Monday 6 May 2013

Whether Sheffield or Sri Lanka your development team has to be onsite

You probably read the story earlier this year about an American software developer, who outsourced his entire job to a Chinese firm. He paid them 20% of the salary he was earning and instead spent his days sat around the office watching ‘cute cat’ videos on YouTube. Whilst one or two of you may have shaken your heads in disbelief; I bet many more applaud his ingenuity!

This type of incident is probably a one-off, but it raises the question about monitoring your outsourced developer and whether they can reasonably and responsibly outsource part of your system. Regardless of where in the world they are; do they need to be onsite in a controlled environment or can they be a freelancer sat working from a bedroom?

As a client, your decision to outsource your software development- is of-course- a strategic management decision and not just another way to cut costs. Apart from lowering costs, it enables you to achieve business objectives through operational excellence, making best use of expertise and reduce pressure on existing resources. But whether it is Sheffield or Sri Lanka; how do you ensure you’re not being exposed to unnecessary risk?

One of the things that set Synetec and other quality providers’ apart- is that we never outsource. We believe it is necessary to work closely and in partnership with our clients, to ensure the best solution. All of our development is done in our London offices and we are always available to meet in person or at the end of a phone, should you want to talk. Your data is safely and securely managed. Employees don’t go home with data; they don’t send confidential data via email and new starters and leavers are rigorously managed. This clarity is part of a company culture that encourages transparency and excellence.

Here are 6 key things to consider:

1. The importance of being there
Never under estimate the value of not only being able to keep an eye on ‘what’s going on’ but also of direct human interaction and the opportunity to share thoughts and ideas.

2. Have you considered the hidden cost?
IT ‘offshoring’ may entail extra hidden costs, including things such as international travel expenses, out-of-hour costs when working across time-zones and developing infrastructure to support off-site operations.

3. Have you done your due diligence?
If you were investing £100k in shares- I’m certain you’d research whom you were investing in. The same applies to your developer; don’t just rush to get someone in at the sacrifice of due diligence.

4. How does your contractor fit into your business?
If you don’t have a direct relationship with your developer, how do you build a relationship? If your developer doesn’t care about your business, they’re probably not going to put their heart and soul into the project. You have to accept, that a better more lasting relationship, might cost more but in return produce longer-term quality and support.

5. Does your data output meet required standards?
Whilst some financial services software may not have to comply with any regulatory standards, the system may be required to produce data that does. Are you prepared to gamble your businesses reputation on your developers’ integrity?

6. Operations and logistics
As in any contractual relationship, there is always the quality-of-service risk. Many offshore sites are characterized by high rates of employee turnover and poor starter and leaver processes. Vendors may also take advantage of poorly worded contracts or lack of technical knowledge, to try and get round deficiencies.

Conclusion
Regardless of whether it’s your HR, finance functions or software development, when you outsource any work to another organisation, there is a degree of risk. Add in a different geographic location and you cut down on the opportunity for face-to-face interaction. Take it further abroad and different socio-political environments, business cultures and ethics, all mean that risk is inevitable.

These risks can however be managed by working closely with the developers and monitoring through benchmarking and regular audits. Moreover the most powerful risk management tool is approaching your outsourcing as a long-term partnership.

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