Return to Archive Runtime - The Software Outsourcing Newsletter for Executives and Investors from Accelerance and Steve Mezak In this issue: Use this short cut for steps 1 and 2 of a quick 3 step process to select the best outsourcing team for you. Then use the third step to make your final decision. A Short Cut to Choose Your Outsourcing Vendor In the last issue of Runtime I introduced a quick three-step process to select your outsourcing vendor: 1. Source – find vendors that you want to consider 2. Screen – apply an objective set of criteria to narrow down your choices 3. Select – look in more detail at your finalists and select the best one I also mentioned a short cut you can use for steps 1 and 2 if you don’t already have a list of outsourcing vendors to screen and compare. Here it is. On the Accelerance web site is a vendor selection worksheet: http://www.Accelerance.com/findYourVendor.php3 On this worksheet you select your criteria values from the handy pop-up selection lists and enter the weight values to indicate which which criteria are more important to you. You will then see a list of about twenty Accelerance pre-qualified and expert outsourcing teams, ordered by their scores computed to show their ability to satisfy your requirements. It takes just a few minutes to fill in the form and it is completely free. And it’s safe. There is no obligation to proceed to Step 3 with any of these vendors, and the vendors themselves will not be notified of your results. I am not advertising this worksheet link on the Accelerance web site. It is made available only to readers of Runtime like you. So take advantage of this quick Source and Screen short cut to quickly find several excellent options for your outsourcing. Now for Step 3. Step 3: Select – Inspect, Negotiate and Try Out Your Vendor Step 3 begins when you have a short list of vendors to consider further. Vendors on the list should be able to satisfy your most important criteria for technical skill, team size and ability to work and collaborate with you during acceptable hours in your day. This step is where you make your final decision. It is looking in detail at each vendor to discover which is the right one for you. There are five ways you can investigate further: 1. Check References 2. Examine Resumes 3. Negotiate Rates & Terms 4. Visit Them (Optional) 5. Do a Pilot Project (Optional) What Do Others Say? You should only select an outsourcing vendor that has positive references. Some outsourcing teams have started out by doing great work in other parts of the world and now may be aggressively offering their services in your country. The best references are in your own country. If you are in the US or Canada then references in Europe and other countries can be OK. The questions you ask should confirm technical ability. What creativity do they exhibit in finding solutions to problems? What is their ability to collaborate? What kind of specification and on-going direction is needed? What were there any problems or issues on other projects? I See Your Hobbies are Science Fiction and Basket Weaving... If you are truly at Step 3, then you are ready to look at the resumes of the engineers that could actually be working on your software. You have confirmed through reference checks that the vendor has indeed used the technology you need on other projects. Now you can look at resumes to determine if the engineers assigned to your project actually have the skills you need. This is also a time when you can perform a phone interview of the engineers that will be assigned to your project. I have also done "interviews" by instant messenger if the engineer does not speak fluent English but can read and write it. The purpose of the interview is to confirm the engineer’s technical skills and ability to communicate. You can also probe for problems they have run into on other projects to get a sense for their creativity and problem solving skills. After all, they are engineers and engineers should love to solve problems. But be aware that in most Asian cultures, it is difficult to talk about problems or issues. If you feel like you are not getting a complete response to your questions, it may just be a cultural issue. But it could also be a sign of future communication problems. Everything is Negotiable (almost) Everyone wants a good deal, and many outsourcing vendors will negotiate with you to win your business. However, there is a limit to how deeply the good vendors will discount. After all, they are in business to make a profit, and they have overhead of offices, salaries and equipment to pay for. These costs are much lower than what you would pay in the US and that is why offshore outsourcing rates are lower to begin with. It is also unfair to compare the rates of a reputable outsourcing vendor with those of freelance programmers. "But I can get a programmer in the Ukraine for $8 an hour!" I was told by one prospective client when we were discussing rates in the $25 an hour range for an Accelerance team. "Yes, I am sure you can." I replied. And that is absolutely fine if you just need one programmer for a non-critical project. And you can get inexpensive freelance programmers not just in the Ukraine, but most other countries as well. But if you need an outsourced team, then you will also need to pay for the infrastructure and management necessary to support them. And remember, to employ the equivalent team in the US will easily cost you $50 to $60 an hour or more. Offshore outsourcing gives you significant savings even without negotiating. Remember too that some things should not be negotiable. You should retain ownership of all the source code and intellectual property. The copyrights for the source should all be assigned to you or your company. And the programming work should be completed under a non-disclosure agreement to protect your trade secrets. It’s As Easy As One, Two, Three! So there you have it – the proven three steps to select your outsourcing vendor. Put them to use in your outsourcing right away. Step 1 – Source your outsourcing vendors from various countries and regions around the world. Step 2 – Screen the vendors based on criteria that are important to your software project. Step 3 – Select the best vendor after taking a closer look at the references, resumes and business terms you can negotiate. *** And if you still find the outsourcing vendor selection process daunting, then give Accelerance a call. The Vision Resources service is free and helps you quickly select your outsourcing vendor from over 20 proven and expert Accelerance software development teams in over 14 countries around the world. Until next time, Steve Mezak Accelerance, Inc. Risk-Free Outsourcing www.Accelerance.com 213 Garcia Avenue Half Moon Bay, CA 94019 1-650-712-8990 Contact me by email (c) 2005 Accelerance, Inc. All rights reserved. You are free to use material from the "Runtime" eZine in whole or in part, as long as you include complete attribution, including live web site link. Please also notify me where the material will appear. The attribution should read: "By Steve Mezak, CEO of Accelerance, Inc. Please visit the Accelerance web site at http://www.Accelerance.com for more information and resources on outsourcing and creating great software products."