Return to Archive Runtime - The Software Outsourcing Newsletter for Executives and Investors from Accelerance and Steve Mezak In this issue: Sometimes clients think picking a large outsourcing vendor is a safe choice. Others have trouble when they select one that is too small. What is the right size vendor for your outsourcing? Your Outsourcing Vendor: Too Big, Too Small or Just Right? How important is the size of your outsourcing vendor? By size I mean the number of engineers they have on staff working on client projects. The danger is. if the vendor is too small, they will not be able to ramp-up quickly to the number of engineers that you need. If the vendor is too big, then you will not get the attention you need. I know how those smaller outsourcing vendors must feel when they get passed over by prospects. I am not very tall and was always the last choice for schoolyard basketball. But if you need twenty engineers to develop your software, then you do not want a vendor that has to double in size to handle your project. Will the vendor have additional resources "on the bench" if you need to grow? Can the vendor quickly overcome a sudden loss of talent due to normal attrition? On the other hand, you will certainly be lavished with attention as a small vendor’s most important client. It may be worth the risk, especially if the vendor will grow larger over time and has excellent references. However, if you need a small team of engineers you will not get the attention you deserve from a large outsourcing vendor. You will experience the swapping of people on and off your project, poor communication and lack of responsiveness to your questions. These large firms are looking to bag the big deals requiring hundreds of engineers. Consider the number of engineers you need to develop your software and whether the vendor has experience dealing with your size project. Most software is developed by small, agile teams of between 5 and 25 engineers. Fewer than 5 and your success will heavily depend on the qualifications, skill and experience of the individual engineers. With more than 25 engineers, the management and communication structure of the group becomes the dominant success factor. Teams with 5 to 25 engineers should have a combination of senior and junior engineers. This keeps costs in line and enables you to focus your communications with the senior members of the team. Some people have what they think is a small software development project and can get the software written for next to nothing using offshore outsourcing. Then they are shocked to see estimates of multiple man-months of programming that far exceed their budget. "Hey, I thought offshore outsourcing was supposed to be cheap!"They say. It depends on what you mean by cheap. When you talk to any outsourcing vendor that has more than a dozen engineers working out of an office, then there is a cost for the office, phone, computers, Internet connection, etc. The costs also include a management structure that is able to guide your project through to completion. Yes, there are programmers available in the world that will work for what we would consider "minimum wage" here in the US. But these are freelancers, usually working from home, that do not have the extra costs a real vendor incurs. If a vendor with a reasonable number of engineers is charging very low rates, then they are likely to be a "body shop". They will hire out engineers (the bodies) to work on your software for cheap. But they will have limited professional programming experience and no technical management in place to direct their work. Except you. If you need only one or two engineers, and your budget is tight, then you can try using individual freelance programmers. They can be found on web sites like Elance Marketplace or RentACoder. Your results on these sites will depend on the skill and ethics of individuals you select after they bid on your project. One entrepreneur tells me he gets satisfactory results for about 80% of the freelancers he hires with these sites. The other 20% never finish the work or stop responding to his emails. And of course he does not pay them. The bottom-line is, he is able to get most of his small programming projects completed for a few hundred dollars each, but with a great deal of monitoring and micromanagement to ensure he gets what he needs. The problem with the freelancer solution is it does not scale well to a larger sized team. If you are starting with two engineers and planning for five or more soon, then you will double or triple your own management responsibilities as you grow. Whereas starting with two engineers at a vendor will take advantage of the vendor's ability to ramp-up your team quickly and let you manage them with a single point of contact. You can check resumes when you hire a team before you make your final vendor selection. But the dynamics of the team and the management provided by the technical leads are more important than the quality of each individual engineer's resume. How about you? Do you want to hire a bunch of bodies that can program or find a vendor that gives you a cohesive team of engineers? If you want to find a great vendor quickly then use the new Outsourcing Jumpstart service from Accelerance. You get contacts with five excellent software development teams and a guide to help you make your final choice. Outsourcing Jumpstart is offered at a low introductory price for a short time only. See if this service is the right size for you: See the details here: Outsourcing Jumpstart - India *** The Runtime Bottom Line: How many engineers do you estimate you need? Only consider outsourcing vendors that can handle your size team, large or small. Beware of body shops that give you cheap engineers but no management. Until next time, Steve Mezak Accelerance, Inc. Risk-Free Outsourcing http://www.Accelerance.com 213 Garcia Avenue Half Moon Bay, CA 94019 1-650-712-8990 Contact me by email (c) 2006 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."