Five misconceptions every CIO has about outsourcing. And why they are just that – misconceptions.
“This is why our society is frazzled; this misconception that we can consciously do more than one thing at a time effectively.” – Deepak Chopra
Nothing gets the CIO or the CEO of a company more energized than an outsourced development team that is working as smooth as a well-oiled machine. Requirements are gathered, functional specs are raised and approved in tandem with the business analyst and the technical heads, technical specs are laid out and the developers are all ready to dig into it. The quality team knows exactly what the customer wants (and what to test for). And when D-day rolls around – presto! A new and improved product, process, app or solution that will solve your critical business problems.
And the team goes back, all electrified and energized, to the load, rinse, repeat routine.
Is this the story with your outsourced team? Or does this sound like scenarios that outsourcing fairy tales are made of?
If you have answered ‘yes’ to the fairy tale option, is it because you have been burnt before on the outsourcing fire? Or is it that you have way too many concerns about outsourcing that you have not given it a fair try?
Whatever the reason may be (or as we say at Suyati, excuse!), we address the FIVE most common misconceptions that every CIO has when outsourcing his development work.
1. Does outsourcing really work? Or is it all hype?
Mukund Krishna, CEO, says: Make sure your team is pro-outsourcing from get go.
Outsourcing does work. Absolutely! However, today a CIO no longer thinks about outsourcing just development work. What they want to do is source the best ideas, processes, innovation, creativity and delivery. Cost and budgeting is still a factor, but only if all the other criteria are met.
Take for example, the largest e-publisher in the world who has been our client since July 2010. They came to us for precisely three things—innovation, prompt delivery, and transparency. While each client has certain precise requirements from their sourcing vendor, these THREE might top the list.
However, for sourcing to work successfully (and beyond expectation) every client needs to answer these questions truthfully –
- Does my team have the ability to work successfully with a remote team?
- Is their mindset pro-sourcing? Do they understand what is involved when sourcing their development?
CIOs may be pro-sourcing, but once the contract is signed, his team needs to work with the vendor’s developers and tech leads. So when we start the engagement process, we first ensure that the client’s team is ready and willing to collaborate. That willingness is critical for outsourcing to work.
Resistance to outsourcing among the client’s onsite staff is one of the major reasons for failure of many outsourcing engagements. Fear of losing jobs and a perception that outsourcing has been chosen merely for reducing costs is a major reason for employee resistance.
On the contrary, the actual reason for outsourcing in most cases may be internal capacity constraints and inability to scale up. Transparent communication by the client’s management team to their own employees about the reasons and objectives of outsourcing could reduce the employee resistance. This in turn, will increase the chances of success of your sourcing initiative.
2. What is so special about a vendor’s team? How do I know they will hire the best person for my job?
P Vincent, Director of HR, says: We make it really hard for a candidate to become part of our team!
“One of the very first people that a prospective client meets (or talks to) at Suyati is me, as head of HR. Their concerns vary from our ability to rope in the right technical people to our ability to train and retain great employees. Communication, attitude, time management—their concerns touch every aspect of an employee’s skillset. We understand their concerns.
Which is why, at Suyati, our employees often remark – If you can pass Suyati’s selection process, you can get through an interview in any other company. I am particularly proud of that statement! I really make it hard to hire a member of our team. As a result of our stringent hiring processes, our brand now is one of the best places to work in Infopark. And every member of our 140+ strong team is handpicked by us to ensure that they have the right attitude to get the job done.
How do we do it? By ensuring that our team continuously works on products and projects that are technically intensive. Our experienced top leadership and middle tier technical leadership resources have joined us from renowned companies like Microsoft , Siemens , TCS, Wipro, E&Y, BOSCH, Cognizant, Thomson Reuters etc. They help mentor an open and free environment that encourages product ideas and technology ideations, which in turn have constantly attracted talent to Suyati.
Case in point? Our Salesforce evangelist’s proposal was one of the final 2000+ ideas selected by Dreamforce from over a lakh entries to present at Dreamforce 2014. Our client won the Ektron Site of the Year Award in the Best Integration category. And one of the best employee-led initiatives at Suyati? http://www.saaspie.com/
So why is it that 5-10% of our workforce is rehires? Why is that we are able to attract employees from larger and better branded organizations? I think the main reason is that we are able to showcase a technical path for all employees and ensure that their employability at any given date is intact. Want to know more? Suyatians share their experience of growth in Suyati.
And if a client decides to go with Suyati’s Dedicated Global Team model, the chances of employee turnover is reduced considerably. The offshore team members feel as if they are an extension of the client’s team onsite. Close bonding is encouraged and this gives the offshore team members more ownership and sense of recognition. Daily peer to peer interaction between offshore and onsite team members ensures that the offshore team members are always up-to-date about the road-map of current and future projects at the client’s side.”
3. What if things go wrong after I have invested in an outsourced team?
Unnikrishnan (UK), Program Director, says: The key to successful outsourcing? Successful communication.
Yes, sometimes things go wrong. In spite of daily communication (sometimes even multiple times over the course of a day), things can go wrong. Sourcing however does not mean things will be perfect at all times. Instead, if you have the right vendor, it means they have the communication mechanisms and processes in place to warn in advance, inform when it happens, work out possible solutions and execute it pro-actively.
Not everything is hunky-dory in the world of outsourcing. Several factors could go wrong and how these are handled separates top outsourcing providers from mediocre ones. When communication is happening via electronic mediums as opposed to face to face, a series of issues could crop up, impeding the efficiency of communication. Cultural, linguistic and time zone related issues also come into play.
This is how we address this critical aspect of communication –
We provide state-of-the-art audio and video communication facilities to the offshore team members. Daily calls happen between the offshore and onsite teams to discuss work allocation and prioritization, status updates, and resolution of any impediments. Usage of web based project management and collaboration tools also improves the quality and effectiveness of communication. Weekly management-level meetings and setting up of effective escalation process also helps.
4. I will lose control and visibility of the entire project. How will I know what is happening?
Varun Phull, Sr. Business Analyst, says: The control is always with the client. Always. Methodologies like SCRUM and Agile help with the planning aspect of it, and in ensuring the client knows what is happening every day.
Lack of visibility and control of the vendor organizations’ development processes is a major problem faced by clients.
Suyati’s Dedicated Global Team model addresses this by ensuring that the management and control of the offshore team lies with the client. Suyati ensures quality infrastructure and communication facilities, resource ramp up, engagement, motivation and retention, and also enables overall outsourcing activity. The offshore team members login to the client’s network via VPN and share the same set of tools and quality processes as the client’s own team members. This also improves visibility and control.
However, high visibility and control also require a high level of communication and integration between all parties involved, which is why we prefer Agile methodology to constantly involve all the stakeholders.
We have weekly meetings with the key leads on the client team, during which we share performance gaps, vacation schedules and motivational issues. Our main aim is to ensure that every member of our team is being utilized in the best possible way by the client team. This is the time we also learn about upcoming projects, and can plan to move the most relevant resource(s) as the new project comes up. We also encourage the client’s management team to address the entire offshore team at least on a quarterly basis. Periodic visits of the client’s delegation to the offshore development center, and vice versa, helps in improving the cultural alignment.
5. Why do I need to outsource? I can do all these by myself, can’t I?
Revathi Krishna, Director, says: Yes – a client can do it all by themselves. And some do too. But as a CIO, don’t you want more for (and from) your team?
Yes, a client can do it all in-house. But it all boils down to what a CIO wants to do with his time and that of his team’s on a daily basis. Will he have his team code, or research? Will he want his team to test or understand customer needs? Will he spend his time battling daily issues or chart out his product roadmap with the Executive team?
Sourcing your product development means you will do less of the former and more of the latter—spend more time planning, researching and analyzing how to make your product more sturdy, viable and/or innovative. So as a CIO, you need to balance what you want from (and for) your team, and what you want to delegate externally.
Conclusion: Outsourcing to Suyati works. For whatever reasons you have in mind.
Transparency, delivery and innovation – these three words drive our team to create great products and solutions for our client. But don’t take our word for it. Read our case studies to see how our clients have benefited by sourcing their development to us. Or read what some of our clients have to say about us.
However, if all your misconceptions have been removed (!) and you just want to get started on sourcing immediately, contact Rajan Shankar, our General Manager, at Chicago.