Archive for February, 2012


What are start-ups asking…..

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I had written before that most start-ups are expected now to work with remote development teams in order to lower their burn rate.   But what about those other start-ups?  The ones that are six, seven or more years old and still call themselves a start-up.  In part they are doing this to set and continue a certain mindset; we move fast, we’re lean, not a lot of bureaucracy to get things done, etc.  So what about this type of start-up, what are they interested in?  As often as not they may keep everything in-house, thinking they move too fast to work with remote developers. They may have tried outsourcing (either onshore or offshore), but it failed. Sometimes I am hearing that they tried it 3, 4 or more times and every time it has failed. But they are still interested to try it again.  Can give them credit for wanting to try it again, but it is interesting to dig in to the reasons they give for the failures, in order to determine what not to do next time. Let’s examine a common reason given for failure and see what a start-up of this type can do to avoid this issue in the future.

One reason I have heard for why outsourcing has failed is “bad code”.  Now I can see that you do not want, and should never settle for “bad code”. As a customer, you should never settle for code that cannot later be easily maintained, that is not architected correctly, etc.  Also, of course you have a right to look at the code while it is being developed; it is your code that you are paying for. Certainly that should never be an issue. Often, however, when I ask exactly what was so bad about the code, “Why was it bad?”, the answers sometimes become a bit vague… I would expect to get answers which were more concrete, something like, “They wrote the app so that the entire survey was loaded in to memory, therefore the app could not easily be run on different telephones which had less memory.”, or something similar depending on the platform or the type of application in question. Or to hear a reason such as, “The developer did not document the code correctly, or at all.”

However, a more typical answer I hear is that it was just bad code (not from everyone of course, but often enough). Here in lies the problem I believe and I think you can see it too.  If you can’t define exactly what you didn’t like about it or what was not done correctly, then how would the developer know exactly what you wanted.  You may argue that you should not have to tell the developer to use common acceptable standards for the language they are developing in, or to comment their code, etc., with that I would definitely agree with you.  But if that were really the problem, then that is what I would hear from VP’s engineering or CEO’s of companies as the reason why outsourcing did not work for them in the past.  But I do not hear that, I just hear, “the code was bad”, which leads me to believe there is something else behind why it was bad.

So how do you get around this the next time you want to work with remote developers? There should definitely be a discussion of what you expect in the code, with the developers.  Telling them you are going to be looking at the code is one thing, well they should expect that you will look at it since it is your code and it will be delivered to you. But being more concrete as to what you expect as far as:  official coding standards to be followed, if your company has its own standards that you want followed, your expectations for code documentation, etc. Another suggestion would be to include as part of your weekly deliverables, or once every couple of weeks (at least at the beginning of the project), code reviews. Have the developer explain why they wrote something in a certain way. Also, if you expect architecture to be done as part of the project, or if you are not providing it, have the developer document the architecture and send it to you for your review, then have a discussion on it before the developer goes forward and starts writing code. Following a few simple methods of getting to the goal of having good code, can eliminate the “bad code”, and the frustration that goes along with it.

Categories: entrepreneurs, Outsourcing Offshore, Outsourcing SMB's, Outsourcing Ukraine, Project Management, Virtual Teams |


How a New Technology Platform Helped Startup Minimize Card Not Present Subscription Decline Rates

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The subscription business model is exploding. New software companies now offer software-as-a-service applications (SAAS) instead of perpetual licenses. Services such as Spotify, Dropbox , Skype and thousands of others offer subscription services. Traditional companies continue to depend on subscriptions, such as newspapers and magazines. Even utilities, debt collection companies, health care providers and direct selling merchants offer subscriptions for consumable products (ever receive a monthly shipment of nutritional supplements you never really wanted?).

What do they all have in common? Credit cards.

More specifically, these merchants use what are known as automated recurring billing (ARB) platforms for merchants who use card not present (CNB) billing for their clients.

Parallel to this is a crisis in credit card payment declines.  Card not present merchants using ARB platforms suffer from payment decline rates of 10-20% of their subscription base due to a variety of factors, such as cards hitting their limits, cards that have expired, or cards that have closed.

This can take a huge bite out of profits when a merchant as to continually resubmit payments.

Card not present profitability solutions

CentreBack payments, a payment profitability solutions service for card not present recurring billing merchants, was founded by entrepreneur Michael Bradley, to solve this problem.

Traditionally merchants have used their own internal “re-try” logic when an attempted authorization fails. However, CentreBack realized merchants needed a more repeatable, quantifiable and strategic approach to managing payment recovery – a key component in managing the entire lifecycle of a customer.

CentreBack created a recovery platform that:
•    Increases the ability of firms to automatically recover failed payments
•    Seamlessly integrates into automated customer contact solutions, and
•    Identifies sales channels and/or campaigns which lead to higher decline rates

So how did CentreBack get to where they are today? considered, then rejected

CentreBack needed to create an automated payment recovery platform to address this market problem, and turned to Softjourn, a software engineering firm, specialized in building sophisticated and secure payment processing solutions for demanding U.S. and European clients.

We helped them build a state-of-the-art product called Revenue Patrol which was designed to increase merchant’s authorization success rates by 25%. Initially we looked at,’s cloud computing platform, on which to build CentreBack’s solution. However, we rejected it due to its lack of portability across platforms at the time.

Java based solution for portability and flexibility

Eventually we suggested to CentreBack that a Java-based solution, which is more portable across platforms, would give CentreBack more flexibility with the application.

As part of this project, Softjourn provided an end-to-end service that included design, development, testing and deployment of the Revenue Patrol application.

One of the key requirements of the platform was to develop the application in accordance with PCI Data Security Standards for payment applications. This includes security features such as:

•    Encryption configuration for credit card fields
•    Gateway configurations
•    Removing private data from completed or hard failed transactions.

We worked with CentreBack’s PCI compliance auditor to assure that all PCI requirements were met.

The delivery also included an easy to use business-user interface, an integrated analytics package, and a sophisticated rules engine to support complex business processes associated with exception management for payment. We ensured that Revenue Patrol was able to call out to third party contact systems, such as text messaging, emails, or IVR solutions.

The project development process and governance included mandatory weekly meetings for project status reviews, answering questions and solving any issues that may have arisen.

“I felt like there was a much more professional approach, distance did not become an issue, really the team understood the goals of the project.  A lot more collaboration rather than a one way push of here is what you need to do,” said Mike Bradley, CentreBack’s Founder and CEO.

The solution was built using Linux, PostgreSQL, Apache Tomcat, Sun Java SDK, as well as the Spring Framework, Spring WebMVC, Spring Security, Hibernate ORM, Jasypt + Bouncy Castle security frameworks.  Libraries included jFreeChart +ceWolf, Java Mail, Jasper Reports, Quartz scheduler and Apache commons.

Revenue Patrol was deployed in a PCI compliant private cloud using Rackspace as the host.


Revenue Patrol has successfully been launched and is now in Beta testing. The next step is to roll this out to a larger group of sizable card not present automated recurring billing merchants.

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


How a startup firm can compete with large banks in the international money transfer business

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International remittance from Latin American immigrants to their home country is a huge business. In 2012 remittances to Mexico alone totaled more than $21 billion. Most recipients of international remittances are lower income households who are largely unbanked.

Solutions for sending money abroad have varied from Western Union and MoneyGram to smaller startup companies.

Viamericas (, a Bethesda, Maryland-based company, is one of the more innovative companies that have emerged to provide services for international remittances in Latin America and the Caribbean.

International money transfers using Check21

Viamericas had been using a Check21 system provided by a nationwide bank to fund remittances. The Check Clearing for the 21st Century Act (Check21) of 2003 provides guidelines and standards in check truncation. Check truncation is the practice of using an electronic image of a check to substitute for a physical check when presenting to the receiving bank for settlement.

With its fast rate of growth Viamericas knew it would grow out of its bank-provided solution, and had to develop their own solution. But their network of nationwide independent agents had grown accustomed to their current system, presenting a challenge: how to create an alternative solution that was acceptable to their agents.

Developing a secure system to rival large banks

Viamericas needed to develop a system that satisfied their agents’ usability requirements, provided the functionality of larger bank solutions, as well as additional functionality that allowed them to become more competitive.

They turned to Softjourn, a development firm specializing in designing and developing secure financial applications, with headquarters in the United States and development facilities in the Ukraine.

Softjourn designed, developed and tested a centralized server application and a client check truncation application. They also worked with Viamerica’s current Check21 solution provider to design, develop and test the sending of electronic cash letters and the receiving of electronic returns files between the bank and Viamericas.

The new solution also included functionality which was not available with the current solution, such as the ability to put checks on hold automatically, based on system-wide restrictions established at the central Viamericas location.

An integral part of the new solution was to research, test, and recommend the appropriate recognition software to be used for the final solution.  Initially Softjourn created a long list of potential OCR (Optical Character Recognition) vendors; including open source vendors and large-scale commercial products. The Check21 application being developed was to replace the one that Viamerica’s was paying for on a subscription basis, from their bank.  That solution included high-end OCR recognition including recognizing CAR – Courtesy Amount Recognition (the amount in characters) and LAR – Legal Amount Recognition (the hand written amount). The solution Softjourn chose also had to take in to account that almost 50% of the checks processed by the new system were going to be hand written, so the OCR software would have to be able to recognize the amounts on a lot of different checks. Having a .NET version was also a requirement as the new Check21 system was being written in .NET.

Some of the vendors evaluated included:

As well as several higher-end solutions:

Evaluation included installing all of the different products, creating test image files based on real check images, supplied by our client, and comparing the results.

After initial results and creating a short list of possible vendors, Softjourn recommended the QuickStrokes Banking Edition, from Mitek. The product included ICR (Intelligent Character Recognition), OCR, MICR (Magnetic Ink Character Recognition), CAR and Business LAR. It did not include hand-printed LAR and was therefore less expensive. Mitek did have a QuickStrokes Premier Banking Edition which could read the LAR field, but in most cases it was not necessary. Recognition results averaged 92% with the Premier edition and 78% with the regular Banking edition.

Using bank functionality to compete with banks

Check truncation systems are usually the realm of banks, but smaller firms, such as Viamericas, can also use this functionality.

Softjourn helped Viamericas develop their own system, allowing them to compete more effectively against their competitors and larger banks.

Luis Gonzalez, CFO of Viamericas, said: “This project puts our company in a competitive advantage with regards to our competitors because we were able to emulate what large banks are doing quickly and effectively even before some of them launch their own product, providing unbanked customers with the means to use financial services.”

Their agents also liked the solution.

Esteban Bernal, Viamericas’ VP of Engineering, said: “Our agents like working with the new Viacheck system over our old solution. Their work is consolidated on a couple of screens making it much easier for them to use.”


The United Nations estimates that 191 million immigrants send money to relatives back home.  The World Bank estimates that $550 billion was remitted globally in 2008.

This is a huge market with a huge opportunity for financial services providers, and advances in technological solutions making it easier to securely transfer and process money abroad, has enabled more firms to take part in this lucrative market.

But financial processing applications are complex. If you want your share of the billions traveling back and forth across borders, you need the right partner to help you.

Categories: Outsourcing SMB's, Outsourcing Ukraine |