Outsourcing – A Proven & Cost Effective Way

In this article I am going to discuss about a proven way of outsourcing software services. This has been based on my years of experience.

there are two categories of service providers in software industry.

1) Freelancers or independent contractor
2) Companies

I will first try to discuss about potential problems in both of these approaches and then will mention details about a proven way of execution :

Potential Problems hiring Freelancers :

Hiring:

Often time client is not aware about specific technology and skill set and that’s where they are trying to get in someone else to work on the job however a freelancer on marketplace can also show someone else work and can mislead easily. Also there is no validation of any credentials of freelancers in most of the platform so that is one of the key challenge that any individual can claim that they are expert in a technology.  Even technology test could be addressed by someone else or could be copied from online platform.

Retaining:

retaining a freelancer for longer term could again be a challenge. Often time a freelancer with good skill set could easily get another opportunity with better scale and he could very well disappear and you will lose time and efforts that you would have invested in grooming that individual.

Level Of commitment:  

Suppose your site is down in the middle of night and you need immediate support but it is rear that your freelancer will support you at that time so you will mostly have to wait for time when individual arrives to get the job done.  Such level of commitment is lacking in most of the freelancers as per survey.

Productivity:

This is another key and major area of concern. Though it is very difficult to give precise answer on how much productive a developer is but this is a parameter which could be judged easily by comparing individual with other developer having same years of experience in same area. An individual working remotely often time could have following challenges:

  1. Distraction from Personal life on work.
  2. He/she Need some assistance or immediate answer to any question from client which could delay their work.
  3. He/she not skilled in a specific are and need some technical guidance on tool and technology.

Security and Law enforcement

As freelancers may not be located in same country often no law enforcement could be done. So in the cases where following violation which are very serious in no major action could be taken:

  1. Violation of copyright
  2. Data theft
  3. Violation of any clause in NDA

Result could often be eye opening for many of them, e.g. client has developed a product concept which before that client launches in to the market some else also launches the same version of it with better look and feel.

Lack of Team Spirit

Developers with similar skills will not be comfortable working with each other because they consider their share of work has gone to the other guy.

No Long term relationship / Disappearing freelancers

Earlier days when people tend to work for same company for 10 – 15 years hence, they will know everything in and out for client. In freelancing word it is almost impossible.

Accessing & Evaluation of feedback from customer and improve on it.

Often as a freelancer it is very hard to digest any feedback from customer in positive way. It always requires a manager to understand and then to guide precise area of improvement and then track and work towards those areas.

Analysis and scoping of product Idea

It has been observed that most of the project with freelancer gets delayed or does not get completed especially those which are of fixed cost because detailed analysis was not done resulted in an situation which is not pleasing for both customer and client.

Poor code quality

Unless there is a validation check or someone at customer end does code quality check there is always a possibility that code would not be qualitative.

Product Ideas

If your freelancer is not enough experienced or skilled chances of receiving product ideas that can make your product more competitive and industry ready and can give new horizon to your product, this would be completely missing.

Problems hiring Large Companies (Team size > 50)

Finances/ Money:

Of cause this is the first and major challenge most startup will not have enough fund to sustain development for longer term and companies tend to charge high.

Ghost Resource:

unless there is a personal interaction there is always a possibility that companies tend to get job on developer1 but then getting the work done by a less experienced individual in order to get margin.

Communication gap:

in companies where in developers do have access to client directly could result in a gap in communication gap which can result in to a major problem.

Hierarchy:

too long hierarchy often confuses rather than helping team

Too many problems.

So then what is the best way for startups or a solopreneur who is having idea to be executed, but do not know how to best execute it ? so that he/she can simply focus on business and all technology relevant jobs could be taken care but in a cost effective way.

Solution :

Well the strait forward answer to this problem is Envitics Focused team Model.

Virtual Team

 

Here is how it works :

Virtual team (for every technology stack) with team size not more than 20-25 people. Each team will have following hierarchy:

  1. Project Manager ( having expertise in specific domain) [Remember everyone can not be an expert in all domain]
  2. Technically awesome developers with excellent social and online track record.

Additionally there has to be:

  1. Shared QA
  2. Shared HR to full fill Resource needs.

So any client always will receive a package of these 4.

How this model will overcome challenges faced with Freelancers:

  1. Hiring:   Shared HR is the solution to this problem.
  2. Retaining employees: As employees will have more motivation in a company culture hence, chances of retaining them would be higher, ultimately for pioneers of any team we will also give them stock options to retain them for longer terms.

We have predefined KPIs for each team members this will make system completely transparent.

3. Level of commitment: as this is a small team it becomes very easy to ensure that our level of commitment and attitude towards deliverables will remain at par. We also give reward/recognition of team player of the month to encourage individual from respective team’s fund.

4. Authenticity: we always validate individuals all the credentials hence ensures they are all 100% correct.

5. Team spirit: having small team and keeping all employees engaged and connected over the period of time will bring in a very sound team spirit which is very difficult to see in case of individual freelancers.

6. skilled Project Manager: will ensure that your product always remains under right direction, and would be always ready with a valuable ideas that can really change the game and give your product new horizon and direction. Where as in freelancing word this will be mainly on product owner.

How this model will overcome challenges faced with Companies:

  1. Cost effectiveness: One of the biggest benefit working with focused virtual team is cost effectiveness. As focused team remains small in size overall cost of operations always remains less and hence it will be cost effective, which is essential for many customers.
  2. Hierarchy: there is less/no hierarchy hence, chances of any communication gap is very less. As there is precise Key responsibility defined system remains transparent and chances of employee growth is very high.
  3. Value for Money: many companies claiming for giving virtual employees but in today’s world were in there is technology war it is very difficult for a sole developer to guide and drive project on his own. hence a valuable inputs from experienced project manager is valuable which we used to always ensure.

Interested in knowing more about us ? fill in your details and we will respond back to you http://envitics.com/contactus/

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