Pragmatic Outsourcing

Tips, tricks and traps of IT offshore outsourcing

Offshore and Code Review

Code review is a rather controversial subject. On one hand many SDLC gurus, tech leads, and architects agree that it could present an incredible value, on the other hand it’s one of the last quality procedures to be exercised in a majority of organizations. There are many reasons code review often takes the back seat, one of the most important ones is morale impact of code review. If let unmanaged code reviews can often cause tension in the team, things quickly become personal and instead of improving quality of code generate turmoil and finger pointing. Another reason of code reviews’ lack of popularity is their complexity in process sense, in particular timing.

I am in general a big proponent of code reviews and when it comes to offshore I found those irreplaceable. Specific implementation of code review depends largely on SDLC and outsourcing model used by the team.
If you fully outsourced your SDLC to an offshore partner you in a large degree will be at mercy of their internal SDLC. If you have an ability to influence your vendor’s processes you may want to request code review as a mandatory step and hope that it will be performed according to the best practices that are generally well known nowadays.

If you are retaining a portion of SDLC in your organization code reviews would be great candidates for components to be kept internally. I saw a few “best” practices in implementation of code reviews with offshore development teams that were rather successful:

  • Full / high percentage code review of the code by a senior on-site team member. S/he is typically assigned as a tech lead of the team and is in general responsible for technical integrity of the deliverables. S/he reviews (or produces) all high level architecture and technical design artifacts, and then reviews code produced by offshore developers. This model works particular well in waterfall models, with some modification it can be applied in more agile SDLC as well. There are obvious scale, morale and org issues with the model, most of them could be dealt with if tech lead(s) bought in the process and are qualified for the role.
  • Using code review tools that help facilitate and manage the process. My team has been using Cruicible with an offshore partner in Brazil with a large degree of success. By the way one of the measures of success could be the sustenance of the process: if dev team is using code review without constant nagging and pushing rest assured that code review is working out for you.
  • Spot check with follow up process could be rather efficient method of enforcing some specific development practices, e.g. coding standards. The idea is quite simple – if the code review reveals specific issue you need to follow up with the developer, after a little while you need to code review other newer artifacts and see whether the problem is addressed. When offshore resources are in ample supply I would exercise the rule of three – first time it’s your fault, second time it’s my fault, and there is no third time… Random spot check style of code review also offers great help in identifying skill / knowledge gaps and IQ issues.

In general code review only applies to organizations with a very high bar for code quality. And the bar should be held high for everyone independently of their location. Producing high quality code is not easy and it doesn’t happen by itself, it is quickly deteriorates if left alone. As one of my readers said – people do what you inspect not what you expect. In that light code reviews or code inspections play tremendously important role. Inspections by themselves are still not sufficient and must be supplemented with broad draconian measures of code quality that apply across organization. It is a matter of personal preference whether you use the rule of three or much softer measures, independently it is exceptionally important to link code quality to individual and individual performance appraisal.

I have to mention one rather controversial and very important point – high quality of code could be a luxury an organization could not afford, even more – in some cases it is an unnecessary extravagance. In today’s world producing code that doesn’t pass high standards is not at all as detrimental as it used to be in the days of PL/1 and C++ and even more so in the days of low performing hardware and memory limitations.

I remember having a long discussion with one of code quality evangelists – he was going on and on ad infinitum about how important is to write one beautiful line of code instead of three ugly ones. Very articulate and passionate about the topic he was impossible to win over especially considering my pragmatic and not so elegant position. We parted both even more firm with our original viewpoints.

When it comes to offshore it becomes even more important not to try to enforce quality of code that is above reasonable expectations. It is difficult to find high quality code producers even in this country with plenty of evangelists around. BTW, even the guy I mentioned before wan not fault free and left plenty of debris behind. So pick you battles wisely…

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July 7, 2009 Posted by Nick Krym | Managing Offshore Engagements | | 4 Comments

Spam Attack

A few weeks ago we went through upgrade of anti-spam software we use in-house. The Bayesian filter database got corrupted during the upgrade or possibly before it and for some reasons we could not restore it from backups. After much ado we decided to start anew. Software upgrade was quite impressive and new filters reduced the volume of spam dramatically, the majority of the users did not even noticed the little problem we had. It was not the case for me, all knowledge previous version of the software gained about my spam designation was lost and many of my service providers came back.

Today I receive a couple dozens of emails a day which come from valuable IT service providers that somehow got hold of my email address. Apparently they use smart email campaign software that bypasses very solid guards that on daily basis filter out a few hundreds of Canadian pharmacy offerings, lottery winning notifications and love letters from Russian girls.

Many of these email come from Corp-to-Corp brokers, resume distribution services, staffing pros and of course offshore providers.

“Nick we talked before…”, “Hi Nick, following up our earlier discussion..” – good opening statements as far as spam goes. “I would like to ask for only 15 minutes of your time…”, “Our VP of delivery is in your area and I would like to organize meeting in a restaurant of your choice…”, “we have just completed large Java…”, “CMMI5”…– polite, good attention grabbers, some teasers. A lot of good work came into preparing these campaigns. Having been on the other end of the table I can tell that some of those are first class examples of direct mail. However, in the end of the day the spam remains to be what it is – unsolicited email that clogs my inbox, eats my time, and sets me squarely against the author.

A few months ago a friend of mine told me that he was in a process of vendor selection planning on making a deal with a mid-sized offshore company based out India. The name one of the contenders sounded very familiar and I searched my desktop for it. In a few seconds I saw a dozen of emails, all in my spam folder, from a person I have never met or heard of – “Hi Nick, it’s been a while since we talked…” I mentioned it to my friend and that was enough for him to take the company off the list. I am pretty happy that my friend took it the same way I would, let it be our little contribution to antispam efforts across the globe :)

Many of the services in IT industries are commodities, offshore services is one of those. Direct access campaigns offering offshore services are going to generate the same response from me as telemarketing calls on a Sunday mornings. More so think of telemarketers who sell gasoline – “Hi Nick, Let me tell you about great deals we have at your nearest BP location! We offer outstanding selection of octane rating at very compelling prices!” There are a few good reasons why BP doesn’t do that… There are different means BP differentiates itself from their competitors, they understand that gas is a commodity and do not spam me with “once in a lifetime opportunities”.

I guess one of the reasons offshore vendors elect to use direct email campaigns is that they do generate response, I can imagine that click through ratio is exceptionally low but if you get one contract out of 100,000 emails it more than pays for the effort. Considering cutthroat business offshore suppliers are in you can’t blame them for it. As a matter of fact the only people to blame are VPEs, CTOs and other potential buyers who open and respond to those emails… Hey guys – please don’t do it! Don’t buy from spammers. If you want to find an offshore supplier go about that in a meaningful way – get lists from respected directories, ask for references, issue RFPs, use offshore advisors, and so on. You will end up with a higher quality provider and plus you will help all of us…

June 17, 2009 Posted by Nick Krym | News, Articles, Thoughts and Comments | | No Comments Yet

Red Flags to Watch Out For

How do you know that a relationship with your vendor is going south? Of course if all your partner’s employees just do not show up for work you know that something is rotten in the state of Denmark. That would be somewhat unusual event and probably irreversible. The goal here is to identify early symptoms of a fatal disease of deteriorating partnership. In techno world we call them red flags.

The earlier you identify developing issues with the relationship the higher the chances that you can nip it in a bud and return to a mutually beneficial rewarding relationship. Small companies typically offer a high level of transparency and short communication channels. That makes identifying issues much easier task. In large companies the issues can develop without knowledge of many stakeholders, that’s why watching the relationship dynamics is especially important for those.

Below are a few red flags to watch out for. While these flags in general work from both points of view (the vendor’s and the customer’s), some apply more to one side, some to the other.

o Team Dynamics. The first and the most important indicator of the relationship is the team morale. That is one of the best barometers you can use to forecast the partnership weather so to say. Use a simple rule of thumb – when the team morale is going down expect some rains in your partnership land or maybe worse. It takes a bit of experience to asses the team’s morale though. I suggest you take a simple observational approach – if people communicate a lot, have fun working together, connect at a personal level, and show impressive teamwork that means that spells great morale. You see a lot of finger pointing, team members being distant from each other, and not enjoying the work that is low as far as morale scale. One thing to keep in mind is relative state of morale from team to team / environment to environment. What you consider a high morale in team A could be a very low for a team B. So the key is to look for the changes in the team dynamics. If you see regular fingerprinting and CYA attitude turning to fights and backstabbing that means your barometer is falling…

  • Communication Dynamics. Change in partnership relationships is usually preceded with changes in communications. If your contact suddenly stops returning your calls, if style of the email becomes much more official, if you notice increase frequency in communication gaps, etc. chances are you are facing a brewing partnership problem. It is common to see deteriorating communications, especially if communications are not explicitly managed – people attend fewer meetings, take longer to reply, miss replies, etc. – even when things are going fine. That masks the red flag. There are a couple ways to deal with it – manage communications on an ongoing basis (that’s the best) or revive / bring them back to expected level on a recurring basis. In any case it is exceptionally important to take a stock of the situation to understand whether there are any reasons for more profound concerns.
  • Increase in turn over. That is a very telling indicator. Employees on your partner’s side often have a better knowledge of the relationships and the internal state of affairs even if they are not in the “executive loop”. When things get rough people try to find alternative places in the organization or outside of it. Basically the proverbial rats leaving the sinking ship. People won’t advertise the reasons for leaving and often conceal those behind regular life events “moving to a different city”, “taking care of sick family member”, or they “find an opportunity they could not resist”. No matter what the reasons are if the rate of turn over is going up it’s a serious red flag and time for in-depth analysis of the partner, relationship, and situation.
  • Quality and Productivity. Serious internal issues on the partner side or with the relationship will inevitably find their way to employees and will affect their morale. Market or contract clause can restrict the employees movement, the remote nature of the contract may hide deteriorating team morale and group dynamics. There are couple outlets that will not make you wait long before red flags appear – quality and productivity. When employees’ morale falls and their motivation declines the quality of their deliverables deteriorates, and often their productivity tumbles as well. With some of the contributors quality and productivity fall slightly with some the decline would be substantial. Typically, the decline in quality and productivity averaged across the team is notable. You can see it in simple metrics like escape ratio.
  • Financial Dynamics. The financial dynamics of the partnership typically settle after 3-4 billing cycles. The invoices comes on time / a week ahead / two weeks later; the are perfect / have mistakes; they paid exactly on time / after two past due notices are sent / etc. If that pace suddenly changes you need to check whether that is just a change in AP/AR department, new policies or indication of oncoming relationship disaster, unfortunately often that is the case.

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June 12, 2009 Posted by Nick Krym | Managing Offshore Engagements | | No Comments Yet

Offshore Technical Due Diligence

A couple years ago I went through a technical due diligence (TDD) of several relatively small offshore vendors. The vendors were providing product development services for one of my clients, the vendors also supported operations of the SaaS for all of the products. The client had fully outsourced s/w product development and support to those vendors and retained practically no technology resources internally with exception of MIS / SaaS IT support.

The goal of the TDD process was to asses whether the vendors are efficient and can continue performing fairly complex projects involving working with sensitive information. There are a couple important distinctions here:

  • The vendors were in large degree focused on the product development for my client and the rest of their business was relatively small.
  • The vendors have been performing services for a number of years with very light oversight from the client’s side.
  • The quality of work to date has been on a low side yet deemed sufficient for the money.

As you can imagine results of the TDD was vitally important for the vendors as well as for the client. I will cover some findings and specific areas that I would recommend to focus on in other post(s). At this point I would like to concentrate on general framework / outline of the TDD process I employed on this specific engagement.

TDD included three distinct components – Technical Capability Analysis, Resources Assessment, and lightweight Information Security audit. The budget for TDD process in terms of $$ and time allocation was exceptionally small, so I had to stay just a few notches below high-level TDD, I would be hard pressed to call it a midlevel TDD.

The questionnaire I developed for the process is presented below (I took out the parts which are completely proprietary or overly specific for to this engagement). The questionnaire was used as the outline of the TDD process. The vendors had to answer the questions prior to meeting me. That allowed us to concentrate only on the areas where I found mismatch, drill in on specific areas of concern, or do the answer verification. Some of the questions were fairly generic and I was prepared to see just brief pointers in the answer and discuss underlying details at the meeting.

For staff assessment of course the most important element was interviews.

InfoSec audit was exceptionally light with interviews and on-site survey being the major components.

To see the questionnaire just follow this link – Offshore TDD. I think whether you are about to run technical due diligence on your offshore vendor(s) or are about to be audited you will find it helpful.

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May 22, 2009 Posted by Nick Krym | Making Offshore Decision, Managing Offshore Engagements | | No Comments Yet

Laws of Nature

I just added a new post to my new blog Common Sense ManagementLaws of Nature and the Need for Management. It touches upon one of my favorite metaphors – application of the Second Law of Thermodynamics to management and offshore outsourcing (see also Fundamental Laws of Outsourcing). The message common to these posts is quite simple – you must stay on a top of your projects, resources and engagements otherwise they would quickly deteriorate.

Having said that I have to admit I should pay more attention to what I preach and follow my own recommendations. Just a few days ago I was going through a small project that seemed to be falling behind. The issues became clear in a few minutes after I walked in the meeting discussing the project status.

The objectives for the project I stated about two months ago were lost and the void was filled in by something substantially more complex (And that illustrates another law – “nature abhors a vacuum”). My offshore team was happy to work on more challenging projects, estimates appeared too high, that required in-depth analysis, more people were getting involved, more issues discovered, that generated substantial amount of R&D that increased the complexity by an order of magnitude… Involved in the meeting there were six people from onsite and almost as many from offshore.

For me, at this point an unattached side observer, it was obvious that the efforts being extended to address the project exceeded the value of it by a great margin. It was not at all clear to people so passionately involved in resolving the problem.

About an hour later it was all over. The vicious circle was broken as the proverbial Gordian Knot. The projects objectives were not only restated but addressed. It required 15 minutes from an engineer who had not been even aware of the discussion. Yet the sunk cost of the project was unrecoverable, exceptionally high and not justifiable by any means. Is there anyone to blame for it except the manager (me) who abdicated the project to those who did not have enough technical depth to cut through the distractions of secondary objectives?

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May 19, 2009 Posted by Nick Krym | Managing Offshore Engagements | | 2 Comments

Launching Common Sense Management

I spent a bit of time cleaning up the Site Map and while doing that I noticed that some of the posts have only loose relevance to outsourcing. I put them in a new category – Common Sense Management (CSM). CSM is not a widely used or a popular term. I started using it awhile ago to describe management and leadership style I apply in my day job – running technology teams building software products and services.

CSM is built on top of traditional techniques as well as new methodologies that at some point were considered controversial and now are widely accepted. “Common Sense” in CSM term doesn’t mean “agreed by many” or “widespread knowledge”. CSM stands for application of simple straight-forward solutions to problems that managers face on a daily basis. The best illustration to the term of Common Sense I have ever heard of was a story about “space pen”. Supposedly many years ago NASA spent millions of dollars developing a pen that would write well in the space. Weightless ink presented a serious technical challenge which was successfully addressed by “space pen”… Russian cosmonauts used a Common Sense solution to the problem – pencils…

CSM is a huge topic – it covers multiple aspects of leading and managing people, teams, projects, engagements, and so on. So I decided to start a new blog Common Sense Management – Tips, Tricks and Traps of Technology Leadership. CSM applies to leading all kind of teams and engagements, not only technology, yet with my experience and knowledge limited to that domain I’ll do better staying focused on the technology field.

My first post in the new blog was to some degree a repetition – I wrote about 10 Golden Rules of Bargaining, the post is a bit different from Offshore Negotiations and Rules of Haggling – it is a using Presentation 2.0 style and if you are interested in the topic is probably worth checking out.

I am not sure how frequently I will update my new blog and how it will affect my postings in this blog. Since I only write while commuting the total volume is limited by my abilities and length of BART ride. Well, as they say in France – Vivra verra…

May 14, 2009 Posted by Nick Krym | News, Articles, Thoughts and Comments | | No Comments Yet

Five Steps to Keeping your Vendor

I started my earlier post Five Steps to Keeping your Business with comparison of an offshoring engagement to a bad marriage: courting, expensive wedding, honeymoon, initial struggles, mundane irritation, aggravated frustration, and bitter divorce. The post touched upon the most important steps vendors should take to keep their business. Now let me cover the buyer’s side. And first let’s discuss a couple reasons for keeping your vendors. Of course if a vendor fails your expectations by a large margin there are not too many reasons for keeping that vendor, if any. If the vendor is perfect the thought of changing them is rather unlikely. (Please do let me know what your vendor is in this case, so far I fail to find one!) The question is relevant to vendors that in general deliver on expectations and sometimes exceed them and yet are in many ways imperfect, sometimes even worse than that. To some degree these reasons for keeping the vendor summarize to “Don’t fix if it’s not broken” –

  • You have invested in building the relationship by going through the process of selecting the vendor and the pains of establishing the relationship. You might be in early stages of realizing ROI, so why stop?
  • There are probably some problems with the vendor; there will be problems with the new one. Switch for the sake of a switch do not buy you a way out of problems, just changes the pain location.
  • If the issues you experiencing with the vendor are lower than your threshold for them you can probably ignore them. At some point the pain become ambient and by all means you can go on as if it did not exist.

So after you regular What-If analysis and weighing in Pros and Cons the vendor seems worth keeping. What are the steps for keeping the vendor? Oh, I see another question coming. What do you mean by keeping? Where is the vendor going? There is a contract preventing them from leaving, plus why would they ever leave if I pay them regularly and more or less on time?

Well, there are reasons they might leave, but it’s not the point here. The question is what you should do, what steps you need to take to prevent the relationship from deteriorating to a degree you would have to break the engagement.

1) The first most important “step” you can take is to help your vendor with their “five steps”, in that light you have five “sub-steps” to start with, all of them boiling down to clear and open communications:

  • The first step in Five Steps to Keeping your Business was focused on communications and in particular establishing and sticking to communication plan. That is one of the areas that require equal dedication of both parties. Work together with you vendor to define a meaningful communication plan and stick to it. As the landscape of the engagement changes you might need to revise your plan. To work the plan should be applicable to the current situation, efficient and agreed by both parties.
  • While you can not really help your vendor to be more flexible or more prepared for change, you can keep them aware of changes in your needs, structure, requirements, etc.
  • Helping your vendor with account management can be addressed in many ways, with the most important being allowing him / her to be the best AM they could be, manly through direct and open communications. Some organizations go as far as picking up the expense of AM, I don’t like that approach. I think paying for AM should be a part of vendor’s skin in the game.
  • Consistently providing your vendor with a clear picture of your expectations and assessment of quality is exceptionally important. Do not ignore those surveys and questionnaires – they may prove to be more value than you think of them. Be honest in rating and prepared to substantiate your answers. If your vendor doesn’t bother you with quality survey – volunteer those at least on quarterly basis.
  • When appropriate make you personal wins known to the vendor, position them appropriately as optional / secondary while still important. That should not be a tricky process unless your personal goals are in conflict with organizational; and in that case you may have much bigger problem to deal with… Anyway, isn’t it what the golf is for?

2) Get to know your vendor. Understanding your vendor’s internal driving forces and organizational dynamics can help a lot in forming the strategy and being successful in keeping the vendor in a long term. Learning your vendors’ organization both on macro level (at the organization level) and micro (team / individual) level is better done on their territory. It is also important to have the knowledge distributed through your organization, and one of the best way to do that is to acquire the knowledge through multiple channels, e.g. have multiple people from your team travel and work at the vendor site.

3) Help your vendor to become a stronger partner. Honest and timely feedback is just one of the ingredients. Technology exchange, methodology training, mentorship, etc. You organization can have enormous potential in helping your partners in building their expertise. Think about investing in your vendor the way you invest in your employees. There is of course important boundary here, you do not want to become overly dependent on your vendor or invest in them too much.

4) At some point, when you have established sufficient level of trust and experience with the vendor you can become a reference account. Helping your vendor on sales side plays in your favor in several dimensions – making your vendor stronger, making them more dependant on you as well. Don’t take reference account too easy and by no means let your vendor take it for granted or you can put your company’s and own reputation at risk.

5) And finally a step that might sound controversial nevertheless it is exceptionally important – stay with Disposable Outsourcing Model. There many reasons DOM helps you to keep the current vendor by removing the anxiety and reducing tension. Operating within DOM helps the vendor deliver to your requirements and deal with typical issues such as staff turnover. There is a lot to be said about DOM support in this case, but taking 180 degree turn I must say that if you fail in every aspect mentioned above and only did well on DOM implementation you are still golden since it doesn’t necessary that painful for you to fail in keeping the vendor, and in some perspective with ultimate DOM you can always keep the “vendor” while underlying provider changes…

While there are more steps / actions you can include in this list I think the main one are covered, as always I’d really appreciate your ideas though.

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May 11, 2009 Posted by Nick Krym | Managing Offshore Engagements | | No Comments Yet

Data Entry Gig: Execution Control

In my earlier post Notes from a Data Entry Gig I covered a few areas related to a small data entry project. There were several areas that were left untouched, one of them – execution control, is worth covering by itself.

There are many things you can do to get execution under control on medium to large scope engagements. Project/program management, account reviews, etc. That’s not the methodology to be used on a small gig such as limited scope web research, data entry, SEO, etc.

Considering that discipline and control issues associated with freelancing have to do with a lot of its Cons I was rather skeptical farming out data entry to a few gals in several small cities in Philippines. One would say “it’s a small data entry, what can go wrong”, yet you and I know the possibilities to screw it up are endless. “And then I saw the tool, Now I am a believer.” [almost from Neil Diamond]

oDesk did a fabulous job giving me – the buyer – tools to oversee and control the execution. The tools in particular applicable for such tasks. Today I can go in my “team” room and see my team working, almost as if they were in the office next to mine.

team-room

Maybe even better. The tool gives me detailed time tracking, type / click rates and takes periodic screenshots so I can see what my money are spent against.

activities

No FB browsing or chatting goes unnoticed and frankly for data entry and other similar projects that is a very big deal. Basically I can look over the shoulder of any person on my team and take almost immediate action all the way to termination. Actually not something I can do with local employees / contractors.

There other tools / features that oDesk offers, some probably worth discussion. At this point the ability to crack the whip across 10,000 miles is my favorite.

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May 6, 2009 Posted by Nick Krym | Managing Offshore Engagements | | 2 Comments

Five Steps to Keeping your Business

Offshore teams delivered a significant portion of the products and services for the companies I worked for. My experience in utilizing offshore whether it is measured in years, number of projects or dollars sent offshore is rather substantial. You would think that by now I should have settled on a couple partners who I use on the majority of my engagements the way most VPEs settle on DB platform, app server, language, etc. Actually that is not the case due to many reasons, the main being different needs call for different partners. There is however another reason worth serious discussion – many vendors lose their clients mainly by not doing good enough of a job of keeping them. Whether you look from the vendor’s or buyer’s side that’s a shame…

escher_ascendingIt’s a common knowledge that in the service industries the cost of a dollar earned from a new customer is substantially higher than from an existing relationship. Yet for some reason that rule is ignored with unexplainable consistency. In particular I see it common with some of my offshore vendors. All too often a relationship with an offshore vendor goes through typical stages of a bad marriage: courting, expensive wedding, honeymoon, initial struggles, mundane irritation, aggravated frustration, and bitter divorce.

It takes two to tango, and being unbiased marriage counselor I should offer my connubial advice to both sides – buyers and sellers. I will, with this post focused on the vendor’s side:

  • Communication is critical element of any engagement and in particular distributed. Even two people who know each other exceptionally well and live under one roof are known to have communication problems, it’s no surprise offshore engagement fall apart due to communication problems. Communication problems have a cumulative nature, meaning that small issues accumulate and result in large scale problems. There is much to be said (and I will do that) about improving communications in offshoring engagements, for now just one critical aspect: You should establish and follow communication process. You should treat communication process as you would treat a manufacturing process. In particular consider no missed steps or other changes to the process unless you expect substantial improvement in efficiency AND the changes are agreed upon by all stakeholders.
  • Even the largest and the most conservative organizations are always in motion and all aspects of the engagement constantly change. Subtle changes aggregate and result in substantial shifts and turns. That affects all dimensions of the relationship – technology, staffing, roles, politics, etc. “It is not strongest that survive, nor the most intelligent, but the most responsive to change.” [Charles Darwin] If you want to keep the customer you need to learn to dance with your client following their changes and changing / reinventing yourself as the customer and the relationships change over time. Build your organization, team and the engagement structure in a way it can respond to change in efficient and timely manner.
  • In offshoring engagement too many things can go wrong; as a matter of fact something always goes wrong. It could be a minor issue, a widening communication gap, or individual associate behavior. It could also be a change in the customer’s organization structure, budget reshuffle, or a competitor getting a shoe in the door. There is no day that passes by without some event relevant to the business. In that light keeping a hand on a pulse of the relationship is vital for the engagement. That translates to well known fact that dedicated account management is a must for offshoring engagements. And yet, for some reasons, many offshore vendors think that the account management is “nice to have” activity, that it could be done on ad hoc basis, or that it could be combined with other roles, sometimes putting the person in a conflict of interest. This is a topic worth serious discussion, for now let me just say that insufficient investment in account management is likely to cost substantially more than the investment itself.
  • Any service provider has to deal with conflicting objectives that come from the very essence of any business – drive to reduce the cost and increase the revenue. To some degree it could be position as two forces that push quality in opposite directions. Maintaining the balance between this forces is exceptionally complex task and ability to do it right is the single differentiating factor that raises the winners above crowd of mediocre providers. This topic, even if limited to just my knowledge, would require very extensive and multidimensional coverage. There is an extremely important point though – measuring quality. You may want to increase or drop the quality depending on resources, clients, etc. But to do that you need a scale, a marker that points you to where the quality is. You can not control something unless you measure it. Trying to maintain quality balance without it is like trying to play pooling rope in a pitch dark room.
  • Your customer (organization) is represented by a few individuals that play different roles in the organization and in particular in the relationship with your company / engagement. These roles could include sponsors, champions, business buyers, gate keepers, etc. These people are critical for you success and absolutely essential to keeping the client. Each of them has their organizational goals and personal goals. For example specific project success could be an organizational goal, getting promoted as the result of the project success is personal objective. Your goal as the vendor is to recognize and cater to both of these objectives. As a matter of fact a flawless execution on organizational objectives but failure to meet personal ones can result in a loss of business.

Here you go. Just take these five steps and you will never lose your business… Not… Alas, these are required steps, not sufficient. As a matter of fact steps towards keeping the business have been illustrated by Escher the best (the picture above).

Hey, nobody said the life’s fair.

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April 30, 2009 Posted by Nick Krym | Managing Offshore Engagements | | 4 Comments

Notes from a Data Entry Gig

Large pool of cheap resources sometimes is enough of a motivation to outsource tasks. Sometime even those that you might not have done in the first place ;) It also is very tempting to engage manual labor rather than create, debug and use tools. Those reasons along with some business drivers were behind a data entry project I started a few weeks ago. While small and fairly simple the project offered a few interesting lessons to learn and a couple of interesting points to share.

  1. There are many places where you can find freelancers. Most of those places offer offshore labor. Even local resources such as craigslist will generate more response from offshore than from locals, even if you specify “locals only”. In my case I was specifically looking for offshore resources and the rock bottom rates. I knew that every site has its own community of freelancers, what was somewhat surprising is how substantial the difference in response would be. Response to my ad from 5 sites I tried in the first 3 days was 0, 2, 3, 6, and 78. The last figure was the response from oDesk community. It’s no surprise that the best candidates also came from oDesk. As a matter of fact I ended up to picking all providers from oDesk (I was looking for 5 people).
  2. The rates diversity was quite surprising as well. My project which was a basic internet research and data entry attracted freelancers from all over the world with majority of applicants from India, Pakistan and Philippines. There were a couple bids from USA (I frankly doubt that the work was planned to be performed by USA resources though). The lowest bid was $0.78 an hour (Bangladesh), the highest was $26 an hour (India).
  3. The quality of responses varied greatly from thoughtful and professional to “Need a job!”, the last one incidentally was one of the highest bids as well.
  4. Fit between the job and skill set was decent with a few exceptions even though I had somewhat of a difficult time categorizing my project – fitting it into one of the categories / subcategories provided by the sites.
  5. Each of the sites has its own idiosyncrasies and proprietary conventions; that makes search for freelancers across several sites rather cumbersome. In this case I did not have to work across the sites – the difference in response clearly made oDesk a better place to seek for my resources. That is not always the case though. In particular many type of projects such as web design, graphical arts, etc. would find equally strong support on many sites.
  6. For this project pruning candidates was not complex – I cut off everyone with rate above $5 an hour and those who did not appeared to put any efforts into their bid. That still gave me about 25 candidates, at that point ratings and hours worked helped me quickly pick top ten.
  7. I did not put a lot of efforts in the “Interviewing”; a quick email exchange quickly showed whether the person appeared professional and responsive enough. A few of candidates requested Skype conversations, that was a bit more time consuming and I am not sure whether for this kind of project the time is justified.
  8. I picked 7 suppliers (my target was 5). Can you guess why? Of course the quality of suppliers, especially when you scrape the bottom of the rate barrel is a hit or miss. One of them “did not show up for work” after the bid was accepted, one turned out so dense that I had to stop working with her after two days into the project.
  9. I now have only three suppliers left. All three are from Philippines and all are doing a decent job. The rates are 1.11, 2.78 and 3.33 an hour. The communications are sufficient. Productivity as expected or even better. I think so far I can call this project a success.

If you are facing a data entry, web scraping, email response, etc. project here are a couple tips I suggest for you to consider:

  1. Using freelancing sites saves time of sourcing candidates, simplifies management, and helps with payment aspects.
  2. Today the rate target could be $3 an hour plus / minus a buck.
  3. Have a very simple, concise and unambiguous project description. A step by step operating procedure should be developed. (remember the 3rd fundamental rule of outsourcing?)
  4. Do not invest too much effort in selection of the candidates; it’s easier and faster to start another project and get a bunch of new candidates than try to pick just the right ones. Using the project above as example – the candidates I thought were the best are no longer on my team, one of them was the no-show.
  5. Use the site communication methodology rather than your own email. That reduces the clutter in your own inbox and helps with categorization of email and follow up.

I guess that’s as much as this project deserves. I am kicking off  a SEO/SEM project shortly. It will be a bit different will see how it pans out and whether there is much to learn from it.

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April 23, 2009 Posted by Nick Krym | Managing Offshore Engagements | , | 1 Comment

Basics of Non-verbal Communications

I started talking about body language and non-verbal communications (commonly referred as NVL) a while ago kicking off the discussion with a picture of consummate liar. NVL is a general topic that applies across industries and domains, the reason I bring it up here is that NVL is exceptionally important during face to face interactions with your partners. The cross cultural aspect of offshore relationships introduces whole another layer of complexity to NVL, often complicating already perplexing aspects of communications. To understand it you need to have a solid grasp on basics of NVL. Crawl before you run so to say. Of course understanding basics of NVL will help you in many other aspects of communications both professional and personal.

Of course this post is only a few brash strokes on a canvas – if you find NVL topic of interest you may want to look into a few books which I found helpful. Anyway…

Body language or non-verbal language refers to conveying messages without words. We are accustomed to use common gestures which are the “words” of NVL for example nodding your head in agreement or shaking it in disagreement, facial expressions – smile, frown, disgust, etc. Many or NVL “words” are much more subtle though. They do communicate message to outside world sometimes much louder than plain words would.

In a personal spoken message according to Albert Mehrabian (Psychology Today, 1968) the total message is communicated via:

  • 7% is conveyed by the words
  • 38% by the vocal tones, and
  • 55% by facial and body expression

How about that? More than half of the message comes across via body language! Talk about the Cons of outsourcing! When you work with someone and do not see him or her the chances are you will miss half of what they are saying or it will take twice as long.

More so the body language is less controlled by our conscious mind and often radiates the true message. Just look around and you will see plenty examples of it. I started writing this post while on my way to the office in BART, as on purpose to help me with an example a couple walked in the car and sit across. The couple was having one of those discussions: her eyes were red and full of tears; they sit on the bench at least a foot apart, her fist were clinched and body pasture uptight / uneasy. He was much more relaxed and appeared in control, he was the one doing all the talking in very persuasive somewhat mechanical manner, the topic was apparently very emotional and she was hanging on his every word, looking deep into his eyes. I could not hear a word yet it was somewhat clear that he did something that had hurt her and now was explaining / asking for forgiveness. By the Fruitvale station there was no more distance between them, his arm was on her shoulders, at the West Oakland they kissed lightly, by the Embarcadero station the kiss was real, the fight was over, and the guy was forgiven. She relaxed as if the seat suddenly became 100 times cozier and looked so much happier, so did he… What she did not see during the conversation, as she was maintaining that rare unbreakable eye contact, was his body language and all classical signs of deception. For me as a side observer sings were obvious as if I was watching an NVL training tape – here is the hand to mouth move, now he’s rubbing his neck, and here goes that proverbial blinking… As I was walking out of the car I saw her happy smile. Isn’t love grant?

There are a few very important elements to reading NVL:

  • North American gestures do not necessarily represent gestures correctly in other ethnic cultures. As a matter of fact you need to make sure to read up on foreign NVL before getting involved in face to face communication with your offshore partners, innocent or positive gestures could be offensive in other cultures, e.g. infamous American feet on the table the gesture that is extremely impolite in many cultures and exceptionally offensive in the Middle East.
  • Many people can easily control what their NVL broadcasts to the outside world in an initial stage of conversation or its “static” stages. For example anyone can start a conversation with a smile, specific body position, etc. As the conversation moves along and becomes more engaging / more emotional the mind loses its control over NVL. If you are trying to read NVL pay specific attention to changes in NVL. Changes in NVL are significantly more important than “stance” or specific elements of NVL displayed for a period of time.
  • You are probably not the only one who is NVL aware. More so some people put substantial effort in mastering in NVL outbound communications and use it as powerful deception or influence techniques. For example a powerful technique taught in many sales classes is mirroring – mimicking conversation partner’s body language. Mirroring is known to increase chances of positive outcome of the conversation – closing the deal; it comes from one of core principals of influence theory; that’s a whole another topic for discussion.

Well, that probably covers the main elements of the foundation.

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April 17, 2009 Posted by Nick Krym | Contract Negotiations, Managing Offshore Engagements | , | No Comments Yet

More Thoughts on ESL

A while ago when still a student I stumbled upon a great supplemental income opportunity: a friend of mine, an editor in a science journal, was looking for part time interpreters. The task was quite simple: writing summaries of technical articles. To me my French even though practically non-existent seemed strong enough to do that maybe, just maybe, with some support of a dictionary. I stopped at my friend’s office and he handed off to me a half a dozen articles on various medical topics. I was quite flabbergasted and asked – why medical? I am a technical guy. Math, engineering, maybe software, but why medical? My friend just smiled – if I give you articles in your specialty I will only get back what you know of the subject, chances are, that everything new and or controversial will be missed, and that’s assuming that you know French well… After a few nights of checking every word in a dictionary and still not being able to put the puzzles together I decided to switch to different means of making money.

I have seen the same phenomena with many technology professionals for whom English is somewhat of a struggle. They often step back and rely on their technical skills in understanding their client needs, interpreting the information inflow, often to the detriment of the project. That in particular common for advanced ESLers. When working face to face with native speakers and not communication related misunderstandings are easier to address, non-verbal language and timely feedback are of great help in this case. When you introduce the offshore factor, the time and cultural differences on the top of language handicap communications mistakes accumulate and widen the gap in understanding. Technology professionals have a tendency to bridge the gap with things they are familiar with and make decisions on behalf of the client.

Dealing with this issue requires efforts on both sides and unfortunately there is no panacea. Trying to get every assumption documented and signed off is a recipe for a productivity disaster, leaving things up for interpretation by developers is asking for even more troubles. Many of the tools I find helpful and efficient in this case come from agile development practice, in particular short release cycles and frequent demos.

Of course learning English remains to be one of the most important tasks on the provider side. But with over 600,000 words it’s easier said than done. Classes and books will only get you a fraction of the way there. What can one do to continuously advance in that utmost important skill while keeping they day job? We take our chances and use different methodologies. For me motivational tapes from Brian Tracy, Zig Ziglar, and Anthony Robbins were the main tool not only in building the vocabulary but changing my Russian gloom and doom attitude. Some people listen to NPR some watch a lot of movies. Having mentioned that lat me share with you a story I hear from Kirill (offshore development manager for a large s/w company on weekdays and my blog reader in his spare time). He told me about a Russian developer manager who took watching movies to heart; he also combined business and pleasure and watched primarily action movies. Being very gifted in terms of language he built broad vocabulary of words and idiomatic expressions, a lot of idiomatic expressions unfortunately mostly borrowed from Dirty Harry wannabes. That did not do him particular well :( If you are working on your language skills here is Kirill’s advice –

One of my guys in St. Petersburg has outstanding English and I asked him how he had mastered it. He said that he listened regularly to free podcasts at www.eslpod.com. I checked the site out and downloaded tons (close to 5G) of historical podcasts. Topics are pretty basic, but the language they use and pronunciation is very good. I wish I had something like this when I just came over here :)

Well, as the say it’s better late than never – I’m signing up …

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April 14, 2009 Posted by Nick Krym | Managing Offshore Engagements | , | No Comments Yet

10 Offshore Deal Showstoppers

I love English and it is slowly becoming my true second language. While English is still very much a work in progress for me I think I am doing better every day. Nowadays I can even challenge some native speakers with language questions that would get them quite puzzled. For example, is a “showstopper” a good thing? Almost anyone working in IT industry will tell you – No, that’s a very bad thing. Well, it is not exactly correct – take a look in a dictionary… Anyway, I am planning on covering a few showstoppers (in IT sense of the word) that I consider a deal breakers when it comes to hiring an offshore outsourcing vendor.

1. Acting like an idiot –fighting with me, bragging, being condescending, doubting my intelligence, etc. I have seen all too often vendors torpedo themselves by acting rather shallow. Here are just a couple of real life examples:

  • “Nick, we hear it all the time… What a dumb question!”
  • “Why use Skype? We’ll set you up with the software we developed in house – it is 100 times better.”
  • “Nick, you just don’t understand…”
  • “We have the best people in the entire city of Moscow and as a matter of fact in Russia altogether.”
  • “Nick, this is so simple, anyone would understand it. Let me take you through it step by step…”

2. Lying, in particular when the lies are obvious. I typically tell to my prospect offshore vendors upfront that’s I am not a neophyte in outsourcing, yet some of them almost immediately after introduction launch into telling me how their clients saved over 300% in IT costs, about virtually zero turnover ratio, building 100+ member teams in 2 weeks, etc. These claims go beyond lying and fall in category “treating me like an idiot”. There are many areas where I see offshoring vendors commonly bend the truth a bit too far, and that why I always interview prospect employees – all kind of things came to the surface.

3. Playing games. I am not a strong negotiator and do not sell or buy for living. That doesn’t mean that I fall for every trick in the book. More so, if I recognize that a vendor is playing games with me chances are I won’t continue the discussion even without asking them to play a flute first. That is particular common and less offensive when it comes to negotiations, yet still annoying and the chances are will throw a bucket of cold water on my desire to work with the vendor.

4. Bashing competitors. Very common practice that is likely to give a vendor a single benefit – never talking with me again. Here are just a few examples from my recent past:

  • a. From a talk with a Hungarian outsourcing firm: “Nick, are you really comfortable working with Russians? You know that all Russian outsourcing companies are owned by mob, don’t you?” Obviously these guys did not know that I spent first 30 years of my life in Russia…
  • A discussion with a founder of an offshore company in Odessa, Ukraine: “Nick, are you serious about considering China? That’s just silly. I’ve worked with Chinese for years and can tell you they all dumb and lazy…” In response I told the guy that my wife was Chinese; while it is not true, that was so worth it – watching the tap dance that followed.
  • From a discussion with VP of Sales for an outsourcing firm in China talking about another outsourcing firm in China: “I know them very well, and I have to tell you working with them will give you nothing but headaches – huge turnover, very low quality of resources, practically nobody with fluent English…”

5. Showing signs of dysfunctional company. Breakdown in communications, mixed messages, process breakdowns, “right hand doesn’t know what the left hand does”, not responding to my inquiries – these are just some of the common signs of a dysfunctional company. Those signs surfacing during presales / sales process or contract negotiation stage are sure deal killer in my book.

6. Displaying signs of bodyshop. Bodyshops or/and software sweatshops are not the organizations I would partner with for many reasons: low quality of deliverables, incompetent staff, high rate of conflicts – just to name a few. The trick is to recognize it early. Fortunately, signs of bodyshop are often right on the surface. The most common is condescending attitude of sales team towards resources to be involved in delivery. Another one, a bit less obvious, is a very quick turn around on sales materials with no visible impact on sales team (bunch of worker bees in back office slogged through the night to get the drones ready for presentation).

7. Unreasonable pricing. Typically excessive pricing comes decorated with statements such as “we are not the cheapest but we are the best” or “these are just list prices and we can negotiate from here”. That approach turns a large portion of contract negotiations in a slapstick comedy which I do not enjoy. Unreasonably low pricing has a turn offs of a different nature, ranging from “these guys are desperate” to “what’s the catch”.

8. Going over my head or behind my back. Not sure whether that one needs an explanation. Doing something like that is known to be a “corporate culture crime” in any industry / environment. And yet I see it surprisingly often. The funny part is that the email sent to my boss is likely to end up in my inbox with “FYI” or even “Nick, why are thy contacting me?”

9. Applying overly aggressive sales techniques. Having been in the industry for a while I have seen a lot of them ranging from twisting arms and applying pressure or guilt to outright pathetic begging. Once a CEO of midsized Indian outsourcing company literally cried in my office begging my to give his company just one chance, he showed me the pictures of his kids and wept talking about so many of his employees to go hungry – you might think it was a scene from Bollywood tearjerker.

10. Picking a wrong tone for the discussions. That’s a tricky one as everyone has their personal preferences and pet peeves. I think you can’t go wrong by just being consummate professional in all aspects of your communication. For example, I believe that you are better off being cold rather than getting too casual too quick – “Nick, buddy, take a foot of the breaks! When are you goona sign the doc I sent you?” But maybe that’s just me…

Many of the items are not necessary related to integral components or cultural fabric of specific vendor organization. Many of these items are mainly related to sales person who represent the company and you might ask why I would stop working with a vendor just because their sales person is not the sharpest cheese on a platter? Well, there are at least few reasons –

  • Most of the time what you see during sales process is enhanced version of what will appear during the delivery stage.
  • A company that hires and uses sales staff that could be defined by one of terms is probably not worth working with.
  • There are plenty of alternatives to spending time with people who annoy you.

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April 8, 2009 Posted by Nick Krym | Contract Negotiations | | No Comments Yet

Is Blog Format a Misfit for PO?

I was chatting with a good friend of mine who happened to be one of my readers as well. Being a good friend he did not sugar coat his thoughts and opinions, as they say “friends stub you in front”. And, as it typically goes, when we were done fighting we only strengthen our positions and views. So, no adjustment or reviews are coming to the 100+ posts I wrote so far. Also as it goes in frank discussions between friends a few interesting topics came up, a few questions that needed mulling over. One of them was quite intriguing for me: “is blog format a misfit for what I am trying to accomplish in pragmatic outsourcing?”

For all intents and purposes PO is a collection of my thoughts, experiences, ideas, etc. directly or loosely related to IT outsourcing. I write the blog as if I am writing a book on IT outsourcing one random chapter at a time. When I look at the table of content it looks like I’ve got a plenty of material for a decent size book already. That approach has a few serious shortcomings though. The main is chronological nature of blog is counterintuitive for technical writing and even more so for reading. Those who elect to subscribe to my blog most likely find the info disorganized, sometimes repetitive, etc. Those who stumble upon my blog looking for offshore advice find info often incomplete. And so on.

Another blog format related challenge comes from expectations of constant updates. That as I move along closing more and more topic becomes more and more complex. Things, unless you consider current news approach are not terribly dynamic. For example, I wrote about India vs. China from IT outsourcing standpoint; that post is soon to be a year old. Some economy trends changed, political and industry events changed some of the elements and tweaked the balance. Of course things changed. Yet how much, is that worth placing an update to that post, revise views and positions, nope, I am afraid the changes no matter how significant did not affect foundations and views presented in that post, chances are it will be a long while before rewriting or updating the post is warranted.

I am not running out of topics yet, there is a lot to cover, and I am not planning to switch the format or type of content. I would appreciate your thoughts on that question though…

And one more thing worth mentioning: Kirill Abgarian, one of my readers and supporters, suggested that I should put my knowledge in a book about Pragmatic Outsourcing. I got quite excited about that idea; while time-wise and skill-wise I could not possibly do it, but considering an offshore ghost writer support and an ebook format that appeared to be very doable. I shopped around what it would take, swaged some purchase dynamics and came to a sad conclusion that I would need to have at least couple thousands subscribers before I could cover the expense of writing and publishing the book. That’s considerably more than I have at the moment, so no ebook for now… but maybe some time in a future…

April 3, 2009 Posted by Nick Krym | News, Articles, Thoughts and Comments | | No Comments Yet

Basics of Win-win Negotiating

If you heard anything about negotiations you probably heard about win-win negotiations (WWN) as well. As a matter of fact you might have heard the term even if you never dealt with negotiations at all. It’s a very popular buzzword in business, politics, etc. But doesn’t it sound like an oxymoron? Negotiations term in our minds typically translates to two sides with conflicting objectives trying to find a compromise, what can win-win term to do with it?

Well, the first and the most important step in reaching win-win outcomes, is getting away from the cliché above. You need to put yourself in a different state of mind, and that is not that at all complex. If you approach negotiations as “two parties with conflicting objectives trying to find a compromise” that what your negotiation process would be. Negotiations in this case is very much like a sport game or a bitter divorce – there is a fixed amount of assets that could be divided between two parties. In reality most of the businesses negotiations deal with substantially more assets that meets the eye and the assets do not need to be “divided” but distributed / redistributed in some manner, more so in many negotiations new value is created increasing the negotiations asset pool dramatically. Understanding of it allows you to focus on maximizing overall value as well as the value gained by each party, and that leads you to win-win negotiations.

Going forward in this post let’s consider negotiating an initial offshore contract as the main example. Getting to a final contract signature could be a very complex and lengthy process with legal, ops and execs involved, with emotions flying high, many things going wrong, and some seriously bruised egos; that feels in matrimonial terms as a dressed rehearsal for a bitter divorce. Negotiation initial contract could be also a well organized process akin to planning session for long and complex journey.

The first scenario besides being hard on you is also almost a certain recipe for engagement failure. Let’s discuss some of the main techniques and tools that help change typical carpet trading style bargaining into professional win-win process negotiations that are easy on our nerves and establish solid foundation for the engagement success:

Put yourself in WWN state of mind:

  • First thing you need to do is to realize that there is a variable amount of resources to be divided / redistributed and both sides can “win”. Take for example an MSA, I’ve seen some that were just one page long and some over 20 pages long. They serve the same purpose and in large degree touch on the same topics. The breadth and more so depth of them is quite different with longer versions offering many more elements to discuss / negotiate.
  • Starting from early steps of the negotiations your dominant concern should become to maximize joint outcomes. Think about the process of WWN as a process of creating value. In particular search for options of providing additional value for your negotiating partner. For example if you are on a buyer side that might include references, leads, sharing development expertise, helping with building the process maturity, etc.
  • You need to get to a realization that there are many tangible and intangible benefits both parties can offer each other in addition to hard-core contract ingredients. Take for example references or leads a customer the parties can exchange.
  • Understand that the opponent’s interests are not necessarily the way you perceive them, so take the most positive view. Put yourself in your negotiating partner shoes and take the most optimistic outlook at what they may be trying to accomplish. For example, if you are on a buyer side think in terms “if I were the vendor what value I could provide to the buyer? What can I do to exceed their expectations”
  • Focus on interests, not positions, including your own. That is very important point, it is all too often we forget the goals we are trying to accomplish and get our horns locked in fighting on positions, pursuing fleeting often irrelevant objectives. Many times I’ve seen people forgetting the topic of negotiation and only striving to look good, win, prove the point, etc. Well I’ve done it myself…

You can start establishing the foundations of the WWN right after and only after you put yourself in WWN state of mind. One of the most important steps in establishing the foundations is making sure that WWN is indeed a possibility:

  • Always initially ask for more than you expect. That serves to multiple purposes, one of the most important being establishing negotiation space, which in turn helps your opponent to avoid “losing face”.
  • Look for points to negotiate and by all means avoid single-threaded negotiations. When you get to a single-threaded negotiation, or negotiating upon a single point (most common would be “the rate”) the chances of “building additional value” disappear as negotiation turns to dividing a limited amount of resources between two parties. Keep as many points open as possible till you are ready to get to the closure.
  • Get you opponent to act in WWN manner as well. Make sure that your negotiating partner understands that your position is “win-win or no deal”. Get your opponent to take same position as well. That could be not trivial and require substantial effort if your opponent doesn’t have experience in WWN or doesn’t believe in WWN.

The process of WWN is not overly complex; it’s just different from what many people consider “the right thing to do” when it comes to negotiations. In “typical” negotiations one person’s interests oppose the other’s. The dominant concern in this type of bargaining is usually maximizing one’s own interests. Dominant strategies in this mode include manipulation, forcing, and withholding information. In WWN dominant concern is to maximize joint outcomes and dominant strategies include cooperation, sharing information, and mutual problem solving.

After the parties established WWN mindset and environment the process moves towards building a partnership dealing with elements that parties have opposite interest in becomes non-confrontational collaboration rather than face to face combat so common for haggling. When you encounter a topic of that divides / pulls parties apart consider the following techniques:

  • Seek out (brain storm) mutual gain opportunities through out your negotiation process. Every turn in the negotiation offers additional opportunity for discovery and broadening the negotiation landscape. Generate a variety of possibilities before deciding what to do / how to proceed.
  • Seek objective or legitimate standard to base an outcome on, to evaluate the solution. For example Net 30 is the most common (standard) payment term in SMB environment for outsourcing contracts. Working with large organization such as government or pharma you likely have to consider Net 60, when dealing with contractors you may want to consider Net 15 or due upon receipt.
  • Build on commonalities rather than address the differences, consider “we are in this together” as the main metaphor. Sometimes to bring you and your opponent (negotiating partner) on the same side it helps to find a “mutual enemy”. For example when building a initial outsourcing contract instead of fighting around common problems such as “what if you will not deliver on time and my resources are spinning wheels waiting for you…” consider “loss of productivity” as a “mutual enemy”. That set of mind promotes by far more productive discussion and typically results in better contractual framework.

OK, the title of this post is “Basics of Win-win Negotiating”, “basics” not “insights” or “advanced techniques” and I think I am way deep in the weeds now. So, I guess I should stop now… And thank you so much if you still reading. I am afraid I lost most of my readers by now, including myself…

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April 2, 2009 Posted by Nick Krym | Contract Negotiations | | No Comments Yet

10 Annoying Things Freelancers Do to Destroy their Business

I have been working with freelancers through out my career and recently, thanks to services like oDesk, I find myself doing it more often. So you might think that I am happy with what I get, at least in general. Well, one of the reasons I continue to stay engaged is my high tolerance for pain – I am prepared to go through piles of hay to find that needle. And I have to tell you, looking for freelancers is very much like digging for gold – you literally have to go through tons of dirt to find it.

Interestingly enough many freelancers who have skills, knowledge and maybe even talent often torpedo themselves, aggressively sabotage their chances of getting customers right in the begging of the process. They make simple yet lethal mistakes that turn off clients before they got the chance to learn about freelancer’s ingenuity. Of course many mistakes could be made during execution of the project as well as its closure. I am not talking about technical or skill set issues though, my focus is on soft behavioral aspects of your communications with the client. Below are some of those mistakes:

  • Not reading my project description before replying to it. Your three page long template proposal will get in a recycle bin faster than you would think. At least adjust your opening statement, show me that you read the post…
  • Not using proper grammar and spelling. English is my second language and still a work in progress; I still struggle with grammar myself, yet many proposals I see push that envelope way too far. Grammatically poor introduction screams in my face “Communicating with this freelancer will be a real pain!” Spelling mistakes are even worse – how can I entrust my project to someone who doesn’t even make an effort to turn on a spellchecker?
  • Talking with me like I am a teenager. Your slang (especially when combined with ESL marvels) comes across as complete lack of intelligence and class. By the way, spellchecker is not likely to recognize your “gonna”, “wanna”, “gimme”, take a hint. Let me clarify this point – after you established rapport you may find that your client is using colloquial language and slang, following the suite in this case could be OK, still not when you put your words in writing.
  • Being excessively polite. Your culture and language might require twenty minutes of praise and compliments before you get to business but I am an American, cut to the chase guy. More so, being overly polite and using somewhat unusual forms will telegraph a wrong image, your mentioning my “ultimate wisdom” only makes me think of a snake oil salesman.
  • Not being punctual / prepared for your interview. I think of proposal / interview stage as a “honeymoon” in a relationship with a freelancer, it all goes downhill from there. Late for your Skype call? Having troubles finding your headset? Can’t introduce yourself? Chances are that’s the last time you’ll hear from me.
  • Bidding too high or too low. Even though I can understand motivation of people bidding high or low, I typically ignore the bids that stand out in that respect. It’s probably clear why high bid is a losing proposition: unless you got the market cornered the price does matter. Less obvious is a low bid. The main issue here is trust and the fact that we as buyers have been conditioned to expect a “catch” or “bait and switch” with a low bid. Maybe $2 an hour is a perfect wage for combination of what you sell and your standards of living, yet if everyone else bids $15 or higher you should stay in ballpark otherwise the chances are your bid will be ignored.
  • Not following though. Few things annoy me more than a freelancer responding to my post and then dropping off without note / returning my questions. Maybe you realized that I am not the right customer / the project is not in your sweet spot / whatever. It’s perfectly OK to bail out from bidding process, just don’t forget let you customer know. A simple “regrets” note can do a lot for you on a next opportunity that could be exactly what you are looking for.
  • Telling me that you know what I need better than I do. That for some reason is particular common for developers from Eastern Europe and particular from my motherland Russia. If you indeed know (which is highly unlikely) suggest, illustrate, propose – don’t push, don’t fight with me, I get enough fighting when I tell my clients that I know better.
  • Playing games with scope / rates / budget. For many of us on a buyer side many of these games are transparent, most us who’s been in the industry for over 5 years seen at all – “bait and switch”, “low ball”, “door in a face” – you name it. As a matter of fact we make purchases and are being sold on daily basis. We get occasionally burned, sometimes badly. In stock market, real estate, cars, utilities… And when we come to work last thing we want to see is someone trying same techniques…
  • Leaving debris behind. That is my personal pet peeve. Just a few days ago I was looking through code deliverables from a freelancer who just finished a small RoR project for me. Looking through the code I found plenty of loose ends such as hard coded ID addresses, uncommented debugging code, etc. That was the first project this particular freelancer got from me and it is the last one.

I can go on and on, ad infinitum ad nauseam, but I’ve reached my self imposed limit of 10 bullets. I might revisit it later though.

BTW, an initial version of this post posted as a guest blog at oDesk blog got some harsh critique for grammar and other language mistakes I made from Nancci Maloney, probably on of the oDesk freelancers:

Sir, I understand some of your frustrations, but -

If you are going to criticize someone, you need to be sure your own house is in order. You state your second pet peeve is not using correct grammer and spelling.

Look at your 1st bullet – it’s a recycle ‘bin’ – been is a verb. If you had ‘read’ through your post you would know ‘red’ is a color.

2nd bullet – your English is ‘a’ work in progress – sort of changes the meaning of the sentence. If you still ’straggle’ with concepts then you need to look up struggle in the dictionary.

Why would I entrust my paycheck to someone who can’t use spellcheck?

There are other lesser grammatical errors in your post but I think you get the idea. My mama always said people in glass houses shouldn’t throw stones. It’s pretty sound advice.

Not sure if you noticed there are two spelling errors in Nancci’s comment.

So let me apologize in case some of those niximorons are still in this post and suggest that you should “do what I say not what I do” :)

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March 26, 2009 Posted by Nick Krym | Managing Offshore Engagements | | No Comments Yet

Twitter – a New Tool in my Offshoring Toolbox

Eric Pan asked an interesting question on Linkedin – “Other than IM, email and phone call, I am thinking if twitter can improve communication with offshore teams in software development. Do you have any success story to share?”

The immediate reaction of the community was quite negative, e.g. “…the security is horrible and the 140 character limit (as noted in other answers) precludes its effective use… ” or “ … It will be a big distraction. I am not sure how you envision project communication…” I am afraid people behind these answers totally missed the point. I found the question rather thought provoking and after giving a few minutes of attention came to conclusion that twitter could be a rather helpful tool in some type of outsourcing / offshoring projects.

Twitter is quite a new phenomena and in its buzzpower its is successfully wrestling with Facebook and Google, it remains to be seen how rich he’s going to make its founders and whether it will stay for a while or fade away like many fads of the net era.

So far I had a few attempts to become a regular twitter and found neither pleasure nor purpose in it. Some say it could be helpful for my blog promotion, some suggest that it’s mandatory for building your personal brand. Not sure, I will probably give it another try… but that is not the topic here.

On the other hand communication is a backbone of offshoring engagements. One can not overestimate importance of communications for running teams of all kinds, 100 fold so for distributed ones. So if there is a tool that helps in communication processes it at least is worth careful consideration. There are plenty of tools we already have at our disposal – face to face meetings, phone conf calls and one on one discussions, email individual and group, intranet, wiki and sharepoint, chats, do we need another one? Well, is there a gap that needs to be covered? Probably there is none. Is there some way to improve current coverage, I bet!

Going back to twitter origins – it is all about status reporting. What are you doing? In technolingo that translates to What are you working on? Or What is your current status? That makes total sense. Skype chat is for discussions and instant updates. Twitter provides a vehicle of distributing status updates to a group of people in rather non-invasive form without clutter and overhead of email. The follower model is a solid alternative to to:/cc:/bcc: where the sender has to determine distribution list, putting the distribution in the hands of the receiver makes a lot of sense in a group setting.

Are there limitations to twitter – oh boy, where do I start? – but that’s not the point, if instead of nixing the idea for the tool limitations you take a proactive positive look you suddenly find many features that could be indeed very helpful.

I see a good fit to use of twitter in several areas of my offshore SDLC, for example milestone notifications on regression test runs, build reports, etc. There are also multiple possibilities in other areas, take for example production support / uptime notifications…

Not too long ago tools like YIM or Skype were considered bad practices and were banned from corp. IT world, for exactly the same reasons my distinguish LinkedIn colleagues are bashing Twitter today. Will see how this one pans out… let’s reconnect in a year or so?

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March 24, 2009 Posted by Nick Krym | Managing Offshore Engagements | | 5 Comments

Slowing Down, no Intentions to Stop

This month has been exceptionally busy for me and I had almost no time to put against anything but my day job, unsurprisingly so my blogging debt started to grow at a pretty good pace. There were a plenty of articles published in the blogs I follow, many industry news worth discussion knocked on the doors daily, and despite serious slowing down in the rate of posts I saw a notable increase in traffic.

When it comes to blogging I face a few serious challenges, first of course being ESL. As a matter of fact ESL has been a huge mental obstacle to overcome, it took a lot of internal and external pushing before I could step over the fact that I won’t be able write to even my own standards of quality needless to say to the benchmarks established in technical blogosphere by top notch professionals.

Other ones were concerns so typical for a techie:

  • I can talk at rate of 100 words a minute with occasional gusts of 250, but when I put my thoughts on paper the productivity drops 100 fold.
  • Talking towards invisible audience and literally no feedback and total absence of control over that audience really freaks me out.
  • Concerns about spilling the beans in so many aspects of our work and educating vendors and competitors.
  • Copyright / IP concerns. Many of the items I cover related to projects I’ve done as work for hire – how far can I push that envelope without compromising my integrity – which is by far one of the most important aspect of our professional image
  • Position concerns – what if I change my opinion tomorrow? Image concerns, and many many others…

Of course like anyone else I also have to deal with shortage hours in a day, occasional writer’s blocks and gazillion of other challenges any blogger deals with.

When I realized how much time blogging is going to take from my day and how unproductive I was my visceral reaction was to follow my management approach: do what you do the best – delegate the rest. And I decided to hire a ghost writer. In theory it appeared like a great idea – I just tell a ghost writer what I think about a particular topic and s/he will write it up… In theory there is no difference between theory and practice, in practice there is. My fabulous idea did not work out, not for the lack of offers though:

I put a project request on several freelancing sites (see those plus more on my list of places to find freelancers). I got more offers that I could look at in just a few days. The price varied from $2 to $50 an hour. Many of writers who replied to my post did not even red the post, some did not understand it. The remaining minority either asked for rates I could not possibly afford or after a brief discussion with me bailed out. After I went though ~100 bids there were a couple still standing, and they only made me realize that time-wise I won’t see any savings and the only thing I could benefit by using a ghost writer would be grammar, SEO, and other important yet secondary aspects.

So I ended up in square one with a notebook in my laps blogging away while BARTing. The last couple months brought more and more to my plate. Isn’t it strange that poor economy, slower business and a fewer opportunities do not mean less work? So even my office commute doesn’t offer much time for pragmatic outsourcing. But I have no intentions to stop, at least yet. There is still so much to cover…

March 24, 2009 Posted by Nick Krym | News, Articles, Thoughts and Comments | | No Comments Yet

Search for SWAT

There is famous French expression cherche la femme (find the woman) implying that behind a cause of almost any event there is a woman (well, in its most common meaning the phrase has negative and sexist connotation). Cherche La SWAT or “Search for SWAT” is an approach I have been using and recommend others to use when selecting an IT service partner, offshore vendors included.  I honestly believe that behind almost any success in our industry there is a SWAT team…

A couple days ago I had a pleasure of meeting with two guys who’s been running their local technology shop for quite some time now. Both were top notch developers who’ve been in the industry probably at least as long as I, maybe longer. A bowl of outstanding Pho in a greasy spoon Vietnamese restaurant, college campus attire, and potential partnership created special ambiance that is particular conducive for nerd bonding.

After quick introduction and buzz word exchange we realized that we were only a degree apart and for awhile were working for startups that we fiercely competing with each other. We laughed through tears talking about how a company with 2 developers and 12 marketers and no product can put out of business a superb product with 12 talented engineers and 1 marketer behind it and then after sharing similar stories about dot com bust and being screwed by VC and CEOs we finally dove into discussion of technical capabilities of the firm my hosts were representing.

It is amazing how quickly these two guys who are as remote to sales and marketing as naïveté to Capitol Hill were able to give me a sense of comfort in their services and products. I guess many sales guys can take a few tips from these nerds. Well, faking competence takes a lot of competence and thus no need for faking ;)

Probably the main reason for such instant connection was a common mind set and similar language even though spoken with very different accents. What was the most important is that these guys had very similar pitch to what I have been using when promoting my services for very long time. These two guys were representing a SWAT team – Specialists With Advanced Tools.

There are many SWAT team out there, yet they are a tiny minority in the vast pool of IT resources. There are a few things that are common between SWAT teams, in particular they

  • are typically comprised of top notch professionals with substantial experience or/and IQ off the charts;
  • are typically specialized shops with individual contributors not making claims outside of their domain;
  • often are small in size and tightly knit teams, many of their members have history of working together possibly in some other firm(s).

SWAT team pitch is typically around results, quality, and productivity. In development arenas they tend to offer veni, vidi, vici model – pragmatic approach to delivering the product and no concern for recurring tasks, when it comes to providing ongoing services they are typically very pragmatic and process oriented. They do not tend to dazzle you with marketing materials and prefer to quickly cut to the chase. If they want to show off anything than it’s typically their weapons – advanced tools – for example a development framework they developed and refined over the years.

Besides obvious benefits of SWAT teams (efficiency, reliability, focus, etc.) there are a few exceptionally important aspects that set SWAT teams apart from a majority of service providers including most prominent companies. To some degree you can call those aspects “advanced tools” as well:

  • Established network of technology leaders and individual contributors of all ranks.
  • Time and scale proven technologies, solutions, libraries, patterns, and reusable components.
  • Best of breed technology tools as well as process, policies, and methodologies.
  • Established relationships with software and hardware vendors.
  • Established partnerships with consulting organizations and offshore providers.

I hope by now I made it obvious that SWAT teams are the teams to find and work with. The trick is the “find” part since there are not that many of them and plus there are plenty of imposters. To a large degree that is very much like for employees – “looking for people is very much like digging for gold, you literally need to go through tons of dirt, but you are looking for gold, not for dirt.”

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March 23, 2009 Posted by Nick Krym | Offshore Vendor Selection | | No Comments Yet

Using Freelancers: Pros and Cons

I work with freelancers on many tasks / projects and find using freelancing force very meaningful in many aspects. I have been working as a freelancer myself on and off as well, so to some degree I have a double insider view on IT freelancing phenomena.

So when I run into an old and rather popular article 101 Reasons Freelancers Do it Better I was compelled to comment; yet while reading I realized that regular comments just won’t do it. I saw that I could play devil’s advocate pretty much on every point made in the article, e.g. just a few random notes

Reasons to Freelance Nick as Devil’s Advocate
Save on child care: Instead of paying for full-time care, you may be able to cut care back to part-time hours or even work out a schedule with your spouse that allows you to eliminate child care altogether. Oh yes, and all the money you lose by shortening your work day. And of course the quality of your work will skyrocket with kids hopping around and helping you type.
Your level of career-loathing spending is reduced or eliminated: Expensive vacations, trips to the spa and gallons of fruity alcoholic drinks are often indulged in because of a need to release work- related stress. Freelancers are generally happier and more satisfied by their work, so
this type of spending is not as prevalent.
Absolutely. No career thoughts, aspirations, politics, anxiety – total nirvana. You probably should take it even further, drop working altogether. That will be especially helpful in releasing stress that comes from freelancing commons such as waiting to be paid, bidding against 10,000 me toos, being screamed at by a client.
Diversity: Instead of doing the same thing day in and day out, you can pick up a variety of projects to keep you occupied. That’s phenomenal – learn java today do graphical arts tomorrow, learn one customer’s domain and apply it some other. Become a pinnacle of multi talent – Jack of all trades
and respected master of None…

I guess any Smart Alek can do the same and it would be much more meaningful to look at the freelancing as an option from a VPE’s standpoint. Freelancing is a complex phenomena and covering it in detail could keep a few very prolific bloggers busy. Take for example a look at freelanceswitch.com For this post let me take a high road and cover only some of the main Pros and Cons of Freelancing:

Pros of Working with Freelancers

  • No job is too small is a common freelancing motto. So when you need things like light graphic touch up, setting up a yahoo store, basic SEO services, etc. using freelancers is often the best option. You can have the entire project done by the time a sales team from a large agency schedules initial meeting with you.
  • One of great advantages of sourcing through freelancing is access to a huge pool of resources. Nowadays with powerful aggregators / directories of freelancing resources such as odesk.com, guru.com, and elance.com you can probably find almost any specialty or skill you may need. See the list i compiled so far.
  • Nimble, fast and flexible freelancing community caters to ever changing needs of businesses quite well. The difference in turn around time between freelancers and even small service oriented companies is staggering.
  • Low commitment on your part combined with a large resource pool caters toward disposable outsourcing model exceptionally well (read more about disposable outsourcing ).
  • One of the unadvertised benefits that a freelancer could offer comes from cutting corners and that could offer some huge short time benefits – need someone to pull an all-nighter to push a change to production, need access to some expensive software and ready to close your eyes on it’s being properly licensed, want to build a prototype without going through mandatory steps required by corp. SDLC… all that could be done with a right freelancer(s) on the job.
  • Competitive pricing – sometimes cheap, sometimes ridiculously expensive freelancers bring great competitive offering to the market place. The price freelancers can charge is market regulated and fluctuates with market; it includes minimum overhead and typically is substantially more competitive than the rates offered by outsourcing companies.
  • Many solid talented professionals end up or start up as freelancers because their true passion for what they do and that makes them so much fun to work with. I had a pleasure of working with amazingly talented freelancers in all areas of creative and technical aspects of IT – writers, graphical artists, developers, and security pros and I can not even start to describe how much their passion for work elevates the quality and productivity not to mention positive energy they radiate…

Cons of Working with Freelancers

  • Some jobs are just too big for freelancers to handle. That is a fairly obvious issue, more so, there is an important aspect to it as well – some jobs grow to be too big for freelancers to handle. That is potentially a serious trap. You start with something that appears to be a freelancing sweet spot, the spot starts to grow (scope creeps, a few cans of worms get opened, etc.) and before you know the project is out of control…
  • The word freelancer starts with “free”, not with “process” or “restrict”, and that reflects something you have to be prepared. Following strict SDLC or other processes is not typically freelancing MO. That could become a serious obstacle in project delivery, significantly reduce productivity, and in general annoy the world out of you.
  • On a similar note even basic discipline is not exceptionally common among freelancers. I guess working on the project while at home wearing your PJs affects the mind set and eventually bleeds into all aspects of professional life. Creative arts freelancers are in particular notorious for being casual in treating basic obligations – they are late for meetings, miss due dates… and sometimes (that’s my favorite) forget to bill you.
  • Finding good freelancers even with help of marketplaces such as oDesk.com or Guru.com is a challenging task. Just recently for one of my projects I needed to find a few bolggers, that seems like a no brainer, there literally millions of them… well that’s a part of the problem – you end up dealing with a lot of spam (people that reply to you post without even reading it), a lot of people who are not remotely qualified, and so on.
  • Quality of freelancing resources is very much a gamble. In my experience for every gem you have a several dozens of pebbles. It is in particular notable for short ramp up technologies and skills like “web developer”, “blogger”, etc. Pretty much anyone with PC and internet connection can claim to be one of those. With the short nature of freelancing projects by the time you realize that you got someone with no substance or skill half of your budget is gone.

Freelance workforce is just one of the tools in tech leader’s portfolio. If you apply the tool to the right job and handle it with care you can achieve some pretty impressive results. It is a powerful tool and could bring a serious damage if used by someone who doesn’t know how to use it though…

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March 20, 2009 Posted by Nick Krym | Managing Offshore Engagements | | No Comments Yet