Archive for September, 2008

13
SEP
2008

Second Generation Outsourcing

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There has been alot made of  what is called “Second Generation Outsourcing”. For purposes of this discussion, I will use the definition set by the vendor which claims to have pioneered “Second Generation Outsourcing (SGO)”, Anantara Solutions.

In look at how they define “Second Generation Outsourcing”; combining business consulting and IT services. I would like to just ask the question, “How does this differ from the services that for example, IBM, has been providing for years? They used a huge network of specialized vendors to assist in providing services to their clients all of the world. Is this SGO model really any different?

Categories: entrepreneurs, Outsourcing Offshore, Outsourcing SMB's, Outsourcing Ukraine, Venture Capital |

13
SEP
2008

Set your expectations when Outsourcing!

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Often I hear from people who have outsourced offshore in the past that the previous team or company they worked with did not meet their expectations. My first question is always then, “What were your expectations?” The most common first reaction I receive is one of surprise, and then an answers range from: “I expected the project to be done on time!” or “I expected them to deliver what I asked for.” At first look these seem like very valid expectations to me, if you engage someone or a company to do a piece of work for you, and you are paying them to do that work, you expect to get it done on time and within the budget that was agreed to. Unfortunately it does not always work that way.

One reason an outsourced team or company may not meet your expectations is how the expectations are set. It is one thing to have a set of expectations that are agreed to at the beginning of a project, and another to look at what goes on during the course of a project. What typically happens on many projects is specs change as the project goes on, even if it is a very short project. Users or project owners see the results as the project goes on and they change their mind on what they want to see, on how they want functions to work, etc. Typically in a fixed bid project, there will be built in some time to allow for potential changes and to give the buyers some leeway. But there is a finite end to the number of changes that will be able to be done in order to meet the original project deadline and to meet the original budget. Change cannot go on forever without one or both of those items being affected. Unfortunately what is often remembered, even if excellent documentation is maintained, when a post-mortem is done, is that the project went outside of the original timeline and outside the budget. It is best if both sides agree that time has to be built in to a fixed bid project to allow for review by users and to undertake the corresponding changes that are always a result of that review; at least x number of days.

Probably both sides; clients and vendors need to do a better job of working together to understand what needs to happen during the course of a project and what the extra time is for, how it is used and what its limitations are; especially where fixed bid projects are concerned.  Often both sides like to rush through the proposal stage and showing the final cost rather than taking the time to understand what the actual project will look like. If the time is taken to understand how the project will work, on both sides, more realistic expectations can be set on both sides and the more likely the results of those expectations will be positive.

Categories: Outsourcing Offshore, Outsourcing SMB's, Outsourcing Ukraine |