Aspects of outsoucring

I find there are five basic aspects that need to be evaluated before you consider to outsource your software (not only) development. Here they are, without a particular order.

1. Productivity expectations
   The vendor may be on a different level than your internal resources, depending on who they are. As I deal mostly with outsourcing to cheap labour markets, expect adequately lower productivity. This affects your planning in terms of time to delivery and total cost.
2. Overhead cost
   • Setup cost
     Even when you find an established vendor (lucky you), there is a setup period - establishing communication, possibly hiring resources, office space, connectivity etc. Expect your vendor to ask to pay for their time even before they start producing any value.
   • Learning curve
     Effort needed to adjust to your business processes. Plugging people into conference calls, reporting schemes. Many of these are pretty standard accross industry, yet may be new to your vendor.
     Becoming familiar with the product is a specific subcategory where you need to be especially cautios. More on that later.
   • Quality control
     Extra checkups and tests may be a good precaution even if your relationship is established. The vendor is usually not in contact with your customer and that makes a difference in terms of quality awareness.
   • Project Management
     Frequent checks and tighter supervision of progress is another good measure for you to stay in charge. This costs money.
     Consider the pros and cons of working project-based vs. ongoing (time & material).


3. Skilled work
   The level of understanding your business has a great impact on how much independence you can entrust to your vendor. The problems you are solving (or whole sector) may not exist in the environment of your vendor and therefore have no common understanding, and the decisions made will be correspondingly bad. You cannot really make assumptions about higher education making a difference for your resources, neither about having a full control over who is actually working on your projects.
4. Time
   The time scale is different in many parts of the world. People like to take siestas, leave early to be with their families, your hour may last three elsewhere.
   Time shift - how much longer can you stay up?
5. Culture
   Communication in terms of language, but also getting direct information, honest reactions, reading between the lines and all those subtleties that exist and that make our world still so interesting. Assess yourself first - are you good with people, patient and proactive? Did you adopt the seven habits of effectiveness? Previous direct multicultural experience is a great start, almost a must prior to embarking on a remote model.

I would like to elaborate more on each of these aspects soon and provide some checks and guidelines for those interested in trying. A lot of tears and blood has been shed in the past several years on the path to successfully outsourcing software development and there is knowledge to be shared. Whoever is reading this and has comments and stories please share theme here.