Tuesday, January 26, 2010

Dedicated teams model is gaining popularity

According to "Central and Eastern Europe IT Outsourcing Review 2008" - a research conducted by Ukrainian High-Tech Initiative,during 2003-2007 the customers were tending to switch from project-based outsourcing model to hiring dedicated programming teams, - so that the customers contract and manage IT staff directly. Although fixed-price project model seems to provide less risks, it also restrains significantly the development process and can result in overestimated budgets. According to the research results, since 2003 until 2007 the number of project contracts has fallen by 30-35%.

As one of the answers to Onstartup questions about selection the right agile IT Outsourcing provider Scott Drake, the Owner of the Data Pros (Web development company in Louisville, USA) has made quite an interesting statement - “I built my team in Argentina … I interviewed all of the developers and still made one bad hire. It took two months for them to go into the market to find the right talent that would work well on my team to replace that bad hire. The management was willing to hire another employee for my team because I built a relationship with them and treat them and its employees very well. And they know my intention is to build a mutually beneficial relationship with them and keep my team for at least a couple of years, not just two months. It took me months to find the right vendor/build the right team. Unfortunately, I could not find an easier/faster solution.”

I wonder whether our readers have had similar experience. How difficult was it for you to select the staff for your remote team? Is one development interview enough for the decision? What questions were the most important for you – was it their experience, or ability to solve the problems, or the communication skills?

I have asked Mr Scott Drake some other questions about his experience managing his dedicated team. I will put his answers together along with more relevant data into the next blog post.

Thursday, January 14, 2010

How to build the communication between customer and vendor for successful outsourcing?

Even if there is enough budget, resources and time to fulfill the project, still one problem can arise between customer and vendor when outsourcing - it is the process of communication. Especially the complexity of Agile Development process (constant changes in requirements) in contrast to building a product from a set of requirements (Waterfall). The communication in this scenario adds more issues and one can’t ignore but have to give highest priority to the process of communication between parties. Here are some of the points to implement that can improve the communication process
  • The key point: people should co-invest time in building a successful cooperation and work on effective means of communication. It is not 'throw your projects over the wall' but 'make a strategic decision to outsource' and 'invest time to build a strong partnership with your supplier'. The processes of client and supplier have to become interwoven and both sides have to work hard to create a balance in the cooperation
  • The communication should be frequent, weekly meetings are to be changed to multiple meetings a week. That results in keeping everyone's connected and updated with the ongoing process
  • People should try to use phone or skype calls frequently to avoid communicating everything through chat or email. And there should be an online system to document everything that is communicated (also the summary of a phone call)
  • Involve engineers in the meetings along with leads and architects
  • Think through what is to be communicated, just like planning an effective meeting it requires thought and structure.
  • Don't be afraid of communicating bad news - but make sure you have a way of resolving any pains you may encounter. Try to present more than one option when dealing with problems. We always call them "opportunities". It is an opportunity for change with a positive result.
And remember, all of the items on your list can be organized and planned; it's the people part that needs to be taken care of too. First, a little chit chat, the personal touch, can go a long way.

Wednesday, January 13, 2010

IT Trends for 2010

What will be on the top in information technologies in 2010? Though predictions vary, most of them point on virtualisation, cloud computing and green IT.

According to the survey by a German hightech association BITKOM, most popular trends are cloud computing, virtualisation, followed by mobile internet, IT-security and IT Outsourcing.

Irshad Raihan, Worldwide Marketing Manager at IBM, names the trends for IT in 2010 at the developerWorks podcast. He predicts the virtualisation, cloud computing and green IT to be the major trends in 2010.

Six CIOs were interviewed by Jason Hiner at SIMposium 09 in Seattle to find out what they consider to be the main IT trends in 2010.The answers differ significantly and can be viewed in 15-minutes video at ZDNet. Peter Whatnell, CIO of Sunoco, names virtualization as the main trend. Tony Scott, CIO of Microsoft, has named the consumerisation of IT. Patricia Coffey, Vice President of Technology for Allstate is sure that Green IT will gain most importance in 2010 - both as a way to reduce energy consumption of IT centers and also as a way to apply technology for environmental purposes. Curt Pederson, CIO of Oregon State University has selected open-source to be the most trendy in 2010. Ed Trainer, CIO of Amtrak, is concentrated on how can information technologies further support business. Larry Bonfante, CIO of U.S. Tennis Association has stated the cloud computing to become the main trend for 2010. Jason Hiner underlines five most popular trends in his video at techrepublic - these are smartphones, WAN acceleration, e-readers, desktop virtualisation and the consumerization of IT.
Which are your predictions? What is going to be most important and challenging for you in the year 2010?

Thursday, January 7, 2010

Definition Of Done (DoD)

Here is our definition of done:

  1. Code implemented
  2. Builds without errors
  3. Code commented, commited to source control
  4. Peer reviewed, meets development standards
  5. Unit tests written and passing
  6. Deployed to system test environment and passed User Acceptance Tests (UAT)
  7. Build/deployment/configuration changes implemented/documented/communicated
  8. Relevant documentation produced or updated
  9. Remaining hours for task set to zero and task closed

Wednesday, January 6, 2010

The Benefits Of Small Companies Over Big Companies

We live in the world where big seems better. Small feels ... well, unsafe, in general, not mention the fact of collaboration with. But sometimes we overlook the fact that huge businesses have serious weaknesses in areas where small businesses shine and then begin to realize that small business is a great business, and I'll tell you why.
Having business with small companies really have the number of advantages over big companies. Here they are:

Experience. Big companies are always well-known and widely advertised. One can often hear that some company has 100 year experience, that sounds very promising and impressive, doesn’t it? But have you ever thought that only personnel experience really matters, but not the company’s. That is the point. You can find qualified and professional employees both in small and big companies, and it never depends on the age of the company.

Better customer care. I'm sure you've noticed that the larger a company grows, the harder it becomes to provide good customer service. Just try to find the right person to help you on the phone in a huge corporation - it'll drive you crazy. But when you ask for the owner of a small business, chances are you'll be speaking to her or him within a few minutes. Hence, more often than not, burning business decisions can be made without the delays.

Flexibility and immediacy. Things happen quicker in small companies. Small businesses are positioned to quickly adjust to change, they know that their ability to make rapid decisions and implement course corrections is their key to success. Decision making is streamlined and employees often exercise a wide range of skills and experience, rather than to be specialists in only one area. If one employee is on leave or needs to be temporarily reassigned to a different project, another employee is already trained to take his or her place.

Commitment. That is not to say that the management teams in large companies are uncommitted. The personal stake in small business is greater. Business owners' self-image is tied closely to their businesses. They will not let these businesses fail. They take it personally.

Lower costs, equal or better quality. When cooperating with big companies, you pay 20 per cent only for the popular brand of the company, but not for the job done itself, it’s like buying white plain T- shirt from Gucci for unreasonable price which is of the same material, quality and tailoring as from a shop. Just think what you pay for. Does it worth it?

Responsibility. Writing this article I interviewed some my colleagues who worked in businesses of a different size and all of them pointed out, that when working in big companies, people often shift responsibility on their colleagues, and think that somebody will do his job. Otherwise in small companies employees know that nobody except them will perform their own obligations and tasks, hence they are more responsible, ambitious and motivated.

Freedom to innovate. Due to the structure of the small businesses (flexible schedule, no dress code, positive atmosphere) employees have the freedom of action, that really can bring to customer’s project innovations, new decisions, ideas and creativeness. You can see that innovative small businesses are considerably cost-effective to cooperate with than to innovate on your own.
Thus, dear readers, being big isn’t a great deal. But delivering top customer service, a passion for excellence, a willingness to dream and create, and the freedom to make timely decisions - these are worthy of acclaim.

Why are people so much attracted by fixed-cost project outsourcing model?

Sometimes customer insists on fixed-price project model. It is stated, that all the requirements are already perfectly defined.
Is it really so easy to predict all the job scope? Would it not be better to be flexible if required? It sometimes seems to me, that fixed-price projects simply transfer the risks to the outsourcing vendor. This reflects in overestimated prices and non-optimal planning and resourcing distribution. So I wonder, how many fixed-price could have been more successful if there would be more flexibility and client-vendor interaction added?
What are your experiences with different pricing models? Which model has proved to be most effective for both parties?

Nearshoring vs Offshoring

People are used to the term "offshore" and are surprised to hear the words "nearshore programming". Is it just another name of the same model? What is the difference?

As for me, "nearshore" implies first of all "better understanding". This also means close live communication, often face-to-face visits, similar culture and even priorities and approach to work. And this influences quite a lot the success of IT outsourcing! Sure, going offshore has also certain benefits when compared to nearshore - for example, you can have your offshore team working while you sleep, so the decision, whether to find an offshore- or nearshore partner must be individual

Tuesday, January 5, 2010

How can Startup win from IT outsourcing?

Can a startup deal with IT outsourcing? Isn't it that requirements for development are too often unclear, the scope of the job changes constantly, new development tasks arise?

Is it real to manage an outsourcing partnership when you are a single entrepreneur or when there are several founders/managing partners? How can it be implemented?

Ainstainer Group offers support for young entrepreneurs. We comprise teams for startups at cost price. Why do we do this? Because the service we're offering is rather new to the market and we want to engage as much customers as we can! And of course because we love the entrepreneur spirit and we want to contribute to new achievements. We want to help you make it happen!

How To Implement Agile IT Outsourcing

Mark Rickmeier in his webinar related to Offshore IT Outsourcing shows, how to set up the work with a distributed developmengt team and how to manage the communication issues. Mark also shows how to implement agile processes for IT outsourcing. It is well-known, that most of the issues of IT outsourcing are solved by implementing agile approach. So pretty often a company willing to outsource IT (offshore or nearshore) is striving to find agile approach on the vendor's side as well. Nowadays agile is a buzzword, and it's very easy to claim being an agile IT outsourcing vendor.

How can a project manager be sure that outsourcing will contribute to internal agile project management approach? Which techniques have proved to work out for you? Do you consider Scrum Alliance Certification to be necessary for the members of dedicated team?

Dedicated Team - Is It Really So Complicated?

When I'm talking to customers, who are interested and recognize the potential of having their team nearshore, but who have had no experience of that kind yet, first thing I'm hearing is - 'we must sit and think, how will the collaboration go.. are we mature enough?'

I can understand that managing your team remotely may seem like a challenge. But once you try it and work out your communication strategy - it is very easy. Even on the stage of team selection one can try the interaction with future team members to see, how deep the mutual understanding is, and if the miscommunication might be an issue.

So basically, the dedicated team model is much more simple than project-based outsourcing - especially for those individuals, who have no experience with outsourcing yet. When you were just starting with IT Outsorcing, what challenges have you faced? Was it complicated to set up processes to manage the working process?

Ainstainer's Elevator Pitch

If I were having an elevator ride with potential partner, and would want to attract his attention to what Ainstainer does - I would say the following : we create client's teams of programmers, that work remotely at our Ukrainian office under client's direct control. So even a very short ride would be enough for a dialogue! There would even be some time left to mention that we can source a team to work in agile environment, and that we support startups by comprising their teams at cost price!