Offshoring for solution developers and VARs

Nick Rowley offers tips on how small ISVs can reap the benefits of outsourcing overseas

Rowley: Small solution companies can benefit from offshoring, too

It’s now the turn of the smaller ISV to reap the benefits of offshore outsourcing. Tapping cheaper labour overseas isn't just for large companies anymore.

If you are an SMB, are looking for a flexible workforce trained in the current broad spectrum of multidiscipline technologies, outsourcing overseas can work.

However, it is important to do your homework before jumping into the unknown. A good starting point is to talk to your peer groups, your customers and other technology partners to get a feel for their experiences – both good and bad.

An offshore outsourcing partner must demonstrate real knowledge and experience. It is absolutely crucial to be thorough and diligent in your investigations of potential partners.

Interrogate them about their experience in the market and ask if any of their staff have ever been on-shore. Ask about their previous projects and customers.

In their human resources department, look at their staff turnover and ask what their cultural appreciation is like, particularly if they should need to come on-shore to a customer site in the latter stages of a project.

As an ISV, you may well be considering two distinct types of engagement:
• Development of your product; and
• Development work on a customer project.

Time, effort, quality and the resulting costs will be unknowns at first and so need to be evaluated seriously. Ideally, start with a low-value, low-input project to test the potential offshoring partner’s ability and processes.

Before embarking on a project, it is essential to set out clear areas of responsibility, and understand where your partner’s services start and end. Find out if the partner is truly customer-focused and committed to quality.

Ideally, both the ISV and the outsourcing partner should be jointly responsible for the risk, so agree up front how you both want to share the value of the project.

I found that two of the main issues – quality and consistency across all disciplines – were needed to maintain the required standard of work.

It is important to have well-defined and easy-to-follow processes that are clearly documented. You also need to step up to the management challenges and be prepared to supervise a project’s progress closely.

Don’t sit back and expect your outsourcing partner to guess what is needed.

When you generate an outsourced team, try to keep them on the project as continuity for your customer is important. Visit the offshore teams regularly to make them feel part of your organisation.

When you tread carefully, there is no reason you can’t achieve great value from offshore outsourcing and gain benefits that have traditionally been the domain of the big boys.

Nick Rowley is managing director of Oceanus