Computerworld UK published an article in April saying: “Outsourcing Not the Big Savings Firms Expect, Study Says”. Summarizing, the recession is pushing businesses to cut the cost of their software portfolios, but most companies overestimate the savings that offshoring can deliver, as presented by CIO.com. On the other hand, I firmly believe it is possible to save costs if you follow the proper approach.
Companies seem to be rushing to outsource their software development for quick savings. This always involves some amount of risk. Unplanned outsourcing could lead to significant losses in productivity because the receiving developers do not fully understand all business requirements from day one. Besides, managing the outsourced project demands different skills than are, in general, required at the outsourcing company. A potential disaster might be born.
Need for both demand and project management underestimated
The management of an outsourced project shouldn’t be underestimated. Especially in the beginning, you will need to pay a lot of attention to informing the service provider and its developers. They need to be aware of the business logic before they can show their added value. This needs investment from both sides. Unfortunately, it is often the case that both parties seem not to be aware of this approach.
Mutual investment is what we preach
The above is the reason that we try to invest a lot of time in understanding our client’s request. We translate their requests into designs (graphical, functional and/or technical) to show how we understand their needs.
Outsourcers seem not to understand the need for up-front investment
Unfortunately, a lot of outsourcers seem not to realize the value of this phase. Most of the outsourcers seek instant results. They think their specifications are fully clear. Yeah, to them they might be obvious, but that does not necessarily mean that every developer will understand. I even start getting the feeling that outsourcers just don’t understand the whole issue, or they just don’t care. Let me share a recent experiment.
Some time ago we started looking for projects on sites like Rent a Coder, Guru.com and Get a Freelancer.com. Some of the requests at such portals are really simple and probably do not need any additional discussion, but we found several projects that we wouldn’t advise to start without a good common understanding by all parties. To challenge the outsourcers we sent several hundred replies that we would prefer to discuss their request to make sure that we are both fully aware of what needs to be done. How many replies do you think we received? Just one out of several hundred messages. This person understood our message and after a talk, he had to agree that he underestimated his request.
It seems to be too hard to specify needs
Maybe we should not treat the above experiment too seriously, but at least it reveals the ignorance on the part of outsourcers. Last year at the Baltic Innovation Forum in Gdańsk I had the opportunity to meet a lot of Indian software providers. They all agreed that the specifications they receive for most of the projects (from Western companies) are not clear enough. What is more, they confirmed that in many instances their developers start working on these projects without properly understanding the request. This combined with little “demand management”, meaning managing in a way that you get what you need, at the client side makes such a project doomed to failure.
A good result requires a good start
In our daily operations, we see all kind of different clients. Some of them realize that they need to invest to get the best out of the outsourcing relationship, others just don’t. Of course, we try to convince them, but to be honest we do not always succeed. The first type of projects is, in general, the easiest to manage. The latter ones need a lot of management attention to make them successful, that is on time, within budget and satisfying the client. From time to time I really think we are too service-oriented because sometimes this is a really hard job. But in the end, I believe it is better to have a satisfied client. There is too much bad news around outsourcing. We want to show the opposite.
Upfront investment pays off
With a little help and understanding from the outsourcer’s side outsourcing software development would be a lot easier, much more cost-efficient and for sure more pleasant for both sides. Our consulting and outsourcing experience has shown us that the more time and effort is spent on preparing the outsource project, the better the chances for a very successful project. Just give it a try and hopefully, you will agree.