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Embracing Outsourcing: A Look at Best Practices

3 Aug 2015 by Mike Grady

If you’re a successful Independent Software Vendor (ISV), three things are inevitable:

  1. Death
  2. Taxes
  3. Outsourcing

The good news? That third item doesn’t have to be as grim as the first two.

The escalating pressure to produce — while reducing costs and shortening release cycles — makes outsourcing unavoidable. Qualified, available software developers are few and far between these days. Overloading your internal staff or scaling up with part-time help are quick-fix solutions with downsides (meltdowns and rookie mistakes, anyone?) that manifest over time.

The best approach is to embrace the need as a measure of your success (bankrupt ISVs rarely outsource) and look for ways that extend your resources while maintaining the quality of your brand.

Tiempo Development is an Arizona-based company that offers outsourcing with quality talent in nearshore locations — as well as analytics, deployment and support services — to ISVs through Insight. In the whitepaper, “Building the Optimum Outsource Model,” Tiempo takes the CEO’s chair for a top-down view of what to look for in a good outsource relationship. Here’s a summary of the findings:

  • One outsourced worker ≠ one in-house worker. You can’t measure productivity on a one-to-one basis. There are too many variables for outside help: institutional knowledge, differing time zones (if your partner is remote), language and/or cultural barriers (if the partner is really remote). Tiempo recommends “nearshore outsourcing,” selecting a partner in a shared time zone, to minimize these variables and facilitate communication.
  • Invest in results with the appropriate amount of time and training. Don’t measure the success of your outsource provider on short-term wins. Tiempo advises measuring success by the amount of company and product knowledge your outsource team displays. These characteristics require more training and time, but they’ll give you better results in the long run.
  • Build a partnership with your outsourcing provider. Generally, outsourced teams take three to six months to get up to speed on client companies. If you hop between providers, you set that clock back to zero each time, ensuring rookie-quality work on every project. Find a partner you can establish a longer-term relationship with, and you’ll get a better level of performance.

“At Tiempo Development, we pride ourselves on building teams to integrate with a client’s pre-existing team,” says CEO Cliff Schertz. “Through our Tiempo Quality System, we match your release-cycle project with the appropriate engineers to ensure the longevity of a team and the client relationship.”

  • Require performance metrics. Tiempo reminds ISVs that revenue numbers are not the only measures of a good outsourcing partner. Setting clear internal productivity measures is a little more subjective, and target numbers are harder to establish. But productivity metrics give a clearer picture of how many people/resources are being applied to achieve those results.
  • Achieve the right ratio for the situation. Conventional wisdom says 1:2 is a good local-to-outsource ratio on a project. But 1:3 is better, and 1:4 is excellent. Performance metrics help you calibrate the formula until you find the most cost-effective blend for your desired results.

Gain Insight.

If Tiempo Development’s take on outsourcing connects with you, an opportunity may exist in your near future. Tiempo will be offering up to $10,000 in free consulting services through Insight. Stay tuned to Insight for further details — as well as ideas, services and resources to make your organization the best it can possibly be.