After a long team discussion, Mr. Jim Collins, owner of a FMCG company in UK decided to hire a software development outsourcing company for IT projects. It took him two months and a series of evaluation rounds to give a green signal.
Result: After six months, his company saved $1.2 million on costs and found a great partner.
You must be thinking what has he done right? Your doubts will emerge, as outsourcing has got a bad name. But there are stories like JIm, that will force you to think otherwise.
You can also succeed in finding a partner after looking at different parameters. In an annual meeting, his team invited the IT partner and gave a press conference to the media for the successful product launch.
The excerpt from the interview are as follows.
Why did the need arise to hire an outsourcing software development company?
[Jim]: We are in FMCG business. So, focusing on core business helps us save operation cost. Also, there is no point in wasting time or setting up a team when it is not your USP.
We have joined hands with Almiga Solutions, to help solve our IT and software development challenges.To be the leader, you need to be fast to bring innovation to the market and take customer feedback seriously.
This is a key aspect in determining your success. Our software outsourcing partners can manage the software and IT related task efficiently as we grow our market overseas.
What was the first step you took when you floated the tender?
[Jim]: My IT Manager, Sherry Jacobs is an astute professional. She made a point to share the project specification. She wrote down the technology stacks and industry experience needed to build the software we needed.
We floated a RFI (request for information) with our criteria and problem statement they need to address. This was made public via our announcement on social media and official website page.
We asked vendors to write a 1000 word essay on their understanding of the product with a solutions diagram This is the first step in unlocking the key for finding the right offshoring company.
Excellent, how did you then proceed with the hiring process?
[Jim]: We gave them a challenge and set our evaluation parameters on the following
- Teams that have relevant knowledge on technologies listed.
- Testing/Debugging Skills
- Version Control or backup process
- Development environment used
- Coding Standards
- Requisite domain experience
We have put a stringent process in place. Any vendor who falters gets rejected. It helped a lot as companies who fake resumes and work got exposed when we interview them on writing code in front of our panel. In short, you cannot survive in business without strong ethics.
How do you seek to establish trust and confidence with your software development company?
[Jim]: We do a thorough research on the company. We look at their website, Linkedin profile and connections. Post that, I personally followed their CTO/CEO discussions on social media to understand their demeanour.
Remember, you are not looking for one off projects, but look at them as your team with same vision. See that thing in the outsourcing partner, do they care for your vision.
You must check for industry standards followed. As there are certain protocols, when you are building a banking application or a blockchain project..
Almiga Solutions gives strong emphasis on employee reskilling. I felt an innovative company who understands the market pulse, can help us stay abreast.
I was also impressed by their philosophy of “empathy for co-workers and integrity with clients”. After shortlisting, we asked for international references and case studies they have worked on.
Did you have a checklist for hiring?
[Jim]: Yes. Of Course. I can certainly help in listing them for your readers.
- Domain specialisation: Check them about the domains they have worked. In fact, what is their role in the project. Typically, subcontracting is very prominent in countries were rates are affordable.
But delivery is often comprised. We dig deep into knowing more about their specialization.
- Resource Allocation: I was speaking to a company in Thailand, that said they are running 8 projects with a team of 16. So you can imagine the state of the delivery.
We do not want to get into partnership with teams who lie and cannot accept from the onset. In one of my interviews with a firm in Hong Kong,I requested for resource availability sheet, and they never came back. (Hahaha…..).
- Employee Strength: I do not understand why services firm lie. These days a simple Google search will tell you everything about a company. Communication is the backbone for a successful client engagement and delivery.
It is often negative way to start the engagement. Even if you show promise and tell me, I can put additional hours to scale and hire the right fit, I will give you a chance. The world is huge.
There are so many ways we can collaborate. I have seen founders hesitate and fear on such open ended questions.I make a point, if the leader and delivery head are unable to answer such questions. It is closed case for me.
- Rates: For us, rates was not the deciding factor. Often lower cost engagements, can lead to inferior output. Though our team did the research on rates offered in Asian and Eastern European countries.
After that we, searched on tech vs non tech regions. I found that Offshore development rates in Eastern Europe average are $30-$55, in Asia and Africa offshore developers charge $15-$35.
We were sure that we will go with a blended hourly rate for a team of 5 developers to start with and paid monthly
Another option that we considered was paying a milestone based payment. But, since we were looking for a long term partner, not a vendor. We set up a different mindset.
- Hierarchy: I was amazed that some of the companies in India, Vietnam and Poland have no company hierarchy. In cases, developers are left alone and report to CEO only on delivery date. Why would you work with a company who does not care for their employees. I came to know of such cases from my IT manager during the interview process. What should you do? SImple, reject
When I looked at the Almiga Solutions hierarchy structure, it represents professionalism. Have a look at the structure
- Delivery Manager
- Technology Lead
- Senior Software Developer
- Mid Level Developer
- Junior Developer
- QA Engineer Lead
- QA Engineer
- Technology Lead
- Delivery Manager
We found managers eating, discussing in native language, developers cannot explain the work they have done. I can say that there is a dearth of skilled engineers worldwide is hurting the economy. I can say the same is the case with our country.
- Recruitment Partners: This was a bit tricky. I want to test how comfortable are they with such questions. For example, I asked about, “how many recruiting partners you have”?
Another, I remember, “What is your employee hiring process, client onboarding process”? For a decision maker, these are important things to know.I know my colleagues who have burnt fingers with outsourcing. I was absolutely sure, what I wanted. Even if I fail, but there is a methodology we followed.
- Operational Ability: Know how many projects they are running. This will give you an insight on the domain, duration and resources allocated.
- Security Testing: You must check that if the partner has security testing as their offering. Trust me, it took us endless hours and weekends to get a partner, who ticked this box.
- Reviews and Ratings: We used Clutch and Design Rush initially to check partner ratings. If you are working with an international client, you need to be spend time in branding and reach out to the target audience.
Do you also look at the portfolio and other stuff?
[Jim]: Yes. A competent software development outsourcing company knows what is the requirement of their client. If you have developed software products, you should share as much information as possible.
I also asked if they have solved relevant problems (in our case). The more specific it becomes, it is easier for us to work with them.
I also look at the consulting rates. Rates in India and other renowned offshoring destinations are economical.
There is a catch. You need to know with whom you are working: Delivery head—to developer–to quality analyst.
If the transparency is not there, you are signing a wrong deal. I prefer, pay the worth, so that there is no disappointment for both parties. If you are clear, other partner will follow.
Can you highlight on the importance of signing a legal document?
[Jim]: It is a must for all of us. We do not work without any legal binding for outsource work. Our team did their homework and spend time in defining the scope of work. Anything that is beyond SoW is not covered.
I am shocked to know companies in Asia have such poor understanding of legal contracts. I recall an incident, when governing laws mentioned in our agreement was UK, and the partner had it Hyderabad, India. It went so far that our legal team had to intervene and agree to settle it cordially.
But, due to pricing and delivery model, we did not proceed further
Did you discuss the project methodology- Waterfall or Agile?
[Jim]:I have read that traditionally outsourced followed a waterfall method. But, I wanted to understand the latest development approach. I spoke to my friends and business partners and they suggested, go with Agile.
We tested many applicants on their knowledge on Scrum and Kanban. Most of them failed miserably.
Can Agile Methodology Work with Outsourced Software Development Projects?
[Jim]:Agile method includes multiple development iterations, defined deliverables, and daily communication. It works different from waterfall model, where you know, there won’t be any changes in the requirement.
Testing is done concurrently with development, and multiple revisions are delivered before the final release. You are in control of the project management and it offers great flexibility.
There were three rounds of discussion with Almiga on different delivery standards. I remember, the Agile delivery model was discussed for over couple of hours, before we accepted their proposal.
What were the things you looked in Almiga Solutions?
[Jim]: You need to check how much importance is given to documentation, development approach and data security. We judged proposals and partner presentation on these three parameters.
I personally want to point out on cyber security to your large readership. You see there are so many cyber breaches happening over the world.
It scares me that despite spending millions, industry is at risk on how data is sourced and consumed. I feel there is a huge demand for data security experts and threat intelligence professionals.
We were clear that our software outsourcing partner fully complies with security regulations and industry standards.
We requested for the security policy they have in place for the organization. if your potential partner doesn’t have a clearly defined security policy, you better press the exit button.
We found them to transparent on delivery and the value they bring to the table. The tools and processes implemented in the company were industry standard. Our panel visited their office to meet founders.
I am glad to know that India’s engineering talent is not limited to Bengaluru and Chennai, we went and hired the team based in Pune.
What were the things that went right during last six months?
[Jim]: In one word, communication. Both parties know their role and we work in developing our core capabilities. No blame game or pointing out flaws.
Rather if there is an incident, we look for solutions and not exaggerate conflicts. Whenever you work, there is bound to be difference of opinion. It is your calibre, how quickly you move the conversation to right direction.
What advice will you give to companies who are considering outsourcing their IT work?
[Jim]: You need to look for partners who understand your pain points and go out of the way to create a platform to build an endearing relationship.
It is certainly not easy as it sounds by simply posting on Freelancer account and get the work done. For us it was a management decision to look for a partner with ethics, delivery focused and committed to reskilling with time.
I will end by using a quote from Benjamin Franklin, “An investment in knowledge pays the best interest”:. We have invested in Almiga and I am sure, we will get our interest on time. Thanks all for participating.
You Can Hit a Home Run Like Jim Collins
Successfully hiring an outsourcing software development company requires your team effort. You can seek advice from your network on their experiences.
This will help you a lot. Please keep the conversation clear. You will often see projects fail due to poor communication and over zealous management.
Make sure you are grounded and check every single point on the list with your intellect in place.
It is a business decision that can hugely impact your revenues, and broaden your views of diversity in the global workplace.
Did this story answered doubts in your mind? If you take a leaf out of Jim Collins, your should be able to hit a home run too!
Your approach on defining scope, evaluation parameters and sound verification process will ensure in hiring the right outsourcing partner for your business.
Are you taking the step now?If so, what approach you took in hiring the partner for your business?
Invimatic is a software outsourcing company from Pune, India. Our senior product consultants understand the domain and devise a plan to bring your idea or MVP to the market.