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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