Tech Link Newsletter

November 2008

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A Hitchhikers Guide to Outsourcing

The words outsourcing and offshoring have become powerful emotional words which evoke a plethora of negative imagery and memories of failed projects. Amazingly, almost anything you can say about these two words is true! For example, O & O sends work to foreign countries – true. O & O can lower your TCO – true. O & O use talent that is not up to par with US based talent – true. Companies can leverage the talent that O & O can provide – true.

How can this be? How can we say pro and con statements about O & O and both be true?

While the experiences surrounding these two concepts seem to be mostly on the negative side, we must be careful and not throw out the baby with the bath water. That is, the O &O idea is a good one but we have not had much success in its execution.
As we all tighten our belts in these tumultuous economic times, we should be focusing on how we can improve the bottom line by finding the sharpest minds and leveraging their expertise to make our corporate IT as efficient and cost effective as possible.
We all know the pitfalls of engaging outfits that have their software support centers in up-and-coming countries. You’ve heard them all.

The talent and experience are just not there!
Language can be quite a barrier!
We just trained that guy… he quit?
Don’t they have security practices for hiring?
Etc.

Obviously, in the ideal utopian world the best way to approach any need would be to simply hire your talent stateside. Notwithstanding the temptation to do so, the world we live in has an insatiable thirst for finding improvement while lowering the cost.

To that end, here are a few tips for helping you identify a well suited outsourcing business partner that can provide the right talent at a competitive cost with the proper security hiring measures. Proper infrastructure security measures are assumed.

Where is provider’s software development center? Is that country known for its technical advances in software/science/engineering/medicine/etc? Schools? Engineers per capita? Scientists per capita? Number of patents filed by vendor country?
Laws in that country? Are their laws reciprocal to the US’s laws?
Provider’s hiring practices? Does the provider have a revolving door of talent? Can’t keep good talent? Background security checks on employees? Do they have proof of a thorough check on the persons who are accessing your data?
Are there other possible barriers such as language or cultural differences that can limit the success of your projects?

These are only a few points to help you in your journeys through the outsourcing / offshoring space so that you may have safe travels and happy arrivals. Obviously, this space is limited, and does not allow for a full discussion of the vendor selection process which should be formalized and requires due diligence to ensure all of your requirements are met.

Bon Voyage!

Stanley Siegel

Stanley Siegel is the Chief Operating Officer and one of the founders of Aviva Systems Corporation, an IT Services Provider with offices in the US and the State of Israel.

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