc. launched a Web-based financial system at year’s end a multimillion-dollar project that took three years to build and utilized offshore developers in India, with project leaders in Chicago, said Tom DePauw, manager of IT at Caterpillar Financial.

To manage the development process and ensure that Caterpillar could maintain the application, DePauw hired application architects and trained employees already on staff in enterprise Java and project management skills. “We grew our support team internally to match the project,” he said.

Having an on-site liaison to manage offshore development projects is another key component of success. Chicago-based ThoughtWorks Inc. played that role for Caterpillar Financial, and Cognizant Technology served as the liaison for GM.

That kind of link between U.S. and offshore developers is critical, said Evelyn Follit, CIO at RadioShack Corp. in Fort Worth, Texas.

The electronics retailer is developing new applications using India-based developers managed through Cognizant. Follit said an on-site liaison can bring in additional cost savings by ensuring that code is reliable and meets quality benchmarks.