1.    Why should I work with an outsourcing company?

You will find great advantages to work with an offshore team: the team you wish can be quickly built with the desired skills, a complete flexibility for your distant teams that you can adapt permanently to your current needs and budgets, a real capability to seize market opportunity and finally you can benefit from much lower costs (between 3 to 5 times lower) that will allow you to realize more with the same budget.

Today, all companies should concentrate on their true assets. The value of the product you wish to create resides mainly in the specifications, its capability to reach your market targets, the process that you need to manage your developments in a controlled way and, the most important, your capability to efficiently sell and support it to your clients.

Indeed, the development workforce that you need to develop your product is not central in the value of your company. On the contrary, it is now essential to be able to seize market opportunities while the window of opportunity is still open. You must be reactive and be capable of creating the product you need very quickly, while staying within budget. The resources that will produce the code became a commodity on which you will rely.

The outsourced team provides exactly the services you need. It is flexible and can propose resources with the skills and quantity of people you need, you can decrease the number of people as you wish, and you can get more realized for the same budget.

2.    Where should I choose an outsourcing partner?

You must first choose the project, the country and the communication language you wish to use to start your outsourcing operations.

The project will condition the type of agreement you need and some outsourcing companies can only work according to a specific organization.

The language will define the way you can interact with the outsourcing company. The people who will interact directly with the outsourced team must know the chosen language. It is sometimes tempting to choose to work in French, for example, and choose a country that has the reputation to have a lot of French speakers. Unfortunately, unless the chosen language is the official language (Tunisia, Algeria, Morocco), it quickly appears that it is very difficult to really benefit from this advantage.

The country must be chosen according to the way you wish to work. If you wish to be able to go quickly on site, or invite technicians to your location, it is easier to chose a country within more or less three hours by plane. You should also consider the time difference that will make communication with your team more efficient.

3.    How do I select the offshore company?

To start working with an outsourcing company, you must first select the project(s) that you want to give them. You must understand the dynamics of offshore development, and judge how your company and R&D department will behave when it starts working with the offshore team. You have to make sure they are ready for outsourcing.

Then you must select the outsourcing team you wish to work with. The company must be sturdy, with a good reputation in its country in order to attract the best skills and talents. They must be flexible to adapt to your specific case. And most of all, you must feel comfortable to work with them.

Some countries offer perspectives for being an outsourcing country for a long time. Some others are quickly growing and should become more expensive, with growing local markets, making the price rates higher.

We wish to help you to make this choice, and if you have no preference, we are very happy to introduce to you the excellent partners we have in-depth experience with and who show all the conditions to be successful.

4.    I don't know if I should trust the outsourcing company I want to work with. Should I start with a test project?

A test project always allows to show how well we can communicate with the offshore team. But it rarely reveals the quality of the team or its reliability. For test projects, we usually work according to other rules that the ones that will later be applied. The procedure is different, the size of the project too. Very often, the test project is not very significant.

We usually recommend to have an iterative process that allows demonstrating the quality of the outsourced team very early in the cooperation. In case of failure or if trust disappears, drastic exit conditions must allow you to stop the project quickly.

For important and critical projects, it is also possible to use two teams and distribute the developments between the teams. If one of the team does not perform as expected and is disappointing, you would always be able to move all the developments to the satisfactory team.

5.    I compare the costs of outsourcing proposals and I see very large differences? Why is it so?

The global salaries paid in the country account for a part of such differences. In some countries, there is a shortage of specific profiles, and the salaries quickly become comparable to the ones in western Europe.

The fiscal arrangements and laws of offshore countries may lead to differences that would represent about 20% of the cost of the operations.

Some companies have many developers that are not currently used on paid projects. They are ready to break the prices to get a new contract, even at cost or below cost. These companies will then come back to you to adjust the prices or will assign average developers to your project.

The margin realized by each company varies with the strategy of the outsourcing company, and what is included in the price. It may also depend on the management of the employees: Are inter contract employees kept in the company? Do they respect local social laws?

Some people wrongly compare salaries with the fees. When some people establish their own company in an offshore country, they tend to compare the salaries of their employees with what they would pay to an offshore company, forgetting the other expenses.

6.    Is it safe to give the offshore site confidential materials?

We can be worried when we send specifications of the next product we design, when we share in-depth functional knowledge with the offshore team or when we expose the proprietary framework that gives your company a competitive advantage.

The protection of confidential materials should be first ensured in the contract and clearly identified. It is good to ask any person working on the project to personally sign a commitment to respect and protect the confidential materials.

Otherwise, it is good to see how the local laws would apply to protect confidential materials. Very often, outsourcing countries have very tough laws with jail terms for not respecting such agreement.

You should also wonder what could they do with such materials? In France or in the US, such materials could be very easily reused when an employee goes to work for the competition, which is very rarely the case in outsourcing countries.

7.    Does using an outsourcing company affect my local teams?

Not surprisingly, outsourcing is usually strongly rejected by the R&D teams that perceive such initiatives as a threat. The outsourced team members cost between 4 to 5 times less than they do and they can be more efficient than they are. The threat is real and immediately worries your teams. The communication with the R&D team should be carefully designed to understand their threat and reassure them.

There are many ways to communicate with your team about it. The outsourced project may be limited in time or in scope leaving more than enough work for your local team. There could be a split in the domains that are managed. Your project managers could also evolve to manage outsourced teams. For each company, the appropriate communication must be found. We can help you to communicate with your team about offshore developments. Without proper communication, we have great chances that the project may fail.

8.    Could the economy of the country or political events prevent the outsourcing partner to deliver its products? How likely is this?

The events must be very significant for the offshore team to stop working, like a major earthquake for example. Most political events do not stop the offshore team to work. On crisis situation, they want to keep their position as stable as possible.

9.    I heard of so many failures with offshore companies. What are the key points to avoid such failures?

Please look at the pitfalls section on this site.