Product Development Outsourcing Helps This Company Stay Competitive

How does a 100-percent, self-funded, interactive educational software company stay afloat and compete with much larger organizations to deploy electronic media and online educational solutions? The answer is through outsourcing.

Xplana Learning develops digital educational solutions for big-name publishing clients, including McGraw-Hill, Thomson, Houghton-Mifflin and Cambridge University Press. As a result, the company can’t afford much downtime. Nor can it afford to compromise its intellectual property (IP).

Wanting to concentrate strictly on educational learning and thought leadership in the publishing educational space, Xplana set out to find a partner to handle its application development and maintenance. The company’s president, Alex Pereira, had a vast amount of experience in outsourcing as well as publishing.

“One thing that always concerned me with interacting with outsourcing groups is your IP,” said Pereira. “It’s important to protect that.” It’s particularly important for those companies outsourcing product development to be wary in choosing a service provider. As Pereira explained, what you don’t want to have happen is to end an agreement with a vendor and then discover that the same company has “come up with a private branded version or a competitive version of a product you might have,” he explained.

Xplana’s offerings include a learning management system, a media book platform, a homework management solution, a voice-based communication and collaboration tool and a library of standardized general taxonomies for all branches of education. So the company would have much to lose should a former service provider walk off with some of its goods.

What Made Patni a Good Choice

It was largely because of that risk that Xplana chose Patni Computer Systems, an expert in application development and quality assurance testing services, as its outsourcing partner. “They never played in the product space and have no interest in ever doing that,” Pereira noted.

In addition to Patni’s distance from the educational software space, the company was also a good outsourcing partner candidate for Xplana because of its proximity. “Being able to access our outsourcing partner in real time is critical,” Pereira said. Boston-based Xplana can’t get a partner with much more real time than Patni, which is located in Cambridge, Mass., “a stone-throw away from my offices,” Pereira pointed out. Patni also has operations in India, as well as Canada, Europe, Australia, Japan and the UAE.

Patni also fit the bill for Xplana because of its ability to help Xplana grow development operations quickly. “Having a partner that would allow us to scale production is critical for me to be able to do business and do large-scale business with my partners,” Pereira said. This scalability enables Xplana to land thousand-book deals easily. In order to do that, however, “I need the ability to scale contractors both onshore and offshore,” Pereira added.

How the Arrangement Works

Xplana defines the production process using its toolsets, according to Pereira. “Patni will then implement that using the correct blend of resources onshore and offshore. They help us specifically with technical implementation for software development, quality assurance and production scale,” he added.

Xplana serves as the educational learning expert in the deal and handles all of the thought leadership. Patni acts as the application development and maintenance organization. Areas such as product architecture, design, project management, etc., take place in the Boston office. “We offshore things that need execution/implementation power,” Pereira explained, such as quality assurance, load and stress testing, coding and some production. “Once design and architecture is completed,” he added, “we will use offshore teams for muscle to be able to meet aggressive timelines while still maintaining budgets.”

Patni supports Xplana through the entire engineering lifecycle. The company’s application development and quality assurance testing expertise lets Xplana scale conversion operations as well as speed products to market. “Patni’s principle focus is to enable Xplana to swiftly react to opportunities that require products which meet the publishing industry’s changing online and interactive use requirements,” Pereira said.

Prior to this arrangement, Xplana hired contractors on its own and had some false starts with other smaller service providers. “It was really hit or miss from a quality perspective,” Pereira admitted. “It cost us business.” Because of how quickly Xplana is landing and making deals today, it needed an established development team. “The amount of time needed to be able to bring up a team is just not cost-effective for me,” Pereira said.

Managing the Partnership

Xplana has a director of business development who serves as the company’s point person to engage with Patni’s point person. “As business approaches, we contact the business director who contacts Patni and then will handle the next stage,” Pereira said. “Executives on our side will meet with Patni’s executives quarterly just to kind of predict what’s coming down the pipeline each quarter,” he added.

The partnership runs so smoothly that Pereira doesn’t know the total number of people involved on both ends. “My sense is that the total team working on this is small,” he said, “quite possibly no more than two dozen or so.”

Xplana averages development of 300 to 500 titles annually. The outsourcing arrangement is largely what makes that possible. Because the arrangement is so successful, Xplana hopes to double that amount in 2007. The company sees that as a realistic goal because the outsourcing arrangement “dramatically reduces the need to invest in application development resources, tools, methodologies and training,” Pereira said. “As our solutions partner in this area, Patni invests in these areas while staying on top of the most current industry trends and technology trends through their centers of excellence.” In addition, the outsourcing arrangement helps accelerate Xplana’s time-to-market for new products, which, in turn, boosts revenue growth and market share.

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