Software Outsourcing Works Differently Than You Think
Outsourcing companies are usually viewed as a mere manpower reservoir, with no stance of their own. The discussion whether outsourcing web development services (especially to the developing countries e.g. in Eastern Europe) is a thing of the past or not is still ongoing and I’d like to add my opinion as a professional dealing with web development for about 7 years and leading a team of web developers for 4 years, and also as a businessman talking to and working with numerous Magently clients.
Is Outsourcing Really Over?
From my point of view outsourcing still works, but in a different way than 10 years ago. The service sector keeps evolving and we need to keep pace with it. The market laws don’t change, but the business conditions and the needs of our clients certainly do.
Is Outsourcing Shedding the Responsibility?
A common objection to outsourcing is that the goals of the client and the outsourcing company are radically different: the client wants the project done on time and within the budget, while the developers, who need a stable cash inflow from the client, deliberately impede the work or do not work as effectively as they could have.
Is it so? Not really. Today, if a company treats their clients like cash cows, it usually doesn’t get very far. Such approach results in failed projects, unhappy customers who never come back, delayed payments and refunds.
Is Outsourcing Profitable for the Customers?
A good project requires cooperation from all parties involved. It has to be properly executed, well-managed and the clients must be kept in the loop from start to end. What’s more important, however, is that a good project is a commercial success for the client. If the customers are satisfied with our work, they feel they profited from the cooperation (the sense of money well spent is crucial if you want to keep your customers happy), spread the word and they simply come back.
This is true for virtually all businesses, from corner shops to shoemakes, restaurants and web development companies.
Is It All About Money?
All businesses also know that there is always a budget and a deadline and that balancing the two is not always that easy. It is especially true for web development companies, where the projects sometimes tend to take unexpectes turns. Having managed a group of developers at Magently for a while now, I know that the projects thet get drawn out with no good reason are a recipe for total disaster and a massive loss for the company. It’s in our best interest to sort out the documentation and explain everything to the clients at the pre-sale meetings so that they know what they’re paying for, what they’ll receive and what they can expect from our partnership. Any other approach would be very irresponsible and I sincerely believe I’m not the only one in this business to think that way.
The key to success is a strong, trusted brand and such brand is built on great products and/or excellent services. Lying to your customers or ripping them off will lead you nowhere, because with such fierce competition on the market nobody will stick with you.
The Times Are Changing
Having said all that, I want to return to what I mentioned at the beginning: the times are changing and so is the way outsourcing works. The economic situation in the countries previously famous for their cheap manpower has changed and the hourly rates have increased.
The companies in the developing countries became more ambitious and now they can compete with almost anyone in the world. They are not just manpower, they are a real alternative with equally good marketing, ideas, design, language proficiency, etc. This way they skipped one stage in the process and started to cooperate directly with the end clients. They understand the experience economy, because they read the same books, take part in the same conferences and share the same knowledge — they are simply located in a different place.
This is the progress of outsourcing: now you don’t search for a company that will speak with a foreign supplier on your behalf, but you speak directly with development companies, because they have matured and are ready to step in. I am sure that this is the reason why the companies that previously used cheap workforce from abroad now believe that outsourcing doesn’t make sense. They are right — it doesn’t work for them, because they are not the target group anymore.
Outsourcing Done Right
Finding a good outsourcing company can be challenging, though. How to choose the right one? Here is what your perfect team should be able to do:
1. Understand
You need to find some talented people (that’s always a must) who understand the business. It’s not only about understanding the functionalities you describe, it’s crucial that they know what’s behind them, what they are for and what are the expected effects. Therefore, seek for the companies that hire both talented developers and agile communication and project managers.
2. Cooperate
Always look for the people whom you can consider your real business partners. If you treat them as equals, not just as your employees who follow the orders, you will clearly benefit from the cooperation. They have the experience and can suggest you what to do and what to avoid.
3. Plan
It’s also essential that the people you cooperate with have a plan, a clear idea on how the work should be carried out. Brainless coding without asking a single question is not the best way of developing large and complex projects. Your developers and project managers should listen to your requirements and be able to suggest, for example, to divide the project into stages.
4. Discuss
Avoid the companies that follow your orders without discussion. Appreciate it when a developer wants to discuss an issue with you, even though at first it may seem to delay the work.
Conclusion: Where Are We Now?
To sum up: I don’t think that outsourcing is dead by any means. I believe that it has changed significantly and will continue to evolve. The outsourcing companies have come a long way from cheap manpower to equal partners in the discussion and in today’s world your location doesn’t limit you in choosing the talented people you want to work with.
Of course the above list is only the starting point — each company has its own requirements and it may actually turn out that you need a separate team for each project. If you haven’t worked with anyone abroad yet, don’t worry — the globalisation did its job. Apart from some cultural differences (like different ways of refusing, managing a discussion or negotiating), we’re on the same page. However, if you and your team are in different time zones, project management can be challenging, but almost all obstacles can be overcome with enough good will and patience on both sides.
