Everybody is talking about outsourcing, off-shoring, yada yada yada! What does all this really mean? The easiest way to put it......if you don't know a specific function that is key to your businesses success, and not one of your core competencies, LET SOMEONE ELSE DO IT! Why waste you valuable time trying to figure out which 401(k) plan is right for your employees when there are people that spend their entire career researching retirement plans. Do you know the difference between Section 125, 129 and 132 of the Internal Revenue Code? Do you really care? How about all those employment laws that you know are out there but no one has sued you yet so you just ignore them?? All these issues can create (or avoid) legal problems as well as help you attract and retain the best employees. So how do you get your company offering the best benefits and complying with every letter of the law.....OUTSOURCE IT!
Professional Employer Organizations (PEO) offer small to medium sized employers the ability to compete for the best talent by providing them with a menu of benefits typically offered by larger organizations. 401(k) plans, flexible spending programs, health, dental and life insurance are just a few that become available when you sign up with a PEO. Don't forget about your companies compliance with all those non-business friendly employment laws. One over-sight can land you in court paying hefty fines and legal bills. Synergy puts one of their HR professionals on-site to help business owners create and communicate all the necessary policies to keep you in compliance.
We all got into business for a specific reason. I believe focusing on that reason will make any business successful. Do what you do best and Outsource The Rest!
Tuesday, March 27, 2007
Monday, March 12, 2007
Outsourcing with Specialized Teams
The article explores the benefits of using specialized outsourcing teams as an alternative to general contractors.
In recent years, outsourcing in the Information Technology industry is gaining momentum and most of the companies are starting to discover the potential benefits of using it. Some of the key benefits of using outsourcing resources are as follows:
- Cost reduction.
- Increase in resource flexibility.
- Access to talents without the need to hire them.
- Strategic partnerships that allow penetration into foreign markets and access to new technology.
Despite the benefits that outsourcing brings many projects fail and the outsourcing users become very often frustrated with the issues that they face. Some of the issues that need to be addressed properly when dealing with outsourcing projects are as follows:
- Setting the right expectations about the benefits of the specific outsourcing project. It is unrealistic if the user is only considering the cost reduction based on the difference in the hourly rates.
- It is mandatory that the proper communication channels are established between the enterprise and the outsourcing team. There will be people assigned that will spend most of their time just to ensure the proper communication and monitoring of the projects.
- The culture differences need to be addressed and both parties need to be understanding of the cultural background of each party.
- Selecting the vendor need to be carefully considered and should be based on the size of the project. If the company has the needs a small outsourcing team it is better to research smaller outsourcing service providers instead of pursuing big established names because they may not receive the desired attention and resources from them.
More aspects about outsourcing that need to be considered are related to maximizing the results of the outsourcing relation. The aspects below are oriented more towards the outsourcing of the software projects:
- Writing software is a group effort therefore team stability and experience is a key. Despite of the efforts by some methodologies used to describe software development using manufacturing terms there are a lot more human factors involved that make it difficult to achieve good results if not considered. There are many examples of how small teams of dedicated and proficient in specific area programmers can deliver sophisticated products in a very short time frame and of very high quality. The difference between using a team assembled just for the project based on the available resources and the specialized stable team could be dramatic in terms of the quality of the code and the time need to be spend to deliver the product.
- A good communication between the user and the team is essential for the project success. Adding an additional layer to shield the project development team from the end user may require significant additional efforts and may cause substantial increase to the cost without adding any benefit. There are companies trying to use cheap and not very well trained resources to work on outsourcing projects using front end people to communicate with the client and translate the requirements to the outsourcing team. This may cause increased project time and low quality of the code that later may require a lot more effort in maintenance. Using well trained and experienced outsourcing teams with indirect monitoring of the project and consultants on site on demand can dramatically reduce the cost associated with the project and give substantially higher quality code that is easily maintained and extended.
- A proper definition for the outsourcing project. The project needs to be well defined and hopefully encapsulated. This depends on how the enterprise is operating internally with their software projects. If the enterprise is using the paradigm of building blocks for their software development that are well encapsulated it is a big advantage when defining the outsourcing work. This is giving the enterprise full control over the infrastructure used for the project and much easier definition of the outsourcing project. When possible it is highly recommended for the enterprise to own the architecture of the project to avoid being dependant from the software vendor in the future.
- Selection of the right outsourcing vendor and governance of the project are critical for the project’s success. Despite the advantages of using specialized teams for outsourcing work it is difficult to find these teams, especially in case of small size companies. It is beneficially to contact consulting companies that have established relations and offers access to group of teams specialized in different areas. Companies offering access to specialized teams could be used also for the initial setup of the project and the following governance. It is important to ensure that the company is not just a broker with a database of available resources but has well established relations and work procedures with outsourcing teams. After project inception the role of the consulting company is to monitor the project progress while minimizing its active involvement in it. The communication is better to be hold between the client and the outsourcing team under the supervision of the consulting company that should take action if the communication channel is not working as expected. This will guarantee the fastest and clearest exchange of information that is critical for the projects success.
It is very important to identify the specialized team that could be used for specific outsourcing project. But what defines a team as being specialized? In the companies that are providing only outsourcing solutions it is difficult to find truly stable specialized teams. People are switched to different projects as they come along and they are usually familiar with the technology but not necessarily with the specifics of the area that they will be involved in, for example image processing, business intelligence, telemedicine and etc. Better candidates to offer specialized teams are the companies that have products in a specific area and that offer consulting/outsourcing services in the same area. In this case the employees of the company always work in the same subject area and therefore increase their expertise over time so they can provide very efficient and quality outsourcing solutions. Examples of these types of companies are many companies located in Eastern Europe. These are usually small companies concentrated on a specific area where they have gained substantial expertise over time and they provide product solutions for their clients as well as consulting and contract software development services. The problem that needs to be considered is that these companies have limited resources and they are usually working with a small number of clients that they try to keep for a long time. Therefore it is not very efficient for a company in need of an outsourcing supplier to try to identify the companies that are providing specialized teams because this could be a long and inefficient process, but instead to use the company that is already working and offering these types of resources.
In conclusion many companies offer outsourcing solutions but finding the right resources is not an easy task, but once accomplished your company may benefit greatly from increased productivity and flexibility which will place you ahead of the competition.
In recent years, outsourcing in the Information Technology industry is gaining momentum and most of the companies are starting to discover the potential benefits of using it. Some of the key benefits of using outsourcing resources are as follows:
- Cost reduction.
- Increase in resource flexibility.
- Access to talents without the need to hire them.
- Strategic partnerships that allow penetration into foreign markets and access to new technology.
Despite the benefits that outsourcing brings many projects fail and the outsourcing users become very often frustrated with the issues that they face. Some of the issues that need to be addressed properly when dealing with outsourcing projects are as follows:
- Setting the right expectations about the benefits of the specific outsourcing project. It is unrealistic if the user is only considering the cost reduction based on the difference in the hourly rates.
- It is mandatory that the proper communication channels are established between the enterprise and the outsourcing team. There will be people assigned that will spend most of their time just to ensure the proper communication and monitoring of the projects.
- The culture differences need to be addressed and both parties need to be understanding of the cultural background of each party.
- Selecting the vendor need to be carefully considered and should be based on the size of the project. If the company has the needs a small outsourcing team it is better to research smaller outsourcing service providers instead of pursuing big established names because they may not receive the desired attention and resources from them.
More aspects about outsourcing that need to be considered are related to maximizing the results of the outsourcing relation. The aspects below are oriented more towards the outsourcing of the software projects:
- Writing software is a group effort therefore team stability and experience is a key. Despite of the efforts by some methodologies used to describe software development using manufacturing terms there are a lot more human factors involved that make it difficult to achieve good results if not considered. There are many examples of how small teams of dedicated and proficient in specific area programmers can deliver sophisticated products in a very short time frame and of very high quality. The difference between using a team assembled just for the project based on the available resources and the specialized stable team could be dramatic in terms of the quality of the code and the time need to be spend to deliver the product.
- A good communication between the user and the team is essential for the project success. Adding an additional layer to shield the project development team from the end user may require significant additional efforts and may cause substantial increase to the cost without adding any benefit. There are companies trying to use cheap and not very well trained resources to work on outsourcing projects using front end people to communicate with the client and translate the requirements to the outsourcing team. This may cause increased project time and low quality of the code that later may require a lot more effort in maintenance. Using well trained and experienced outsourcing teams with indirect monitoring of the project and consultants on site on demand can dramatically reduce the cost associated with the project and give substantially higher quality code that is easily maintained and extended.
- A proper definition for the outsourcing project. The project needs to be well defined and hopefully encapsulated. This depends on how the enterprise is operating internally with their software projects. If the enterprise is using the paradigm of building blocks for their software development that are well encapsulated it is a big advantage when defining the outsourcing work. This is giving the enterprise full control over the infrastructure used for the project and much easier definition of the outsourcing project. When possible it is highly recommended for the enterprise to own the architecture of the project to avoid being dependant from the software vendor in the future.
- Selection of the right outsourcing vendor and governance of the project are critical for the project’s success. Despite the advantages of using specialized teams for outsourcing work it is difficult to find these teams, especially in case of small size companies. It is beneficially to contact consulting companies that have established relations and offers access to group of teams specialized in different areas. Companies offering access to specialized teams could be used also for the initial setup of the project and the following governance. It is important to ensure that the company is not just a broker with a database of available resources but has well established relations and work procedures with outsourcing teams. After project inception the role of the consulting company is to monitor the project progress while minimizing its active involvement in it. The communication is better to be hold between the client and the outsourcing team under the supervision of the consulting company that should take action if the communication channel is not working as expected. This will guarantee the fastest and clearest exchange of information that is critical for the projects success.
It is very important to identify the specialized team that could be used for specific outsourcing project. But what defines a team as being specialized? In the companies that are providing only outsourcing solutions it is difficult to find truly stable specialized teams. People are switched to different projects as they come along and they are usually familiar with the technology but not necessarily with the specifics of the area that they will be involved in, for example image processing, business intelligence, telemedicine and etc. Better candidates to offer specialized teams are the companies that have products in a specific area and that offer consulting/outsourcing services in the same area. In this case the employees of the company always work in the same subject area and therefore increase their expertise over time so they can provide very efficient and quality outsourcing solutions. Examples of these types of companies are many companies located in Eastern Europe. These are usually small companies concentrated on a specific area where they have gained substantial expertise over time and they provide product solutions for their clients as well as consulting and contract software development services. The problem that needs to be considered is that these companies have limited resources and they are usually working with a small number of clients that they try to keep for a long time. Therefore it is not very efficient for a company in need of an outsourcing supplier to try to identify the companies that are providing specialized teams because this could be a long and inefficient process, but instead to use the company that is already working and offering these types of resources.
In conclusion many companies offer outsourcing solutions but finding the right resources is not an easy task, but once accomplished your company may benefit greatly from increased productivity and flexibility which will place you ahead of the competition.
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