5 Things to Consider When You're Hiring A Software Outsourcing Partner
For example: Are you a price-first or quality-price kind of partner?
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Need a software developer? It's easy to outsource them globally, but finding the right outsourcing partner isn't nearly as simple -- though there are some strategies out there that will make your task a little bit easier.
Say, for example, that you want to outsource your software development. Maybe you're convinced by success stories like that of Skype, which built its beta version with the help of three Estonian developers. Or a story like that of Slack, which originally outsourced the development of its app, website and even logo. Or maybe you just don't have the cash -- or the need or the time -- to hire an in-house development team.
Whatever your need, to be successful at your next outsourcing endeavor, here are the top five things to consider before hiring a software outsourcing partner:
1. First, consider geography.
Before starting to look for an outsourcing partner, make it easy on yourself by carefully defining the geography in which you would like to search. Today there are tens of thousands of software outsourcing partners available across the world; Latin America, Ukraine, India, and China are just a few areas full of vendors that are ripe for the taking.
Because communication is key for successful outsourcing relationships, regions with similar time zones are often a good starting point; however, other factors such as nearshore versus offshore, cultural compatibility, political stability, low inflation rates and geographical proximity, are also critical.
Even software-outsourcing firms themselves have begun to take note of these elements," Ludovic Gaudé, CEO of intive, told me in an interview.
Referencing his company's recent acquisition of a Latin American software development firm, Gaudé highlighted the importance of geography. "Apart from a talented pool of engineers, a business culture similar to the U.S. and Europe, and being in a similar time zone to our clients, the [acquisition] also means that our U.S. customers benefit from bilingual developers," he said.
2. Next, decide on price or quality.
As the saying goes, you can't have your cake and eat it, too. The same goes for software development,even more so when you are outsourcing it. Although price and quality always have a spectrum, potential software-outsourcing partners generally fall within one of two categories: price-first vendors or quality-first vendors. So, you must choose which you prefer.
Price-first vendors will often provide a fixed-bid quote for your project, and tend to be more transactionally focused than focused on a long-term relationship. Their expertise lies in finding resources and quickly deploying them for clients with little supervision.
According to a Medium post by Mike Svystun, VP of business development at Vertalab, a price-first strategy "could work well for developing minimum viable products or isolated products limited in scope." That said, Svystun added, "We think it's rarely a good choice for well-established startups."
Quality-first vendors, on the other hand, are more expensive -- as well as significantly more selective about the types of projects they take. Still, they're a better choice for all complex or mission-critical projects. That's because they will most often work under a time-and-materials model, look for a longer term relationship and reject fixed-price bids, on principle.
Similarly, quality-first vendors will spend significant effort and resources training their teams, and often work with the partner's senior personnel to ensure proper delivery and execution.
3. Put your candidates to the test.
Software-outsourcing vendors will each have their unique strengths and quirks. Nevertheless, there are certain core questions you can ask during an initial phone conversation to make sure a potential partner is a good cultural, philosophical and methodological fit for your company and project. Those questions:
1. "What is your approach to software development?" Listen for words like: agile, SCRUM, MVP, short sprints, quick iteration, constant communication and any others you find most important.
2. "Tell me about your previous experience with software outsourcing projects with other U.S./foreign clients similar to us." Try to understand the type of clients the vendor has worked with in the past and how his/her services were valuable and effective. Request at least two or three references, and never risk being the vendor's first foreign client.
3." What are the most critical risks to a software-outsourcing relationship, and how do you manage/mitigate them?" Get an idea of the outsourcing vendor's real experience, as well as what he or she cares most about in a project.
4. What are your strengths as a company versus those of your other competitors? Gauge what your software-outsourcing vendor most underscores in his/her own organization, in addition to any particular strategies and strengths the company is investing in.
If possible, ask a business development representative to be present for the call to help walk you through the high-level perspective of a relationship. Don't get too technical until you delve into details that check for a potential partner's overall fit, as well as cultural and methodological compatibilities, which are paramount.
4. Visit the partner in person, if possible.
Depending on the location you select for your search, visiting may or may not be possible. However, if it is, a personal visit can be a great way to see behind the veil and accurately determine your prospective partner's true features.
Business development routines are well orchestrated within any professional services organization, so during a remote exploratory process, you will likely see exactly what the prospective partner wants you to see. An in-person visit, however, is much more difficult to stage, and will communicate the real state of your prospective outsourcing vendor, as Mark Kobayashi-Hillary explained in a post for Computer Weekly.
"If you have already received a dozen requests for information from your potential suppliers, each one summarising how they can meet your requirements, along with a visit from each sales team -- all with a similar pitch -- the site visit can highlight a supplier's real strengths and weaknesses," Kobayashi-Hillary wrote.
In addition, if you make the trek to visit a potential partner, keep in mind that the trip need not be too long; a day or two will give you a good sense of the location, the overall motivation level of the team, the commitment of the leadership team, the state of the physical infrastructure and the overall professionalism that the location reflects.
5. Make a decision and then communicate.
Just because the MSA and SOWs are signed and you are ready to get started with your chosen software outsourcing partner, doesn't mean your job is over. Your vendor-partner faces the same pressures remotely that you face locally: Good talent is hard to find and hire. Understand that it could take some time for your partner to put together a team.
Once the team is finally set up, you can expect about two additional months of ramp-up, accompanied by supplementary investment for the new team to learn the ropes and adequately understand your business. Short sprints can help accelerate that training and give you a better idea of what it takes to put code into production. As the team is learning, take the time to iron out the best communication structures and mechanisms to raise red flags with your partner.
Communication can be difficult when you're working with remote teams, but Mike Galarza, CEO of the cloud-banking and finance platform Entryless, suggested to me -- during an interview we had -- using tools like Asana, Skype and Github to facilitate communication for software outsourcing projects. "It is crucial to be super-proactive on the communication side, since we are far away and not physically present," Galarza said.
Shamim Mohammad, CIO at used car retailer CarMax, pointed out an additional detail to consider. "When managing deadlines and projects," he wrote in CIO.com, consider potential resource and technology challenges that might emerge."
He continued, "Make sure there is time allocated for undiscovered work, and develop a contingency plan for it. Lots of projects assume a happy path, but do not plan for unanticipated and undiscovered work, which will inevitably happen."
With the wide availability of software developers across the world, it's easy to be overly eager in rushing to choose a partner for your project. However, the decision process must be carefully executed in order to find best fit for the task at hand. With the right decision and a little bit of luck, you too can be on your way to building the next software unicorn with the help of the right offshore IT partner.