Sunday, August 19, 2018
Publication Date: 06/1/2007
Archive >  June 2007 Issue >  Partnering > 
Finding Good Offshore Partners for Software

A bad experience with offshore outsourcing of services like software development or testing can make manufacturers hesitant to try it again. If you roll your eyes when you hear the "O" word, consider that in many cases, unsatisfactory performance is the result of a poor outsourcing vendor selection process.

After all, finding an offshore partner seems like an easy thing to do. Get on Google, do some searches, find some vendor websites and make contact. But then you discover that there are thousands of websites. And sometimes, the vendor with the most technical talent has the worst website.

You certainly can find a vendor on your own. Some manufacturers have done it, either through luck, perseverance, or with a referral from a friend. But for many more, the search process takes time. Lots of it.

One VP of Engineering complained, "I spent all weekend — over 15 hours — looking for an offshore vendor. And I am no farther along in my search than when I started!"

Unfortunately, his experience is not unusual. Many VPs and CEOs invest three to five months to find, evaluate and select an offshore vendor. And even after they've made a choice and signed the contracts, they still run the risk of choosing a vendor that's not a good fit.

Saving Search Time
One way to reduce the selection process from months to weeks, or even days, is to work from a short list of pre-screened, pre-qualified vendors. Companies such as Accelerance, for example, specialize in helping their clients build great software applications and products in the most risk-proof and cost-effective way possible. They've built a global partner network of offshore vendors that have been carefully evaluated through interviews and reference checks. We help you define the most important selection criteria, provide a pre-qualified list of companies, help with negotiations, and more.

For example, many companies want to negotiate price with an outsource partner as if they were purchasing a product or service. In reality, hiring an offshore company is like hiring an employee. If a highly qualified job candidate wants to negotiate your salary offer, do you try to browbeat him into accepting the lowest amount? Probably not, because you know from experience that underpaid employees do not feel valued. There's little incentive for them to perform and they'll leave as soon as something better comes along. Likewise, trying to get an offshore company to accept the absolute lowest rate can produce undesirable results, especially in cultures where it's impolite to be disagreeable. The outsource partner accepts your project, but silently resents your business. Over time, their service and quality deteriorate. The money you saved in the beginning must now be used to pay for a new search.

Don't Be a Small Fish
Another scenario in which an outsourcing arrangement can fail is when a large offshore company takes on a small project. While hiring a team of a dozen engineers may be a big deal to you, it's peanuts to a firm with client projects requiring a hundred engineers. In this situation, you probably won't get the attention you deserve. On the other hand, a small offshore firm desperate for new clients may take on your project knowing they can't do the work. They're counting on the profit they make on your account to help them expand. You think you're getting a great deal hiring engineers or software developers at $8 per hour. But after a few months, their quality declines, deadlines are missed, and the company takes days to respond to your E-mails. Maybe they even hit you with a price increase.

If an outsourcing vendor offers you a very low rate, you need to know why. There could be any number of reasons their business fails and if you're not careful, you could go down with them. Conversely, the companies in Accelerance's Global Partner Network have been thoroughly investigated. You have the security of knowing the offshore firms we recommend are financially stable.

What About Freelancers?
You may have seen the ads and or heard stories about how you can "Hire Programmers For Only $2 Per Hour!" Websites like Elance and RentACoder list many overseas freelancers willing to work dirt cheap. So why should you pay an offshore company five or ten times that much for programmers? Simple. You get what you pay for. Every day I meet manufacturers who tell me they went through three or more programmers before they found one who could deliver. Or had to fly to Bulgaria to salvage the project. Before you hire a low-priced freelancer in another country, consider the value of your time.

Another weakness of hiring freelancers is scalability. If you need a couple of freelancers for a short-term project, you can manage them effectively. But it's difficult to efficiently manage multiple freelancers in geographically (and culturally) diverse regions of the world. And it is especially challenging to create an esprit de corps in a distributed team that you'll be using for a long-term engagement.

Removing the Risk
Outsourcing to offshore companies has many benefits. For example, you can save at least 50 percent on programming costs by hiring offshore resources to supplement your in-house staff.

If you can afford to assign a senior executive to spend six months looking for the right offshore partner, you'll probably make a good selection. But what if you need a quick solution and must choose your perfect outsource company within days, or even hours? Considering that between 2003 and 2006 software quality problems increased from 24 percent to 37 percent, communication issues jumped from 44 percent to 53 percent, and concern about intellectual property theft increased from 24 percent to 31 percent (as reported by the Sand Hill Group, Gartner Inc. and The Software & Information Industry Association), choosing a vendor shouldn't be done in haste. To help you get started, the Accelerance website offers a free white paper, "Speeding the Search for Offshore Developers: The Benefits of Offshore Software Development Networks and a World Region Outsourcing Guide" that includes specific, practical information about the countries and regions that are the top outsourcing destinations.

For more information, contact: Accelerance, Inc., 303 Twin Dolphin Drive, Suite 600, Redwood City, CA 94065 877-992-2235 or 650-472-3785 fax: 650-472-3785 E-mail: Web:

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