12 11 2013
Ten keys to successful outsourcing
It’s business Tuesday again and this time I will share with you some of my experiences on getting started with successful outsourcing. Outsourcing may sound like something simple or something too troublesome but if you do your home work well then it is possible to succeed and have a cooperation that really makes your life more rich by many aspects you maybe don’t expect at first. Here are some of my experiences.
1. Know your partners well
I started my partnership with company built by my very good friend. Yes, I knew this guy years before making outsourcing deal with him. It made for both of us way easier to get over the complexities of the new business we both entered. Finding good partners is key to successfull outsourcing deal.
Even when finding partners through official channels you may end up with not very honest people. You have to make sure before any deals that your partner is trustworhty, they don’t have bad reputation or criminal cases and they are not part of deals that are on the edge of corruption. Also make sure your partner has no connections with criminal groups and mob.
2. Know people you are working with
It is important to meet the people you are working with. You don’t have to visit them every month but still your attention is needed. People who know each other have less obstacles in their communication, they understand each other better and they team up better.
Working with your local team is easy – you know people very well, you hang around together sometimes and the relationship is more like friendship. You must build same kind of good friendship relations with your outsourcing teams. It makes it for you way easier to work with people if they can take you also as a good friend.
3. Know cultural differences
In other countries people have different traditions, different culture and maybe even different understandings. Before starting with outsourcing make sure you know where you are going and how people live there. It’s not your business to criticise them. You must adapt and understand. It’s possible you find out something very rational, something you can also bring in to your life. Other cultures have many things to teach you. You must be open minded and enjoy.
Religion, nationality, family relations, vacation time – these are just some samples where differences may come in. You must know these factors very well and make sure you don’t have any low minded managers on your side who treats all arabs as terrorists, religious people as old fashioned and so on. You and your local guys must understand the differences and respect people on the other end as they are.
4. Remote work is not easy
Remote work is often under estimated and problems turn up later the painful way. You must be very good on communication, you must be wizard who is step ahead of communication problems and you must have solution to every problem. By example, describe tasks as short as possible and problems start – what is elementary for you may be not elementary to others in project. Make a little mistake and it’s up to you to eat up the bad results. Be good communicator and you get good results.
Internet is different than the office where your people work. People are often not very strong on remote communication and they tend to apply rules of real world also to communication based on internet. You must analyze very well the situation and make sure that false expectations are moved out of your way. Don’t forget that your outsourcing teams may badly need very good communication with you.
5. Don’t disturb people too much
It is usual that every company has their own support systems and environments too share information and to communicate. If you are able to go with your own extranet and tools that people are using in all projects then you make life of developers way easier. If there is information they need to duplicate to their systems then find the ways how to automate the process so your partner can get data they need easily.
We are using Jira OnDemand and project sites on Office365 SharePoint to coordinate our work. Teams know how to use these tools and when new project comes in they don’t have to get used with another load of systems. For real-time communication we use Skype chats and calls. In some projects we have Lync as main communication tool.
6. You must support remote teams
It’s nice dream that remote team makes all the work. You just give tasks in the beginning of week and in the end of week you get tasks that are completed. No, it doesn’t work this way. Your people must be available always and they cannot take remote teams as last one in queue. If remote team has problems or questions then you must focus on them. Make delays and don’t expect that work gets done for time.
Remote teams are just like your in-house teams but they are located far away. As your local teams cannot proceed with work if there is some information missing or questions not answered the remote teams also cannot proceed if they are stuck. Information is not the only thing to provide. Sometimes you need also to provide technical help if remote team gets stuck with some technical problem. It is in your interest that they can move on all the time.
7. You are not king with slaves somewhere
It is often tempting for companies to treat outsourced teams as machines that work 24/7 like robots. This is the best way to ruin the whole deal, have a lot of stress and negative feelings. If your project is like death march project for your outsourcing team then don’t expect the good results. Also don’t expect that people want to work for you if you are a bad dick.
If you leave out all humanity from your deal then you look moron, sound moron and act like moron. You achieve nothing but problems. Take your outsourcing guys as human beings like you and your friends. Don’t hurt them from your position, don’t be arrogant and too demanding. Considering that you have leader position you must understand that what you do is also done to you.
8. Honesty and transparency
How we sell to customer and how we buy from subcontractors are often two different things and it really is our in-house stuff. But not always 100% – your outsourcing teams depend often heavily on what is going on on your side and this is why you must be more open with them. They must know what’s coming, be it good or bad news because also they need often time to react. Don’t make big surprises and expect that your partner is able to react during one minute. Be honest with them, keep them updated, share information with them and you can be sure that they take you seriously.
I share strategic information with my outsourcing partners. They know what I’m up for, what is coming and what we have to do next. They know all the good and bad I have and they can always ask me if there is something they want to know more about. Ihave cards and for them my cards are always open. Play your game like this and this is how your partner plays with you.
If you want to get most out of outsourcing deal then you must guarantee stable flow of projects to your outsourcing partner. Their teams are just like yours – when covered with work there is less uncertainty, people are not afraid of tomorrow and they can give their best to get work done. Stability doesn’t only mean project pipeline but also other things like keeping people happy, making sure that things get only better and so on.
I’m working all the time to get better and better stability in cooperation with my outsourcing partners. If I am good on providing stability to them then I am also good on providing stability to my business.
10. There is no cheap outsourcing
It’s nice to think that outsourcing is very cheap and also easy way to make huge profits. No, it’s not this way. You can go for deals like this but get ready for problems with deadlines and quality. If you don’t treat you outsourcing partners as key business partners, if you don’t commit much to outsourcing deal quality and if you don’t build this deal up as high quality service then don’t expect any markable results. Partner up with your subcontractors and make oursourcing deal as win-win for everybody involved.
I know that outsourcing may seems nice in profits but still you have time losses on building up the deal, building up the service, improving performance of remote teams and making research and development. You must understand that there are also hidden expenses that come with deal and if you don’t consider these numbers you will have some bad surprises in the end of fiscal year when you discover that internal work took a lot of development and sales time. My experience is – you must find the good balance and also make sure your ousourcing partner is included to these activities. Together and only together you are able to build up something strong.
First year of outsourcing was really challenging for me. We went on with complex projects but still we were able to survive everything. I made some very good decisions but still some things I learned the hard way. Still the best secret to successful outsourcing is simple: respect your partners, work together as one team with them and have honest and transparent cooperation with them. People are people everywhere and you cannot go with strategy that you have money and therefore you have power. If you are going against this little idea then you hardly you will be the winner.