Category: Offshore outsourcing

Customers of a small business are no less demanding that of larger enterprises. Thus, speed and efficiency of delivery of services and projects is critical competing strategy for small business owners. You simply cannot overlook this aspect of your business. Having 24 hours in-house operation is critical but it may not be an option that looks feasible due to operational constraints. “Follow the Sun” model of outsourcing is one tool that you can consider for having a 24×7 operations. What’s “Follow the Sun” Model ? The follow the sun model of outsourcing is aimed at creating a 24 hour virtual workday for your organization. In this model when the operations of one center goes off, the other center take over the responsibility for the next shift. Thus, for your customers it means that your organization is online 24 hours a day. In theory this model creates continuous stream of production and cut down the calendar days required to deliver the project or product. I have discussed two hypothetical scenarios in which you can benefits from it: 24X7 Technical SupportIf you are ISV, then you must need to provide support to your customers regularly. Spending too much time in dealing with support issues will deviate your attention from more important activities like feature enhancement or planning new products. On the contrary, not providing support timely will mean loss of credibility and rapport. Using the Follow the Sun model, you can have your support staff located right here using our Dedicated Hiring Model. At the end of each day, you can compile a list of support issues and send it over to your team over here. While you are asleep, the team works and attends to all the support requests. Thus, you can offer your customer guaranteed support within 24 hours. 24 Hours UpdateHow often do you clients send you bug-lists or requests that needs to be delivered the next day? If not much, do you think your clients will be impressed if you were able to do this? you bet ! If you are running a small IT services company then chances are you are programmer-entrepreneur or you have fully occupied technical staff who are already overburdened with work. How do you deliver great service to your customers in this scenario ? Answer is pretty simple: Follow the Sun! If you have a dedicated team then you can simply let then handle these urgent bug fixes or updates and deliver them to your clients the very next day. This team can also work with your project team to shorten the calendar days that is required to finish a piece of work. The “Follow the Sun” model has been used by large businesses since a long time now. They have mastered the operational issues involved in the process. Thus, we did not invent “follow the sun”, what we have done is that we have brought the same advantage to small businesses. Starting from the organization structure, policies, processes and prices, everything in our organization has been designed to effectively serve SMBs effectively and efficiently.

Before I go on to explain the risks that are involved in working with freelancers, let me first talk about the reasons why people choose to work with them in the first place. Lowest Cost In comparison to working with the structured organizations, freelancers may charge lower fees for doing the same work. Moreover, most freelancers work through bidding portals like rentacoder.com and the price wars works out in your favor. Working with a Specialist Freelancers work in their specialized area on which they have knowledge and experience. This generates a sense of working with a specialist. Availability A freelancer will bid on your project only when they are ready to take up additional work. This means they are ready to start immediately and you can start seeing progress from the next day of awarding the contract. Greater control Another factor that comes into the mind is that freelancers are individual which is reassuring to know specially if you are scared of contracts and hierarchy. So, where is the risk? Let me explain: Project Matters! Working with a freelancer is suited on projects that require only one set of skill that the freelancer can has and can provide. However, a typical project often requires different skill-sets for example designing database, writing codes, designing interfaces, testing etc. Thus, even if you freelancer scores high on one of these areas, he will score low on all other. Eventually, the average quality of output turns out to be low. Thus, if you have anything more a simple script written or a layout to be done, working with a freelancer is not such a good idea! No Project Management You know what I mean if you have ever asked any freelancer to give a project plan. The project quotes that they offer are often just “best guesses” of how much they want to make for the estimated duration of the project. If you do not have much experience in managing software projects then you are in for a ride as they take you through tech mumbo-jumbo. Questionable Quality A freelancer is not guided by a company policy for code standardization nor do they have access to time-tested code libraries that software organizations build over time. Thus, don’t be surprised if you find out that the code is poorly written and totally undocumented. Alright! They are available now but, what about next time? Even though the freelancer is available “right now“ to start the work but that does not mean that they are going to be available for the next time you need them.  No backup for Uncertainties What if the freelancer gets hit by the bus or falls sick when you have an important deadline to meet? Nothing! You will be standing alone, out there in the cold and you will not be able to do anything about it. The freelancer is a single person who is in control and there is nothing you can do about it. If they want to take a holiday in between the project – good luck! No Infrastructure Typically a freelancer working from his bedroom and has computer with maybe a UPS and a printer. The worst part is that your project resides on this PC which is also used by his four-year-old for playing games. What happens when this PC crashes? No points for answering that! No Organization A six-man month project will exactly take six-man months for a freelancer to complete. Since they are working alone they cannot work on two tasks simultaneously. There is also no hierarchy and you cannot escalate any issues if you run into trouble with the guy.  No Contractual Bindings An organization can enter an enforceable business contract with you to which they are legally bound.  You cannot enter into a legal contract with a freelancer. Even if you get something signed, it’s of very little value.  It does not make any business sense unless you have a very small job that needs to be done cheap or one that you can do without!

Everybody who has ever has been into a position where one has to manage a crisis projects (either offshore or in-house) has come to a situation where things seem to be going nowhere. An out-of-control project first gets your attention as the problem is reported one of the three areas: Schedule The schedule of project seems unacceptable for some reasons. As a contractor you might feel that it is totally unrealistic given the volume of work.  Costs The costs may be sky-rocketing. You may have two people working on the project for past 4 months where this was supposed to be a 5 man-month work of work! The cost may be killing your profits and bringing you into the red. Resources The #1 thing an average person thinks of when project runs wild is to add another resource as doing that will release some pressure. But, as a business owner you know that it may not be entirely true. So what are you going to do? Honestly, it’s for you make some hard decisions. There are two key strategies that should remain in your mind: Maxi-Min This means maximizing the minimum profit that you are making on the project. Or Mini-Max This means minimizing the maximum loss that you could incur on the project.  The strategy that you choose to pursue will depend on particular situation. For example, If the project is more about keeping or building a relationship then most likely, you would pursue the mini-max strategy whereas, if it a one-off thing then pursuing maxi-min is the best alternative. Whatever you choose, the steps below will help you in getting the project back on track. Getting the project back on its Feet STEP 1: STOP (for a while!) The first thing you need to do is to stop the work on the project so that you can review what’s going on. Your objective is to answer the following questions clearly: Are there any changes in the scope? What % of the work is complete as per the client? Are the requirements of the project clearly defined? Are there any project management issues? The one thing that you absolutely must be convinced about before moving to STEP 2 is that everybody should be on the same page about the project. STEP 2: EVALUATE As a person responsible for the outcome, you need to evaluate the entire scenario. This means answering questions like: Which section of project does not have clear specification? How is the present job description different from what was discussed earlier? What are the reasons behind miscommunications? This step involves intense communication both with the client and the project team. At the end of this step the client should recognize the problems as well as the project team must have clear picture of what will constitute completion of the given module or the success of the project. STEP 3: FIX Once the problem has been clearly defined, it is the next task to fix the root causes. This may involves things like: Reassigning resources. You may need to move some existing resources out of the project and bring in other resources which the project needs. Formalize communication structure: You may need to set up fixed structure of reports that the resources need to provide weekly or even everyday if required. Re-negotiate the contract. STEP 4: Re-Start At this stage all the issues that have infested the project has been eradicated and the project must have clear plan with well defined deliverables and deadlines.

To remain a healthy and growing enterprise, it is essential to have continual improvement in productivity of your existing workforce. Stated in other words, as the salary level rises, the existing team must also contribute to greater revenue. However, as most small businesses hit the growth curve, there is no effective way to track the increase in revenue from the existing workforce that it employs. Take for example a scenario: Let’s say that in comparison to the last year, your revenue has increased by 25%. Moreover, the total workforce that you employ has also risen by 15%. How much of this growth can be attributed to the earlier pool of employees without taking into the consideration, the new 15% that has come in? Here is a more elaborate example: Year Workforce Revenue (in $‘000) 2004 10 100 2005 15 175 Thus, the Growth is Workforce (or, W) between 2004 and 2005 was (15 – 10)/10 = 50% and the Growth in Revenue (or, R) was (175-100)/100 = 75%. We calculate, the Growth from Existing Workforce as: (R – W) ———— (1 + W) Or, (75 – 50)     ————— = 49%       (1 + 50) Thus, you can safely assume that the productivity in your organization has improved by 49%. If this value is continuously falling, it means inefficiencies are cropping up within your organization and you need to upgrade the technology and processes. For IT companies, this value is especially effective, because with time the pool of developers gets more skilled at their work and the productivity improves. This figure however does not take into accounts any revenue improvements due to increase in prices. Thus, you will have to factor that in to calculate revenue at base level prices i.e. the prices prevailing in the previous year. Our clients often expand the team of “Dedicated resources” that have and this value helps them appreciate the contributions of the “founding” team members.

I get the same questions all the time – “How’s a Senior Programmer better?” Although the most obvious answer to this is “A senior programmer is more experienced” but, this is not what I see in my mind when I try to imagine looking at a Senior Programmer and Junior Programmer working on the same project simultaneously. The reason I recommend to go for senior programmers is: Better Productivity What is Productivity? Productivity is generally defined as output produced divided by Inputs used i.e.   Productivity = Output / Input Here Output is the actual work done i.e. results produced while Input refers to all things that a programmer required to do the task which includes the amount of time you had to spend to micromanage things. Thus you can better productivity if:  A Programmer produces same output by using lesser number of inputs  A Programmer produces more output by using same number inputs  A Programmer produces more output by using lesser inputs  So, a productive programmer is the one who takes lesser amount of time and inputs from you. Thus, if one your “must haves” is not to micromanage the programmer then it is always better to hire a senior programmer. At Indus, any productive programmer is a senior programmer. Thus, the fact that a senior programmer has more experience is just coincidental.