When Aviram Eisenberg launched his offshore software development company, Ignite, after seven years of intensive work, he made full use of the lessons learned managing teams of offshore developers. He was passionate about IT, and believed in the potential for software outsourcing.
Aviram brought his experience as a leader for an innovative tech company in Israel, MIND CTI, and applied it to a new scene. He demonstrated what it took to make IT outsourcing meet the needs of the global market. “At Ignite, we believe that there are concrete steps to success. While it might be tempting to focus mainly on the end product, putting your customer first is an essential edge for the business,” he explains.
Here are five ways to do just that and more:
Select the best business model for your customer’s needs.
There are many reasons that lead companies to outsource. It is important to recognize why. Here are three models to help you decide how to meet customer needs:
The Dedicated Team. There are countless business niches, and no two software projects look the same. Draw from your talent pool, and match the right people to your project’s requirements. Since the dedicated team will work very closely with your customer, they will gain significant knowledge and experience in the process. They will always be there for the customer, and maintain the know-how for future projects.
The Agile Fixed Price. The problem with a strictly fixed price is it only works for very well-defined projects, and does not accommodate unexpected change. For projects that can evolve many times through their development cycle, you need a dynamic and flexible model. Let the customer define requirements as their needs change, and determine cost and duration accordingly. Last but not least, commit to frequent releases and incremental delivery. This will give your customer room to adjust the requirements, scope, or priority of their projects.
Virtual Captive Unit (or VCU). You will want to use the VCU model when a customer wishes to set up an R&D center in an offshore location. Here, you will provide them with full control, and show them all the costs you incur during operation. The center will have to meet all the client’s requirements and processes, and mesh well with their organization and overall culture. The customer will take on a fixed markup, and all overhead. Given this, salaries and bonuses are usually in the customer’s hands too. You will handle the rest, including administration, HR, the legal side of things, and so on.
Choose your remote development team’s location with care.
To be productive, business owners must understand their team and work well with them. As an offshore vendor, pay close attention to where you choose to locate your team. There are language and culture barriers, and time zone conflicts to consider.
At Ignite, we believe that Eastern Europe is an optimal destination. This includes places like Poland, Ukraine, and Romania. There is a large talent pool; Ukraine alone has 1000 plus IT companies with customers and partnerships across the US and Europe. On the other hand, the wages tend to be lower than the US or Western Europe. Also, language and culture barriers are small or non-existent, and you reduce the cost of infrastructure and technology.
Offer transparency and full control over the process.
It is safe to say that your clients risk losing some control over the processes they outsource. This is often true when you just start the relationship. Real-time communication is essential here. Both your team and the client should be up to date on any changes or issues, so have key members of your team always be in touch with the client’s management.
Another thing you can use is project management software. This will create a common source that everyone can check, and make integrating different systems and resources easier. While just using a tracking software does not replace the need for face-to-face contact, it keeps everything clear, and everyone accountable.
Establish a baseline early and focus on quality.
Agreeing on baselines and other points of reference, and sooner rather than later, allows you to focus on core needs. Simply put, you can only get to work when you have a clear set of expectations. Having those early on will create a positive working relationship, and it will lead to higher customer retention as you go forward.
Once you have defined what quality means to your client, commit to it. The best way to demonstrate commitment is through continued improvement. Now, things like performance and stability require a lot of energy and focus. So utilize iteration and incremental change to meet your client’s expectations. Of course, having a history of great work helps too, since enterprise companies will dig around and ask for references.
There will be days where things do not go well. This will happen regardless of how awesome your team is. Be ready for this, and have an adaptable system in place. This means improving things a little every time you solve an issue or break through a tough deadline.
But even if you do your homework and assess risks early, you still need to have the capacity you meet black swans like hidden costs, or legal issues that crop up unexpectedly. Having service level agreements (SLAs) to keep things in perspective. Also, be sure to have a confidentiality agreement in place to safeguard your client’s vital business information. And finally, being prudent and dealing with risk factors from the start will save you a lot of effort and money.
Change is always on the horizon. A genuine commitment to putting your customer first can be tough, but it is always the right thing to do.
This article has been edited and condensed.
Anna Garland is the community manager at Ignite, an Israeli software outsourcing company, and and enthusiastic writer. She is passionate about IT entrepreneurship, startup ideas and all things online marketing. Drop Anna a line on Facebook for a quick chat on any of these topics. Connect with @igniteoffshore on Twitter.
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