Dos and Don’ts of Software Outsourcing

Outsourcing software development can be a great way to save your company or organization time and money. However, if done haphazardly, it can also become a source of great headaches. It’s easy to make common mistakes, such as not clearly defining goals or expecting the process to magically produce results. It’s much harder to manage the process and see that it achieves the results you desire. Here are some dos and don’ts for you to consider as you get involved with software development outsourcing.

Do Define Your Goals and Metrics

One of the hardest things for any outsourcing services provider to deal with is a moving target. It’s important that you have clear planning documents in place that outline the goals for each project. Likewise, you also need to use clearly understood and widely trusted metrics to measure the success of a project. If you and your outsourcing provider agree on the measures of success, there’s a much better chance you’ll hit your target.

Don’t Fire and Forget

Handing a pile of specs to an outsourcing firm does not count as passing the project along. The process is inherently collaborative. It’s important that everyone on your side, the client side, stays engaged. When mockups come in, check them. When requirements are reportedly fulfilled, verify them. If errors occur, correct them. Do not plan to hand off the specs and just come back months later expecting to see a finished product.

Do Put Processes in Place

Every aspect of your project should have a clear process in place to ensure that both you and your outsourcing company understand what it means for a step to be considered complete. This means verifying that mockups are passed along and that both parties sign off on each step. Requirements for each stage should also be outlined clearly, and all parties involved should agree to them. Nothing dooms a project as fast as an ambiguous understanding of what it means for a step to be truly completed.

Do Communicate Well

This can be trickier than it sounds. Even if you’re running a North American firm that’s outsourcing to another firm on the continent, time differences matter. If your vendor doesn’t have flexible hours, then you’re likely losing collaboration time. For example, if a company in New York City is outsourcing to a firm in Vancouver, it’s important to know that the Vancouver folks are prepared to have someone show up early on some days to touch base with the New York crowd before the work day gets rolling.

Don’t Judge on Price Alone

One of the greatest temptations of outsourcing software development is to simply take the lowest price offered. This is a terrible idea. There are many tradeoffs required to get to the lowest price. Will you be dealing with people who speak your language natively? If the vendor is on the other side of the planet, will they even be able, at that price point, to have someone communicate with you live at a convenient time?

Do Expect a Performance Curve

If you’re beginning your first project with a specific vendor, it’s unrealistic to assume they will be able to just hit the ground running. Every outsourcing firm requires time to make sense of your company’s culture and figure out the best way to achieve the results you seek. Getting frustrated by this process can be very costly. There’s little benefit that can be expected by bouncing from vendor to vendor. Give vendors time to acclimate.

Don’t Outsource Core Functions

Some parts of your company just have to work. The best way to see that your operation works the right way is to ensure that core functions stay in-house. For example, if you ran a vinyl sign company, it would be insane to outsource your graphic design work. On the other hand, it might be perfectly reasonably to outsource backend coding for your website.

Do Prepare for the Future

No matter how strong your relationships may be with your current set of vendors, you need to know the market and be prepared for the future. If the day comes that your preferred vendor can no longer handle the scale of your work, you want to have a list of vetted alternatives in place. You can lose months of project time trying to find a new vendor.

Don’t Use Outsourcing as a Stopgap

Adding an outsourced software development team to your organization means incorporating it on a long-term basis. If you drop a project on an outsourcing company and then turn around expecting in-house people to maintain or even expand it, the results will be rubbish. It will may foster discontent among the in-house team. Look at long term partnerships where certain projects or tasks stay with your outsourcer and others stay with your in-house team. Your guys handling the outsourcing on your software will then become comfortable dealing with your in-house people handling core functions, and vice versa.

Don’t Rely on Technology Alone

There’s a lot to be said for getting in at least one face-to-face meeting, ideally more as required. Your vendor and you can both demonstrate commitment to the project. You also can interface more quickly. If at all possible, try to make in-person meetings part of the process.

Conclusion

Outsourcing is an amazing tool for any company to have access to. It is important, however, to appreciate that it’s not magical. It’s a process that your organization has to fully accept and integrate. With the right checks and balances in place, you can ensure that your outsourced software development efforts achieve the results you want.

Ultimately, successful IT outsourcing comes down to finding the right partner that fits with your organization and IT needs. Optimus Information has become a trust partner to companies of all sizes and in all verticals; we know what works and doesn’t work when it comes your your IT challenges and working with your organization. 

Contact us today for your next IT project. We’re always happy to help.

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Tactical Outsourcing vs Strategic Outsourcing

The term outsourcing scares people for various reasons, but there is no reason that it should. Outsourcing is very effective for certain situations, especially when developing software solutions. For a company to grow its internal IT department, it must search for a qualified candidate and go through the long process of interviewing, hiring, and training the new employee. This can take a long time and cost the company a lot of money. The alternative to this is outsourcing.

There are two main types of outsourcing that you can find for your IT needs: tactical and strategic.

Tactical Outsourcing

Tactical outsourcing refers to hiring a firm to perform specific development functions as part of your existing software development process. You retain oversight of the project, giving you more control over the process. This is very helpful if you need a project done on short notice because you can avoid the long process of searching for the right candidate.

Tactical outsourcing is also helpful when you have a short-term need for a highly skilled developer in a specific technology that you do not normally use. A developer with the right skill set may be very difficult to locate, so going through a skilled tactical partner can mean fast turnaround and lower overhead than hiring internal resources.

With tactical outsourcing, you maintain the planning process, including gathering requirements from stakeholders and designing the system that the developers will create. This increases management overhead, but it also allows you to have more control over the process and more knowledge about what is happening. They are familiar with your processes and answer to you throughout the process.

Strategic Outsourcing

Strategic outsourcing involves partnering with an IT company that provides top-down services. They handle the entire planning and development processes, leaving you free to focus more on other aspects of the business. This is nice for some companies because they are able to pay prices per project instead of per hour of work.

With either type of outsourcing, you should address a few key points with your prospective outsourcing partner. The first is documentation because you never know what could happen in the future. If a support issue comes up or you need new functionality added to an existing product, you will need proper documentation to know how the product is supposed to work. Ensuring that your partner provides proper documentation, both in the code and out, can be vital to handling these situations.

You should always provide full technical information about your requirements to your outsourcing partner. Leaving out any details could cause severe problems as you go through the process. Always remember to include all of your key decision makers and stakeholders in discussions to ensure that everybody’s goals align properly. Repeated changes over time can greatly increase the cost of any project, so planning everything up front is vital to a successful partnership.

You should always examine your prospective partner’s portfolio, looking for consistent, high-quality performance over time. Not all outsourcing companies are equal, and even great companies may not be the right choice if their goals do not align with yours. It is also important to note for what industries the company has worked. If the company has worked for other companies in your industry, it could mean that they are already familiar with many of your processes and terminology, making communications much easier.

Conclusion

Both outsourcing solutions could work for you, depending on your situation. Many companies prefer tactical outsourcing because it allows them to maintain more control over the process and usually means less of a commitment. However, the trade off is significantly more involvement from the client. 

At Optimus, we find there is a lot to gain from ongoing strategic outsourcing partnerships, and clients typically reap more benefits: less hands-on management, higher quality work, faster delivery and greater flexibility.

For an in-depth look at strategic outsourcing, check out our guide.

Download our Guide to Strategic Outsourcing

 

What to Look for in an Outsourcing Partner

Bad experiences with outsourcing providers are often traceable to badly designed selection processes or the use of deficient selection criteria. Whereas, you can find ample guidance online on how to build a robust selection framework, we will share the most important vendor attributes for comparing and contrasting outsourcing companies to ensure you select one right for you.

Sizing a Vendor to Your Project

When optimizing the capabilities of an IT provider to your project, size matters. If your organization can fund nine-figure deals, then the number of companies to field such a deal is not large, whereas for smaller projects you have a lot more choices.

The key is to find a provider of a size that will consider your deal to be a big deal. This significantly increases the odds that your project receives the attention it deserves by having their most talented staff assigned to it. Additionally, right-sizing usually provides meaningful accommodation in contract terms and professional treatment from the executive staff.

The risk of choosing an outsourcing company that is too small, however, is that they may not have a sufficient level of technical capabilities, skilled staff, certifications or experience to deliver what you hope to accomplish.

Local Presence with Global Delivery

If your company is based in North America, then choose an outsourcing vendor whose headquarters there. They will better understand your industry, business model, goals and processes since you are working within a similar cultural context.

Your company also benefits from local contractual protections should your project hit a serious speed bump. It also provides the distinct possibility that they can provide onsite staff at your site, which improves communication and timely escalation of critical issues.

However, vendors that also provide delivery from offshore will save you money. Furthermore, vendors with a global presence could directly interact with your own global sites and offer the possibility to add shifts in other time zones that work collaboratively with your local staff, which provides you with 24-hours a day of development.

Consistency in Quality and Delivery

Until recently, the majority of IT outsourcing firms sold themselves mainly on cost and based contracts on hourly rates. These days, more companies compete on their ability to produce results. Those results should include both timely delivery and measurably high-quality products or services.

During your due diligence, evaluate the vendor’s past work and pursue references to gauge how well the vendor has delivered on their promises. Have a detailed discussion with their senior staff about how their corporate culture reinforces the importance of on-time delivery and high quality throughout the ranks.

When you are convinced they will deliver what they say they will, it is still prudent to start the relationship with one or more smaller projects of a few months in duration to validate their work and timeliness for yourself.

Communication Capabilities

Well-planned, thorough and frequent communication is critical when using an IT outsourcing vendor. This goes double if the company you select has offshore resources, since both time and language may present communication barriers.

How much, when and how you each of you communicates with the other should be driven by the client. Both sides must identify primary contacts for specific areas. These people must have seconds in cases where the primary is unavailable. Daily meetings with program and development managers are not unreasonable as are weekly meetings with BDMs or department managers. To gauge frequency, ask yourself how much time you can afford to lose should a process go astray.

Vendors uncomfortable with your communication plan should raise a red flag with you, since this is such an essential element in your business relationship.

Their Range of Skill Sets

Except for the largest IT organizations, most companies do not have all the personnel with all the right skill sets for every project. When evaluating vendors’ technical and process capabilities, strike a balance between broad and deep skills that align with your business and project needs.

If you hope for the vendor to work on more than one type of project or you wish to establish a long-term relationship, then one with a broader range of skills may work out better in the long run. A possible drawback is that a project comes along that is a mismatch for the vendor’s skills and quality suffers.

Many enterprises today recognize that one size does not fit all, especially when working with small to mid-size IT outsourcing companies, so they choose to multi-source these services. This can complicate internal management of vendors, but often the point solutions that smaller vendors provide are of higher quality, with faster delivery and at the same or lesser cost.

Conclusion

Proper selection of an IT outsourcing vendor will significantly augment your company’s strategy and operations. Lack of due diligence, however, often leads to negative consequences plus lost time and money.

Use the selection criteria above along with a robust process comparing business requirements against each company’s pros and cons. This will lead to asking the right questions and building a seamless working relationship with a talented development provider.

The Optimus Information model is designed to allocate the right mix of local and offshore resources in order to optimize expertise, speed and cost. We provide the ability for development teams to quickly add specialty skills to a development team without incurring long-term costs.Our successful track record speaks for it’s self, and we love to share past work we’ve done. Our global team is made up of a diverse range of experienced professionals, allowing us to work on complex solutions requiring a wide variety expertise. The result for our customers is the capability to far better manage resource capacities and outcomes.

Contact us if for your next IT project. We’re always happy to help.

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Top Ten Software Development Outsourcing Trends for 2016

Originally, the primary motivation to outsource software development was to achieve lower labor costs, but continuing and emerging business and technology trends in 2016 are leading to new client requirements on outsourcers. When choosing an outsourcing partner, more and more businesses are looking for closer alignment to their business goals, flexibility demands and quality requirements.

Thus, clients are evaluating outsourcing companies via increasingly sophisticated criteria. The smartest software providers are reciprocating by developing new service models while taking advantage of many of the same technologies driving these current trends.

1) Moving from Hours to Results

In order to ensure that enterprises are getting what they need for their money, most are now seeking out providers who operate on a results-driven model versus rates based on time. Furthermore, clients are demanding that payment schedules be based on satisfactory achievement of those results versus upfront fees or retainers.

2) Greater Flexibility

Clients are looking for providers who provide on-demand services without locking them into long-term contracts or volume commitments. This enables client companies to respond more efficiently to rapidly changing market demands. In response, development providers who are moving operations to cloud resources are the ones most likely to adapt to the increased demand for flexibility.

3) Utilization of DevOps Practices Continues Apace

DevOps continues to attract adherents as it goes mainstream in up to 25 percent of companies this year, according to Gartner. Most of the IT departments in these organizations are transitioning to a service center model. Service providers who already operate in this manner will more easily blend into these organizations’ processes and decision-making apparatus.

4) Security Risk Perception Increases

A key concern within any outsourcing strategy is security. With the growing presence of the Internet of Things and the potential for an exponentially larger attack surface, software development outsourcing companies must ensure that their own security vulnerabilities are addressed in a manner that will win the confidence of client decision makers. Demonstrating solid track records and establish policies is of high importance when selecting a vendor.

5) Managing Infrastructure as Code

Amazon’s AWS has enabled the application of software development change management systems to development and deployment infrastructure. AWS is dedicated to making this paradigm increasingly easier with new APIs and services. Outsourcers who adopt this practice are reaping large benefits in their software support, testing and deployment efficiency by synching servers, storage and networking infrastructure to precise versions of the source code.

6) Multi-Sourcing Technologies Impacts Integration

Client companies are utilizing a more complex mix of software products and services this year. This multi-sourcing of technologies presents in-house management challenges, and a rise of new vendor management offices. The challenge for software providers is meeting new performance and integration standards from VMOs. Compliance failure may result in the outsourcer being dropped in the interests of streamlining operations.

7) Business Process Outsourcing Being Replaced by Robotic Process Automation

The software outsourcing industry in 2016 will continue to feel the influence of the rise of RPA. In fact, one of RPA’s touted benefits is the reduction of outsourcing, especially via cloud-based RPA services. Those outsourcers who can adapt by offering relevant automated services in the most responsive, scalable and efficient manner are the ones who can survive and profit from this trend.

8) Outsourcing Selection is Speeding Up

Along with the adoption of agile methodologies within software development, business decisions are also being made with more agility and higher velocity. Outsourcers will increasingly recognize this trend as more clients endeavor to close smaller deals faster in order to stay ahead of their competition.

9) Adept Companies Are Being More Selective with What They Outsource

Many organizations who originally turned to outsourcing to compensate for a lack of internal expertise and resources have grown more sophisticated over time. They are progressively learning to be more selective regarding what to do in-house versus handing off to an outsourcing provider. Organizations are looking deeper into what their core competencies are and what they can outsource to make themselves more efficient in-house. Their motivations are usually the desires for greater flexibility, responsiveness or cost reductions, all of which software providers need to be sensitive to in contract negotiations.

10) Outsourcing Company Accommodation Increasing

It is no longer the case that companies seek out only the lowest cost provider. Sophisticated outsourcing companies will respond tactically and strategically to all the trends discussed here to grow or to survive. This trend can be seen in the greater tendency for outsourcers to adapt and adjust terms or offer new services in an effort to deliver the best product and service.

Conclusion

The outsourcing industry is more fluid than ever this year with clients focusing less on price per se and more on results, quality, integration, security and agility from software development providers. As you adapt to your own fast-moving markets and the rise of paradigm-shaking technologies such as IoT and on-demand infrastructure, so do we. Optimus stays two steps ahead in order to support your business in all your software and IT requirements.

At Optimus, we consistently stay on top of these trends while leveraging the forces driving them to bring you the solutions you need. Contact us to help with your next development, testing, cloud, BI or mobile project.

info@optimusinfo.com
604-736-4600

Microsoft BI Gold Partner

What are some benefits of working with a Microsoft BI Gold Partner?

Recently Optimus Information was certified as a Microsoft BI Gold Partner in Vancouver, British Columbia. This new partnership provides many benefits and opportunities for our clients, which include:

  • Firstly, access to Microsoft software and in-depth product information that helps to guides clients to the right tool and strategy for their Business Intelligence initiative.
  • Secondly, various training materials, which help facilitate workshops on Microsoft’s platform and tools with the client.
  • Virtual labs and independent study resources that can be used as reference points when discussing a client’s technical problem.
  • For any client-related technical issues, Microsoft offers a specific number of hours of Technical Enablement and advisory services from Microsoft consultants.

Additionally, clients will find it cost effective to engage with a Microsoft Partner that provides umbrella services (i.e. .Net development, BI, etc.), instead of hiring an individual for each requirement.

Microsoft’s definition of a Gold Partner:

“Gold competencies demonstrate your best-in-class expertise within Microsoft’s marketplace. Earning a gold competency is evidence of the deepest, most consistent commitment to a specific, in-demand, business solution area, along with the distinction of being among only 1 percent of Microsoft partners worldwide that have attained this outstanding degree of proficiency.”

Furthermore, OptimusBI has extensive experience, ranging from reporting services to data management, helps clients set themselves apart from their competition. To provide world-class service, we adhere to a proven methodology. We provide a superior client experience, and become a true business partner on every project. We bring a broad depth of industry, business, and technology experience to projects. Lastly, our team focuses on customer satisfaction, productivity, and quality of work. OptimusBI views our Microsoft Gold partnership as an integral part of our offerings.

 

Note: This blog post contains new and recent information on the topic.