A blog about software development best practices, how-tos, and tips from practitioners.

5 Cs of Offshore Success

5 Cs of Offshore Success

The success of any offshore project is equally important to both the outsourcer (customer) and the outsourcing partner (vendor). But, in cases when the client/vendor relationships turn a bad turn, doubts about the suitability of outsourcing usually arise, though most often the issue is simply one of an inappropriate choice of vendor partner or uncertainty in opting for an outsourcing partner.

Let me give you a first-hand experience, I just got off the phone with Eric, an old friend of mine and an owner of a FinTech startup in Austin. They are doing very well, and who knows his company’s products may become a part of our everyday lives pretty soon. After 30 minutes of discussion of his great project idea and the business model we dove into technical aspects. This is when I realized that my friend’s technology stack selection was far from innovative and his SDLC, a one from the stone age.

What I found even more unusual for this stage of the game was a heavy utilization of offshore - Moreover 70% of his development workforce was based offshore. To top it, he wasn’t even certain about this decision. Stunned, I asked him about the reason behind making such an uncertain move.

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        Eric’s motivation for using offshore was very common – bootstrapping the company with the current local salaries is almost impossible for a startup or a small business, besides finding local talent is difficult and an extremely time-consuming task, especially, getting agile web development skills.

So offshore seemed like a sensible path to take – no matter how uncertain!

After getting a deeper insight into his side of the story, I realized that most small and medium businesses pick the wrong outsourcing partner and often go through a lot of “bad” and very little “good” experiences with offshore and end up labeling the unsuitability as a failure of outsourcing.

One way to go about this maybe to take help of a small advisory firm to find partner and manage the offshore relationship. But that is not the key to success.

Check the blog that describes Easy way to set up an Offshore Development Team in India

What makes small business and startups like Eric’s successful in using offshore are the 5 Cs listed below -

1. Clarity

Often, small business owners outsource their software development projects without having the exact goal in mind. Just having a vague idea makes it quite difficult to set clear requirement specifications for the outsourcing partner, as well as to evaluate whether the process is headed in the right direction.

Basically, a requirement is how two (or more) parties have chosen to express their agreement regarding what is required from a software application. Usually the assumption that all parties have the same interpretation of these written words quite often proves to be false. In fact, different stakeholders have different ideas in their minds about the same exact words, and are confident that others share the exact same vision as they shake hands over the agreement. If only we had super powers ala Professor Xavier of X-Men, a lot of our requirements issues would be gone.

Let’s hope we develop such mutant like capabilities in the near future. Meanwhile, here are 2 most important things you can do –

1. Know exactly what your goal / objective is

2. what results /outcome you expect from the engagement – in a great level of details.

2. Conviction

Over decades, corporations have sought to reduce costs by contacting traditionally in-house services and activities. The rationale being simple and highly lucrative, especially for small businesses – cost-effectivity! If contracting something out turns out to be cheaper than doing it yourself, outsourcing is the obvious choice. Outsourcing saves you money and also increases the efficiency as the partner is usually an expert at the outsourced task. The benefits are obvious. Nevertheless, some SMB owners are skeptical right till project completion.

However, to get the maximum out of your outsourcing engagement, you must completely trust your decision be absolutely sure that your partnership with the outsourcing firm can help you achieve your goal / objective.

This confidence can be gained by conducting a thorough research and analyze the what-ifs to the minutest detail and then move forward.

3. Commitment

While the issue of commitment arises at an early stage in the vendor selection process, commitment should ideally evolve into an engine that drives parties’ subsequent intentions as well.

However, as in relationships based on trust and commitment, not all outsourcing relationships work well. The participants may find themselves wishing they had planned better instead of exclusively relying on trust and commitment. If the partnership deteriorates the results will be higher costs, disruption in operations and lost business opportunities as well.

Nevertheless, “No relationship is perfect” the same holds true for the relationship between you and your outsourcing partner as well. It is essential that you put the effort required from your end wherever necessary, to achieve your goal/objective. There will be problems, but don’t let them deter you from the path you’ve chosen.

After all, unless a commitment is made, there are only promises and hopes but no plans.

4. Consistency

Software development outsourcing engagements are stereotypically long-term relationships; depending on the scope of the project. In fact, it is not unusual to have a contractual term of over 10 years.

Therefore, it is important to maintain a level of consistency with the key players on both sides of the deal. Moreover, not only is the vendor intimately involved in the developing the company’s product but is also interacting with company personnel on a daily basis.

Maintaining a consistent team nurtures efficient collaboration and trust between the company and the outsourcing partner.

Moreover, the sure shot path to success in any outsourcing engagement is to execute with persistence. It pays well to keep your eyes on the ball. It is also important to not drop best practices, even though they may at times seem to be nothing but redundant overheads.

5. Collaboration

Collaboration is the key to outsourced software development. Collaboration does not merely mean dumping your software product development on the contractor but working together in planning and implementation. Outsourcing is basically a ‘double-handshake’ phenomenon, that is, even if you hire the most qualified outsourcing vendor, you cannot guarantee that the product will turn out to be a successful one.

Efficient collaboration becomes even more crucial when outsourced product development happens across thousands of miles between the outsourcer and the vendor. It requires both a mechanism to allow seamless, transparent communications and, more importantly, trust between the parties. Yet, sometimes SMBs tend to make some fatal mistakes.

While it is necessary to consider the 5Cs to ensure offshore success, one must also consider that each factor would differ based on the requirement of that particular project and the engagement models. Doing your best to adhere to most of these factors will ensure that you form a thriving long-term partnership and reap maximum benefits.

In the meantime, let’s pray that Eric has luck by his side.

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