July 04, 2019 • 8 min read
Entering into an outsourcing partnership works just like any other relationship—both parties have to exert a decent amount of effort for it to actually produce the desired results. And just as you don’t go into a partnership with a person you have scant respect for, a contract between your organization and your outsourcing company should be one based on mutual trust and respect.
In previous articles, we’ve gone into significant detail about the many benefits of outsourcing your software development needs to an offshore team. But it doesn’t mean that the burden of responsibility for getting a project to successful completion lies solely on the shoulders of the service provider. As the client, your company also needs to take an active role in the management of the outsourced development team and in the project overall, so that the development process goes as seamlessly as possible.
In this blog post, we list down five key points that could be instrumental in ensuring a successful collaboration between your business organization and your outsourcing partner.
You can also check out these 6 secret techniques to improve software development outsourcing.
Perhaps the most common misconception that clients have when it comes to outsourcing is that they think the service provider will take care of everything that they (the client business) themselves cannot handle, and with the outsourcing company having little knowledge of the project. We know this to be a fact because having been in this industry for so long, we’ve handled such concerns or received such requests from potential clients. We at Arcanys know better than to enter into this type of partnership where too much is expected of the provider, because this will only end in failure, resulting in losses for both parties.
It's important to understand that this is a partnership, and both will thrive on the success of the project. Therefore as a client, you need to temper your expectations regarding what your outsourcing partner can do. Yes, the offshore team may have the right talent and technical skills needed for the job, but you need to understand that they don’t simply get on board and hit the ground running. Just as you give a new hire of your company time to learn the ropes, your outsourced team also has a learning curve to go through. Your role includes providing senior guidance to the outsourcing partner, especially in the initial stage, so that the team can more easily reach the desired level of knowledge and work quality.
Usually, we recommend starting with a reasonable team size (about 2 to 4 developers) to integrate with the existing team members on your side. A good ratio is 2 to 5 outsourced developers for one in-house senior lead. It's also important to have them start on projects that are less critical and are not under extreme time pressure. Usually, you wouldn’t put a new hire on a critical project if he is not a proven expert in the field. At least in software development outsourcing—miracles do not exist. Even Arcanys can't do such things (although the stuff we actually do comes pretty close).
In addition, be realistic regarding the rates. Take time to understand what value for money means in outsourcing, based on your particular needs. A good developer can’t be as cheap as 5 dollars an hour. But at a rate of US$30/hour, you can already avail the services of a fairly skilled developer with cost savings of more than 50% compared to the local price. Further, this comes without the hassle of recruiting, managing, payroll, office space, and so on. So it’s not that you’ll be getting good talent for next-to-nothing rates, but that the money you spend on an offshore team will go much further than it would for skills acquired locally.
As a client, you need to have at least one technical lead who has solid knowledge of your software products in general, and the project at hand in particular. You will realize how critical this is, as soon as you also become fully aware that the responsibility for the project essentially remains with you, the client. The outsourcing provider should be ready to augment your team with the specific developer skills/talent you need. But at the end of the day, it’s your product on the line, and therefore, your side should take charge.
In some cases, we do take over the whole technological team, but then we would need to have at least a part-time CTO (very high level) on our side to look after the project. This arrangement may lead to some issues (e.g., potential delays and/or additional costs), that would otherwise not be present if the client has a reliable technical person, to begin with. The thing is, if the business organization lacks in the technical department, there would be various other needs that need to be taken care of, such as a project or product management. In these cases, we have to complement your weaknesses to make sure that the project cannot fail.
As a software development team provider, Arcanys has found the most success working with clients that come with strong team leads who know what the project requires. For tech-enabled businesses, the standards are more well-defined because most of them have the technical requirements down pat—technology heads, core knowledge, and expertise, all available in-house.
As much as we like to work agile, when the team starts working, code and features should be shipped rather quickly. This means that the client must make sure that he has enough requirements to keep the team busy. Basically, what a business would expect of the employees that are working within the company’s premises—have them perform their tasks quickly and efficiently. But for an offshore team, this would require some preparation and a clear roadmap for the product.
Where applicable, the outsourcing provider can collaborate with a business analyst to help manage or complete the requirements. However, when knowledge of the business domain is critical (by this we mean complex applications that require in-depth business or technical knowledge such as in the mining, medical, or finance industries, for example), the client needs to primarily handle the requirements and the business analysis. It would be too risky otherwise.
Outsourcing one shot for the short term rarely pays off. The value for money is more interesting and becomes more apparent when you’re in it for the long term. The right strategy for outsourcing requires some preparation and groundwork, so if you’re thinking of getting an outsourced team for less than six months, it's probably not worth it. Just imagine, would you go through the entire process of reviewing resumés, shortlisting, interviewing, and making the final decision, just to hire a new employee for six months? Didn’t think so too.
Outsourcing rarely works in emergency situations because if you would unexpectedly need to augment your development team ASAP, this means there was a lack of preparation on the client's side. In times like this, outsourcing is not the answer, and going into it may only spell more trouble down the road. When businesses consider outsourcing software development, they're usually looking to find a reliable partner that can build a capable team for them; one that can produce features at a rapid rate, and at a good value for their money.
As a client partner, it's always much better for you if you allow your provider to have some visibility into your business plans. This way, they can assist you, mainly by developing the skills that will be needed in the coming months, and eventually by giving inputs as well, as they gain more familiarity and knowledge with your products. This also helps the outsourcing partner plan out the hiring and training of talent, so they can have the developers ready when the clients need them.
Communication is an absolute key to success, and alignment of culture and values is a huge part of it.
An outsourcing contract is often entered into between parties from two countries with different cultures. This is a very important aspect that should figure into your choice of country where your extended software development team will be based in. There are a host of factors to take into account—the language, time zones, cultural differences, even national holidays—and these can all affect the progress of your project.
A good provider should raise the level of awareness of both the business owner and the outsourced team on these differences so that they do not become divisive issues as you move forward. The client and the developers have to understand each other's cultures and be sensitive to nuances in their respective use of the English language to maintain good communication and avoid misunderstanding.
Also, it's important to understand what the vision of your outsourcing provider for the long term is, and see if it's aligned with your future needs and vision for your organization. Since most of the time this kind of partnership bears fruits in the long term, it is critical to set the expectations early on. And as business goals may inevitably change, update each other with these changes so that the other party can also adjust and recalibrate expectations.
When deciding to augment your software development talent with an offshore team, the choice for your outsourcing partner could be the most important one you would need to make. Keep in mind that your tech partner can only bring so much to the table; the equally significant part of the effort should come from you. Only then can your outsourced software development team work smarter, and, more than just contributing time and skills, they would be motivated to put in their highest quality of work.
Combining your outsourcing partner’s technical expertise and your organization’s active involvement in the project is key to getting your software solutions into the market as quickly and cost-efficiently as possible. There’s no better time than now to get your ideas out of the planning stage and into development.
Ask us about our software development outsourcing services today.
We can get started right away with a dedicated development team built just for you. You may visit us at our Cebu office, where both co-founders are based. Or you can give me a call, or drop me an email at email@example.com.
This article was initially published on Outsource Accelerator.
Fred had been working on IT and operational projects in the finance and software industry in Switzerland for 10 years before co-founding Arcanys in 2010. With nearly 20 years of experience in the industry in Switzerland, Hong Kong, and the Philippines, Fred is now leading the worldwide sales and marketing efforts of Arcanys.