Traveling to China? Check this post first!

shanghai-chinaChina attracts visitors in swarms every year. With a monumental 26.29 million visitors in 2013, China is gradually becoming the hub of tourism for the rest of the world despite the language barrier. Estimates suggest that in less than a decade, China will eventually become the world’s top tourist destination attracting the largest number of tourists every year.

Are you planning on visiting your provider or looking for a new vendor and thus travelling to China any time soon? Then this is the right blog for you. Read on to find out a few tips on the customs, traditions and the routine of the Chinese people and what you should avoid doing whilst on your sojourn to this exciting outsourcing destination.

The Do’s and the Don’ts to Be Mindful of When Traveling to China

Continue reading

Where To Find A Great VA

where-to-find-a-great-vaIf you have ever hired a Virtual Assistant you would probably agree that finding a good VA can be a daunting task. And if you haven’t, I assure you there is nothing easy about it! There are a ton of websites, companies and agencies that all promise to connect you with the best Virtual Assistants available.

Truth be told, a fantastic Virtual Assistant means different things to different people. They could all offer high quality VAs (not every one does) but their skills, availability or rates might not be what you need. It is important to understand the differences between the wide range of VA sources. You wouldn’t shop for new shoes in a grocery store, right? This is exactly the same with hiring Virtual Assistants. The best source completely depends on what you are looking for.

Let’s take a look at the 7 best places to find a Virtual Assistant:

  • Freelancing marketplaces
  • General purpose job boards
  • Temp agencies
  • VA Agencies
  • VA Recommendation services
  • Blogosphere
  • WOM

Now, let’s take a close look to see what we can expect from each of them:

Continue reading

How to Find Great Developers on Freelancing Sites Like oDesk, Elance or Guru

How-To-Find-Great-Developers-on-Freelancing-SitesFinding good developers has never been easier! Hundreds of thousands of first class developers are waiting to bid on your project.  Submit your idea to our marketplace and have dozens of qualified developers bidding on your project in just a few hours.   Some of the brightest minds from all over the world have come under one roof to offer their services for rates as low as $8 an hour!…    NOT!

While the above commercial sounds great, the old adage is still correct – if something sounds too good to be true it most likely is.  No world-class developer is going to work for $8 an hour.

Great Developers are Hard to Find

The good old days of $5 Ph.Ds. are long gone and never coming back. As a matter of fact someone once said, “What makes them good old days is a great imagination and a bad memory.”

Yes, the world is not yet completely flat and there is a significant difference in standards of living and that can greatly affect the rates offered by developers. Take a look for example at the comparison here. Today the difference between the average web developer in India and the USA is staggering. So it is conceivable that you can find some solid developers that are charging their average local market rates through market places like Elance or Freelancer (see, here for a comprehensive list of freelancing marketplaces).   It is also conceivable that in order to compete better that developer will reduce his or her rates. But let’s examine the chances… Continue reading

Traveling to Ukraine? It Could be a Mixed Bag Experience, So Check Out This Post First

kievEven though I have been to Ukraine over a dozen times the country never fails to amaze me with its beauty and hospitality. I always wonder if that’s just me, but all my friends who live in Ukraine or moved from claim that friendliness and hospitality are the common character traits  and beauty is genetic.  Whether it’s true or not, chances are you will love the country, and yet, traveling to Ukraine is an experience a foreigner should be well-prepared for.  So before you jump on a plane, please consider a few tips from a road warrior:

Before You Decide to Go

I would not be surprised if you are considering Ukraine as an outsourcing destination: Ukrainian IT and R&D specialists have gained plenty of recognition over the recent years. In 2011 Ukraine became the “Outsourcing destination of the Year” and since then consistently have taken the leading spot in the Eastern Europe IT outsourcing market.

Of course the recent political crisis and military activity currently taking place in Ukraine made many businessmen have doubts about outsourcing to this country. Fortunately, these doubts are not well justified, as political turmoil in the country did not affect the IT outsourcing industry to any degree of significance.

While this crisis indeed affected the local population, it it also provided many foreign companies with an opportunity to negotiate better terms, reduced employee turnover, and put offshore providers on their toes.

The opportunity as usual comes with risks though.  Nobody knows how the situation in Ukraine develops over the next few months.   Understanding your own risk tolerance and risk tolerance of your company is critical.  And if you believe that outsourcing to Ukraine remains a great option to consider but you never been there you may want to check it out, as a matter of fact you should. Continue reading

Offshore Destinations: Ukraine

ukrainiansIt’s no surprise that I have a strong predilection towards outsourcing to Ukraine – both my parents were born in Ukraine, my wife grew up in a Ukrainian city, and many of my friends have Ukrainian roots.

My own experience in working with development teams in Ukraine along with what I learned from my friends and family proved to me that Ukraine is an attractive IT outsourcing destination. I am not the only one to think this way as according to the analytics data recently released by top$dev, Ukraine takes the leading position on the IT outsourcing market of the Eastern Europe. At the moment, Ukraine takes 33% of the market, Russia is on the second place with 21.8% and the last of the top three East European outsourcing countries is Romania with 9%. Just a few years ago Ukraine was named the “Outsourcing Destination of the Year” by the European Outsourcing Excellence Awards.

Of course the recent political crisis and ongoing military operations in the eastern part of Ukraine raised a lot of concerns across business community.   But even a cursory look at the situation in the country shows that the crisis did not negatively impacted the outsourcing industry. On the contrary, this situation presents you with a lot of opportunities, for example a chance to employ qualified professionals for a lesser cost. The difficulties that Ukrainians face at the moment make them more eager to work for stable foreign companies and ready to accept lower salaries.

Personally, I am convinced that Ukraine remains a great outsourcing destination and with that let me share with you some of my personal knowledge and the information I’ve gathered through my network. Continue reading

Finding VAs just got easier

Activities that call for out-tasking, ad-hoc outsourcing or “outsourcing your life” inevitably bring us to a not so easy to resolve dilemma – where and how to find a decent virtual assistant (VA). In some cases we can engage resources from oDesk or elance, in some cases we need to find an established VA company. And like with most of vendor selection challenges choosing VA vendor is a task not for the faint of heart. Sheer number of resources that fall into VA category makes proper selection a seemingly daunting task. For example, a search for “virtual assistant” brings 29K entries on oDesk and 19K on eLance.

Interestingly enough an approach here could be using another layer of outsourcing – getting an assistant who can find an assistant… And as luck may have it a few days ago I run into someone who offers exactly that kind of services – Nick Loper, the founder of Virtual Assistant Assistant, the leading directory and customer review database on personal and small business outsourcing companies. Nick also wrote a book “Virtual Assistant Assistant: The Ultimate Guide to Finding, Hiring, and Working with Virtual Assistants” that is now available on Amazon and published a white paper that discusses the current state of the personal outsourcing landscape. Here is a summary in his own words:

It looks at some of the macro trends impacting the industry, including large scale geographic shifts in supply, and the growing confusion over what exactly is a “virtual assistant.”

The study also addresses the demand side of the equation with an analysis of proprietary never-before-released survey data from prospective outsourcing clients. This includes information on desired work functions, anticipated workloads, preferred working relationships, and more.

As demand for outsourcing services has increased, so has interest from venture capitalists. A number of high profile companies and startups have raised funds to grow their business.

Finally, the paper looks at some of the demographic data on website visitors seeking out information on virtual assistants.

Outsourcing service providers may be able to use this data to better cater their offerings to meet the demands of the market.

VA market is going to grow considerably and selecting companies that can match your specific needs would become increasingly different. In that light services like VAA could be extremely helpful. I hope Nick continues growing his business…

“Outsource it!” is now in beta

A couple days ago my first full size book went into beta and is now available at the publisher website – http://pragprog.com/book/nkout/outsource-it. I feel very happy and relieved that the book is finally out, writing it was far more challenging than I’ve ever anticipated. At the same time I feel happy and proud, proud to be one of the authors of the pragmatic bookshelf, the group of technology writers that earned respect across very broad and demanding technical audience.

It will take a little while before the book hits the shelves of Amazon and other bookstores, but you don’t have to wait and get your e-copy of it today. While the book is in beta your comments and suggestions would be taken quite seriously and could result in changes and additions to the content, hopefully making the book even better. I am not sure how long the beta would take but hopefully much less than it took me to get here –

Roughly two and a half years ago I came up what seemed a great idea at the time – compile my blog material into an easy to read eBook. In a couple months I produced the first volume that was dedicated to making decisions on whether and how to outsource. In a short order I received substantial feedback that made it apparent that just recompiling the blog and doing surface level clean up won’t add too much value, and probably was not worth the effort. Continue reading

Outsourcing Associations

Finding outsourcing vendors is not a trivial task sometimes because it’s just too many to chose from, sometimes because you just cannot find any that fit a particular criteria.  Over the years I found that generating a list of prospective vendors can often be done with a help of organization that unite offshore vendors in some manner.  As it turned out it’s not easy to find these organizations is not to easy as well, so I started a list that should be of help. So far the list is not to big and I was only able to find 20 some organizations, I hope that with your help the list will grow fast.

The list below includes top 5 associations based on Alexa Global rating.  Click here for the full list sorted by Name, here for the list sorted by Alexa Global, and here for the list sorted by Alexa US.   If you know of a site, directory or service with is worth including please comment on the page and I include in the list, feel free also email me at krym2000-po @ yahoo . com as well.

Name PR Alexa Global Alexa US Description
The International Association of Outsourcing Professionals (IAOP)
5 313,474 168,529 The International Association of Outsourcing Professionals (IAOP) is the global, standard-setting organization and advocate for the outsourcing profession. They claim to be the leading professional association for organizations and individuals involved in changing the world of business through outsourcing, offshoring, and shared services with a global community of more than 110,000 members and affiliates worldwide.
The Outsourcing Institute (IO)
5 423,525 246,289 Founded in 1993, the Outsourcing Institute (OI) claims to be the world’s biggest and most trafficked neutral professional association dedicated exclusively to outsourcing with a network of more than 70,000 professionals worldwide including qualified outsourcing buyers. Their specialties include: outsourcing, sourcing, thought leadership, state of the industry, marketing, promotions, RFP, vendor selection, relationship management and governance.
National Outsourcing Association (NOA)
5 893,216 27,276 Founded in 1987, the National Outsourcing Association (NOA) is the UK’s only nonprofit outsourcing trade association and claims to be the centre of excellence in outsourcing. Their services are focused on delivering education, excellence and collaboration and they are involved in all areas of outsourcing, including ITO, BPO and KPO.
Russian Software Developers Association (RUSSOFT)
5 902,435 55,451 Established in 1999, RUSSOFT Association is a nationwide association of the technically competent software developing companies from Russia and Belarus. It aims to represent Russian software development companies on the global market, to develop marketing and PR activities of its members, and to promote their interests in their countries’ governments.
Sourcing Interests Group (SIG)
4 1,010,363 271,503 Sourcing Interests Group (SIG) is a membership-driven organization comprised of sourcing and outsourcing professionals. They claim be acknowledged by many as a world leader in providing an ongoing forum and services to assist companies in strategy development, the improvement of goods and services sourcing, and the implementation and management of corporate services through outsourcing, offshoring, insourcing and shared services.

Top ten mistakes in selecting an outsourcing firm

A few days ago James McGovern, an Enterprise Architect from HP, asked a question on LinkedIn What are the top ten mistakes a CIO makes in selecting an outsourcing fir? Needless to say that this is not a new question and many people have answered it over the last decade (see for example “Outsourcing: 10 Crippling Mistakes IT Departments Make.” yet it set off a discussion with more than 30 people pitching in. There is no surprise here, outsourcing remains an integral part of most IT organization and many mistakes are made in every step and in every aspect of its utilization.

The thought of joining the discussion on LinkedIn naturally crossed my mind, but I realized that my contribution would be better if I put together a summary / highlight some of the most significant points brought in by others (and maybe add a few of my own) and do it here, in my blog, where this discussion naturally belongs. Also I noticed that many answers on LinkedIn went far beyond selecting the vendor and concentrated on mistakes people make when executing the contract /engagement. Great info, just not relevant to the question. Anyway, here is my list of top mistakes I’ve seen CIOs and other technology executives make when selecting an outsourcing vendor –

1) Outsourcing for the sake of outsourcing. The most significant mistake is using outsourcing to solve problems that could be addressed with other often more effective tools and measures. Outsourcing is a powerful tool, but it has its place and its drawbacks. Used without appropriate knowledge it can misfire and create a lot of collateral damage. Before you even consider selecting vendors you need to define goals and objectives you are trying to accomplish by outsourcing and only then turn to selecting companies that can support your objectives.

2) Ignoring basic rules. I covered these rules in an old post, take a look, and remember ignoring these rules is akin to ignoring gravity ;)

3) Inadequate process. Vendor selection can be a complex multi-step process or just a short project posting on a freelancing marketplace. Appropriate process must fit the task at hand, organizational culture, and available funds. Needless to say winging it or building a rocket launcher to kill a woodpecker will get you nowhere. Part of the process is defining selection criteria, see some ideas in this post.

4) Wrong focus. It’s all too often organizations take a myopic view on outsourcing and focus solely on the cost saving it can provide. Big mistake. First, outsourcing doesn’t guarantee savings, more so, it takes money to save money so chances are you will need to increase your burn rate before you can decrease it. In vendor selection excessive focus on $$$ is likely to drive you towards wrong vendor, proverbial “you get what you’ve paid for”.

5) Lack of commitment. Organizational commitment, executive sponsorship, team buy-in are key components of any initiative. Lack of commitment to selected vendor, or insufficient buy-in by stakeholders is a disaster waiting to happen. The worst case of lack of commitment is a “hands-off vendor selection” where is the team / person in charge of selection is merely involved in the process (see this for the difference between “involved” and “committed” :))

6) Technical (skills / experience / background) mismatch. The best cook on the planet is not necessarily the best pilot. Same goes for vendors – some companies are great for ERP implementations, some for iPhone development. So, back to the first point – match vendor technical capabilities to the task (objectives) at hand, and don’t expect one-fit-all providers to be the best (or any good) at the same time. And if you have complex initiative, consider multisourcing, supposedly not putting all eggs in one basket has its benefits

7) Personality mismatch. In the key to success of personal relationships is often a personality match. Same goes for vendor selection. This topic is complex and a voodoo of sorts, never the less it’s extremely important. In my book (due for publishing sometime late this year) I plan to cover this topic in more details. Fill out this form if interested, I will be happy to let you know when the book is ready.

8) Master / servant mindset. Selecting a vendor is selecting a partner, not a disposable pen. Whether it’s abusive RFP process or ruthless negotiations treating vendors poorly is likely to setup the relation for failure in the long run.

9) Lack of transparency. Many organizations hide their intentions from vendor, often to gain an upper hand in negotiations. Funny enough, this approach is unlikely to provide any advantages in the negotiations and instead is likely to mislead vendors and/or the vendor selection team. The more clarity is given to prospective vendors the higher the chances of find that illusive Mr. Right.

10) And last but not least, not talking with me. Just Kidding, at least partially. The point I decided to save for last is simple – read up, learn about vendor selection process, reach out to friends who’s done it, hire outsourcing advisor. Jumping into vendor selection process without appropriate knowledge / experience / background is the biggest mistake of it all.

List of Outsourcing Advisors

After my post on outsourcing governance I received a few emails raising the topic of outsourcing advisory. And that prompted me to do a bit of a deeper dive into the world of corporate matchmaking / marriage counseling – helping companies to find offshore vendors and later on help them with governance and management of the engagement.

This field remains huge and profitable and more so, seems to be growing in leaps and bounds. According to one of the leaders in outsourcing governance, KPMG, 70% of outsourcing users want better governance.  That’s not surprising since there many compelling reasons to engage advisors throughout the full lifecycle of outsourcing. The main being obvious – as I often say, outsourcing is a powerful tool but it a complex one and without proper knowledge using of it could be self- destructive; having someone with in-depth knowledge of the tool will spare you some injuries. If you are looking for me reasons consider taking a look at this article.

While doing my micro research I stumbled upon somewhat unexpected problem – I could not find a comprehensive source of companies that provide outsourcing advisory services. After googeling for a couple hours I figured out that a better tool here would be oDesk :) I pinged one of my VAs and she put together a list for me in just a couple days.

Please see below the top ten Outsourcing Advisors from the list based on Alexa rating (probably not the best way to rate them though), in addition you can find more comprehensive list sorted by Name, Alexa Global, and Alexa US.

Hopefully you find it helpful, as usual feel free to suggest new entries, or comment on existing ones.

Name PR Alexa Global Alexa US Description
IBM Global Services
8 446 608 IBM Global Services claims to be the world’s largest business and technology services provider. It has over 190,000 workers across more than 160 countries. IBM Global Services started in the spring of 1991, with the aim towards helping companies manage their IT operations and resources. Global Services has two major divisions: Global Business Services (GBS) and Global Technology Services (GTS). IBM Global Business Services (GBS) is the professional services arm of Global Services, including management consulting, systems integration, and application management services while IBM Global Technology Services (GTS) primarily reflects infrastructure services. It includes outsourcing services, Integrated Technology Services, and Maintenance.
Deloitte
8 6,851 4,965 “Deloitte” is the brand under which tens of thousands of dedicated professionals in independent firms throughout the world collaborate to provide audit, consulting, financial advisory, risk management and tax services to selected clients.
Gartner
7 8,659 5,056 Gartner, Inc. (NYSE: IT) claims to tbe world’s leading information technology research and advisory company. They deliver the technology-related insight necessary for their clients to make the right decisions, every day -from CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors.
PwC
8 10,816 8,629 PwC firms help organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services. “PwC” is the brand under which member firms of PricewaterhouseCoopers International Limited (PwCIL) operate and provide services. Together, these firms form the PwC network. Each firm in the network is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way.
Ernst & Young
8 13,374 8,634 Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, their 152,000 people are united by their shared values and an unwavering commitment to quality. They make a difference by helping their people, their clients and their wider communities achieve their potential.
Capgemini
7 16,622 4,942 A global leader in consulting, technology, outsourcing, and local professional services.
McKinsey & Company
7 17,418 15,185 McKinsey & Company, Inc. is a global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an adviser to many businesses, governments, and institutions.
KPMG
7 18,567 13,291 KPMG operates as an international network of member firms offering audit, tax and advisory services. We work closely with our clients, helping them to mitigate risks and grasp opportunities.
Boston Consultant Group (BCG)
7 37,830 23,291 BCG is a global management consulting firm and claims to be the world’s leading advisor on business strategy. They partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises.
Bain & Company
7 40,359 28,581 Bain & Company is a global management consulting firm headquartered in Boston, Massachusetts. Bain is considered one of the most prestigious consulting firms in the world, with 47 offices in 30 countries and over 5,500 professionals on staff globally.

PO Trip Adviser: China

And now a brief list of travel tips for one of my favorite destinations – China, the country that changes with amazing speed right before our eyes.

If there is anything that I regret about traveling to China it is not spending enough time there, not meeting enough people, and not seeing enough places.

I remember sitting on the Great Wall looking at the hills that look exactly like those on ancient paintings and thinking that for many Americans visiting China could be experience equal to visiting a different world, another planet… Well, that’s also changing rapidly.

  • A Visa is easy to get, but it may take a few weeks so allocate sufficient time. Also make sure that you have the travel plan worked out before you apply for Visa as you may need several entry authorizations as cities such as Shenzhen require special handling.
  • The most difficult aspect of traveling to China is language, very few people speak any English and you won’t find too many signs in English either. As a result public transportation even inner country air travel becomes challenging.
  • China is a reasonably safe country, and when it comes to main outsourcing destinations within country is very safe.
  • With petty crime on a raise you should be aware of environment and follow common sense practices such as not carrying large amount of money, protect your passport and valuables, etc.
  • The police in China are generally very friendly, though they speak very little English except in Beijing, Shanghai or Shenzhen, where some police can generally speak simple fluent English. If you are lost then ask for directions as they will usually be happy to help.
  • Stay in 4-5 star hotels remains relatively affordable. That will also ensure English speaking staff, access to tours, restaurants, etc.
  • Driving in China is somewhat strange experience – on one hand I was surprised with how closely some laws are followed, e.g. the speed limit – most of the cars travel ~5 mph below it. On the other hand I saw a lot of erratic moves and turns that were not aggressive just plain dangerous.
  • Sightseeing in China can be easily arranged with the help of the vendor or hotel staff. Keep in mind that most of professional tour guides are in cohorts with retailers specializing with ripping off tourists selling you “traditional” china, tea, souvenirs, etc. at 3-5 times the price you can get them elsewhere.
  • Eat only in good restaurants or at your hotel. Avoid eating buffet meals, even in high-end places. Not only drink bottled water, but also brush your teeth with it. Most of hotels provide bottled water for free. In restaurants I recommend boiled water / hot tea.

PO Trip Adviser: India

Continuing with a line of travel guides I turn to the most common outsourcing destination – India. There are a plenty of outstanding travel guides for India, so if you are planning to combine business and pleasure, and see places such as the Agra, Rajasthan, and Kerala make sure you study them before you depart.  Keep in mind though that most of the most interesting places will take dedicated and possibly considerable time, for example while Taj Mahal is fairly close to Delhi / Noida the trip there is going to take you at least a day.

For those of us who are limited to strictly business, here are a few tips to consider:

  • A Visa is easy to get, but it may take a few weeks so allocate sufficient time.
  • Safety of travel in India is not what it used to be just a few years ago, yet large outsourcing cities remain quite safe for majority of business travelers.
  • Shop around for tickets and ask frequent India travelers for advice. Chances are you can find something 30% less than standard internet rates using Indian travel consolidators.
  • Chances are you will arrive in India around midnight. I typically go straight to a hotel right near the airport and start my business day the next morning.
  • Stay in nice hotels, 4-5 stars. They are relatively affordable and the high quality service will help you to retain the energy you most certainly need.
  • Ask the vendor to arrange all your travel and have a car with a chauffer. Don’t even think about driving in India. The traffic and road system is not for the faint of heart plus they drive on the wrong side of the road!
  • Petty corruption is widespread in India, from expediting you through airport customs to dealing with government agencies and employees can involve bribing or “tipping” as it is often referred to. My advice it to stay away from it.
  • Make sure you have your personal belongings partitioned among suite cases and carry on. Lost luggage is a fairly common event. Use solid suitcases as mishandling is also common at airports.
  • Don’t wander off the beaten track, don’t encourage beggars, don’t visit shady places, don’t leave your valuables unattended, don’t put your wallet in your back pocket, use licensed guides in sightseeing – basically use common sense!
  • Eat only in good restaurants or at your hotel. Avoid eating buffet meals, even in high-end places. Not only drink bottled water, but also brush your teeth with it.

PO Trip Adviser: Russia

While working on a outsourcing destinations chapter for my book I realized that tips for travel in many countries could be helpful to those not accustomed to traveling to third world countries and other outsourcing destinations.  Of course there are plenty of books, websites and forums covering travel to any place in the world.  I am not planning on competing with them in any way, my goal is create a simple list of items to keep in mind when visiting a vendor far away from your home becomes necessary.   I am planning to put a couple posts covering few countries that I have a fortune to spend time in and let me start with the one that I lived in for 30 years…

So, here we go – a few tips on traveling to Russia – one of the top Eastern European outsourcing destinations:

  • Visas are required and getting one can be a tricky process. Make sure you allocate at least one month for processing the paperwork.
  • Unfortunately terrorism and street crime are a part of daily lives in many parts of the Russia. Still, on a relative scale, Russia, and especially the tier-one cities, are safe and great places to visit.
  • Shop around for tickets. If you know any Russians who stay connected to their motherland, ask them for help. There are many Russian travel agencies that can find great deals on tickets.
  • Staying in nice hotels can be price prohibitive, particularly in tier-one cities. Ask your vendor for help with travel arrangements.
  • You can rent a car and drive in Russia. Be prepared for a manual stick shift and very aggressive driving styles. You may face very serious traffic and won’t see any signs in English, so finding your way can be a challenge.
  • Ask your vendor to arrange sightseeing for you. Due to large distances and complexities in city navigation, you would be much better off on a guided tour. And I assure you Russian cities and their suburbs have a lot to offer a curious visitor such as architecture, landscape and even shopping.
  • Ask your vendor for recommendation when it comes to restaurants. Nowadays, especially the big cities, offer a great variety of styles and cuisines but the cost can be astronomical. Just like many other destinations, not only drink bottled water but also brush your teeth with it.
  • Prices are generally quoted in rubles. Currency can be freely converted at banks, hotels or kiosks specifically for tourists.

If you have any suggestions, ideas or tips on travel to Russia please comment or email me, I’ll be happy to update the list.

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.”

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to Ma.gnoliaAdd to TechnoratiAdd to FurlAdd to Newsvine

Top Emerging Companies in India IT-BPO

Finding a provider in India could be very challenging process. Sheer number of providers combined with high percentage of body-shops with prevalent mediocre resources, ongoing changes in the industry, recent scandals, cutthroat competition exacerbated by industry decline make up for a daunting process. The process becomes especially complex if you target a small to midsized vendors. Analysts reports are not likely to offer tremendous help here as they often stay with top tier vendors. Naturally you want to seek help from industry organizations, and when it comes to India you can not ignore NASSCOM with its 1200+ members. Recently one of the NASSCOM initiatives yielded a list which you might want to consider: NASSCOM announces the Top 15 – “Exciting Emerging companies to Work for”- 2008. The list offers 15 companies that came from a list of ~400 companies. Rather exclusive group I would say. To my great surprise I actually knew two of the 15 names:

  1. HeroITES
  2. Corbus (India) Pvt. Ltd
  3. AgreeYa Solutions India Pvt. Ltd.
  4. Nagarro Software Pvt. Ltd.
  5. R Systems International Ltd.
  6. Synygy India Pvt. Ltd.
  7. Acclaris Business Solutions Pvt. Ltd.
  8. Infogain India (P) Ltd.
  9. Hytech Professionals India Pvt. Ltd.
  10. Nucleus Software Exports Ltd.
  11. Sopra India Pvt. Ltd.
  12. Cactus Communications Pvt. Ltd.
  13. Interglobe Technologies Pvt. Ltd.
  14. H5 Asia Pacific Pvt. Ltd.
  15. Saba Software India Pvt. Ltd.

While the focus of the survey was to identify the best small and medium sized IT-BPO companies to work for, it serves as a great list of the best small and medium sized IT-BPO companies to deal with as there is typically very strong correlation between those two.

oDesk Freelancer Stats and Mashups

A few posts ago I mentioned a report covering some insights on international freelancing community that was made available by oDesk. Sine then I had a chance to take a deeper look at oConomy and found information there even more interesting and insightful. oDesk did a great job on presenting freelancer statistics in chats and Google mashups.

Of course when it comes to picking an offshoring destination freelancing data needs to be taken with a grain of salt. In particular a freelancer’s rate is a product of many criteria and only portion of those are locale-dependant. Freelancing through aggregators / monster boards like oDesk is still in its early stage, over time the rates and other stats will have a greater degree of correlation to local salaries, availability, etc. However, even today, these figures provide an interesting reference in terms of understanding the local dynamics. Let’s take for example geo distribution for Russia vs. population and rank for top 10 cities on oDesk list:

oDesk Rank City Number of Providers Average Charge Rate Average  User Score Population Rank
1 Moscow 486 $19.39 4.21 10,470,318 1
2 Omsk 444 $16.12 4.28 1,134,016 7
3 Taganrog 207 $15.82 4.28 281,947 66
4 Saint Petersburg 200 $17.76 3.69 4,661,219 2
5 Novosibirsk 121 $16.75 4.34 1,425,508 3
6 Tomsk 98 $15.83 3.99 487,838 34
7 Rostov-on-Don 69 $15.28 4.15 1,068,267 10
8 Nizhniy Novgorod 44 $15.11 3.28 1,311,252 4
9 Smolensk 34 $14.24 3.54 325,137 56
10 Irkutsk 32 $24.13 4.62 593,604 24

As you can see the figures are somewhat counterintuitive. Take for example Taganrog a small city in the same region as Rostov-on-Don which is roughly 3 times bigger and considerably richer as well, yet freelancer community is 6 times the size of Rostov-on-Don’s.  Taganrog is even ahead of Russia’s second largest city Saint Petersburg.  Most likely these figures confirm that freelancing community’s embrace of oDesk services is in its humble beginnings and that more business will flow to companies like oDesk, Guru, eLance and others.

I hope oDesk keeps oConomy live and updated with the latest info, it would be also great to see their competitors to follow in suite.

Researching Offshore Rates

Questions about offshore rates in different geographies, for different positions and roles come all too often. I covered a few aspects of this subject in my earlier posts, for example Offshore Developer Rates and Negotiating a Fair Rate. One of the points made in these posts was that the rate is just a contributing factor to the bottom line – the Total Cost of Outsourcing. Nevertheless, the rate is important and getting information about what’s fair for a specific position, geography, region, etc. could be extremely valuable, especially during the initial stage of the vendor selection.

Getting ballpark figures for the rates is very simple; all you need to do is just ask. The trick is to understand trends and the negotiation space. For example when a few weeks ago a mid-sized nearshore provider suggested that their standard billing rate is 35-40 USD for QA engineer and 40-50 USD for Java Developer I knew that I am talking with someone with a lots of guts or sense of humor.

In a large degree rates are marked up wages. The mark up includes many elements such as employee benefits, operations overhead, sales and marketing overhead, G&A, and so on plus expected margin. When dealing with large providers (public companies) many essential facts and ratios could be found in financial docs that are open to general public. Small vendors can be better at some cost cutting techniques but they loose on the “economy of scale” so the chances are the key ratios would be similar. In that light the question of fair rates comes down to salaries and expected margins.

When you negotiating with an offshore vendor the margins are the negotiation space; they can not typically fall below minimally expected and of course never cut into salary. That’s unless the vendor operates under famous model “we lose money on every deal but we make up in volume”.

Consider an example: you pick a couple vendors that appear to be fairly similar in most aspects; one of them has ODC based in Shanghai and anther in Shenzhen. Both vendors offer you the same rates.  Which of them is more likely to offer steeper discounts? As you can imagine knowing that salary a developer can expect in Shanghai is ~15% higher than in Shenzhen would be helpful.

To determine the salary that an average vendor needs to pay to its employees you would need to go through some research. The figures change constantly, substantially and depend on many parameters – local economic situation, dollar exchange rate and specific location being the most important.

The best thing is if you can get your hands on a credible research, those could be rather expensive though. If that is price prohibitive you should talk with your omnipotent friend Google. It is amazing how much info you can find. For example just look at this jewel – Salary Trends in China Present New Business Opportunities. Barak Paztal, the author of the post used one of the best ways of discovering current salary and salary trends – he went through backdoor of popular job board to present data which is priceless for those planning to outsource or build their own shops in China. For example did you know that “General trends show that over the last 12 months salaries have been decreasing in China. The average decline from an annual salary of $5,344 hovers at 11%, or $4,977.” BTW, that’s about 7 times lower than in the USA. Or look at that:

“Software engineers in China regularly earn 44% more than the average. They will earn an annual salary of $7,200, while in Beijing they can expect to earn an additional 30% or $9,360. Companies seeking to hire software engineers can save up to 40% of salary costs by hiring in cities like Dalian, the software outsourcing center of China where the average salary is $7,056 or Jinan, with 5M people and few hours by train from Beijing with an average salary of $5,760. Office space in these areas can also help to dramatically reduce costs, in particular now that they have reached peak levels, as demonstrated in Beijing following the Olympics.”

When looking for just ballpark assessment you can do away without the access to backdoor of the job boards. Just browsing through sufficient number of job ads will give you a great preview. Another simple way to get high level salary info is through rates available on freelancer sites such as elance.com, odesk.com or guru.com.

Once again since the goal here is not competitive intelligence but trends analysis the ballpark estimates would do just fine.

Top India Cities for IT Outsourcing

I just stumbled upon an interesting post – The Top Ten Cities for Outsourcing in India. Bala, a Software Programmer working in Chennai, India refers to several major studies by big name industry analysts that produced the top 10 list. India has 35 major cities, not all of them are good offshore outsourcing hubs, for example India’s financial capital Mumbai is not one of those.

The list includes top 10 outsourcing destination in the following order: Chennai, Hyderabad, Bangalore, National Capital Region (NCR) includes Delhi and its surrounding suburbs, Pune, twin cities Chandigarh and Mohali, Kolkata, Mysore, Thiruvananthapuram and Coimbatore.

Pros and Cons of Outsourcing to Brazil

A couple months ago I was talking with Alexandre, a project / account manager from a mid-sized service provider based out of Campinas, an industrial city North of Sao Paulo, Brazil. Alexandre’s team did a great job on one of my past projects and we continue to stay in touch after the engagement ended. The question of Pros and Cons of Brazil outsourcing inevitably came up and I committed to writing this post after some follow with my network and learning a bit more about the destination.

Brazil, the first country in the famous BRIC acronym is not one of the first names that come to mind when you consider IT offshoring destinations. I am sure that overtime that will change and Brazil will gain a permanent spot on the list of top players in technology outsourcing. You would probably agree with me if you look just at the list of Pros of that destination; the Cons may affect your opinion but won’t dramatically change it.

Let’s start with Gartner rating for Brazil which I agree to some degree:

offshore1

English Skills. English is a very popular skill and not hard to find with technical professionals in Brazil. However, it’s no match to what you find in India. As a matter of fact when you focus on technical skills sooner or later you will find yourself compromising on English fluency.

Government Support. Very interesting topic. According to my connections in Brazil government is unusually supportive in developing IT outsourcing however results of it remain to be seen.

Infrastructure. Unless you partner with a very small provider located in a remote province city you will find infrastructure that meets reasonable expectations. In my / my network experience telecom and other aspects of the infrastructure are excellent.

Labor Pool / Access to Resources. Brazil employs one of the largest IT communities in the world. The IT work force is large and experienced. This is also a highly educated professional work force as Brazilian universities are fairly competitive to get into and rather inexpensive to stay in. Of course in sheer numbers Brazil falls far behind India and China. Finding top-notch technical resources in Brazil is not easy like everywhere else in the world, yet is possible, even when it comes to cutting edge technologies and methodologies.

Educational System. I can not completely agree with Gartner here, while education system in Brazil is not as stellar as in Argentina or Canada when considered from IT stand point it’s at least at par with Chile and Mexico. In my experience the quality of recent grads with CS degrees is very good and that’s rates high on my book.

Cost. Pure comparison of the rates with India or China puts Brazil in serious disadvantage. Based on a limited sampling of rates I had access to it is 30-80% higher than rates for comparable resources in India. The difference could be even higher if you try to take into consideration the tier of the city and vendor. On the other hand, as I mentioned numerous times, rate is only a guideline to cost, the total cost of outsourcing has a considerably lower difference.

Operating Environment. Air travel to Brazil is convenient and affordable. Sao Paulo is a 10 hour direct flight from Atlanta, GA. Small time difference and thus no jetlag make a huge difference in overall comfort of travel. Finding excellent and fairly affordable hotels, restaurants and other creature comforts is easy. With a little support from your vendor chances are you will stay in safe areas and won’t need to deal with crime which is unfortunately a serious issue in the country. Getting things done requires understanding of the system and is manageable. One of the big Pros of the country that came up many times in my discussions was absence of natural disasters

Nearshore advantage. When it come to US based customers Brazil offers nearshore model which is an advantage of high caliber especially for agile projects. Time difference, travel ease, low cultural barriers, etc. institute a huge Pro for Brazil which offsets its high rates to a large degree.

Cultural Compatibility. In my experience as well as according to everyone I checked with cultural differences are very easy to deal with. As a matter of fact when I asked around within my network I heard more about cultural similarities rather than differences. Of course the differences are there and they can not be ignored, here are just a few to consider:

  • First and foremost language issues makes a huge imprint on communications, watch out for idiomatic expressions and professional lingo.
  • Work / life balance. While many of guys in my Brazilian teams worked crazy hours the attitude towards work / career / life balance was quite different, and that is particular notable if there is a beach nearby.
  • In my experience working with Brazilian teams as I noticed that it developers very long time before they could to offer their opinion or disagree with USA team members. That was quite different from Indian “never say no”, it appeared more like fascination with US tech workforce and overly humble judgment of own abilities. Very similar sentiment came from my network as well.
  • Facts and technical quality of the solutions carried less weight with Brazilian team than perceived “authority” of individual. There was also much higher level of sensitivity towards “people feelings” than the one you would typically observe in the states; sometimes to determent of the project.
  • And, in my opinion, common for the entire region tendency to put very high emphasis on theory and academic values versus pragmatic business decisions.

Resource Quality / Technical Capability. IT outsourcing in Brazil doesn’t seem to be in the same cut-throat competition with other IT employers as in India. It seems that Brazil is still in a stage when working for outsourcing company considered prestigious and highly desired job. In that light getting your hands on top notch resources is still possible.

Turnover Ratio. Turnover ratio claimed by the vendors is low and that has been my experience as well. My limited scope survey gave very positive results with average about 13%. The attrition was also of general nature mainly family issues or education. Not too much of job hopping or inter-company transfers.

There is one more issue worth mentioning – finding vendors in Brazil is not as easy as it should be. Hopefully the latest efforts of several outsourcing vendors combined with the government support give us a solid provider directory which will help us in finding those perfect matches made in IT heaven. But for now consider these links as the humble beginnings – www.softex.br, www.brazil-it.com, www.actminds.com, and www.brasscom.org.br.

oDesk: Freelancing Destinations

Very interesting statistics made available by oDesk, a freelancing marketplace that now tops 150,000 individuals worldwide in over 100 countries. Freelancing geography as seen from oDesk perspective appears quite different from what we see in trends on geography of regular IT outsourcing, for example US freelancers offer strong competition and reasonable costs. The list of top freelancer countries also includes Canada, Russia and Ukraine rather than China and Brazil.

CANADA
Total Number of Providers: 3,581
Average Hourly Rate Charge: $19.60
Average Feedback Score: 4.32 (out of 5.00)

INDIA
Total Number of Providers: 27,454
Average Hourly Rate Charge: $12.52
Average Feedback Score: 4.01 (out of 5.00)

PAKISTAN
Total Number of Providers: 5,960
Average Hourly Rate Charge: $11.13
Average Feedback Score: 4.36 (out of 5.00)

PHILIPPINES
Total Number of Providers: 17,213
Average Hourly Rate Charge: $6.33
Average Feedback Score: 4.30 (out of 5.00)

RUSSIA
Total Number of Providers: 2,721
Average Hourly Rate Charge: $16.86
Average Feedback Score: 4.31 (out of 5.00)

UKRAINE
Total Number of Providers: 2,929
Average Hourly Rate Charge: $15.96
Average Feedback Score: 4.36 (out of 5.00)

USA
Total Number of Providers: 52,637
Average Hourly Rate Charge: $18.32
Average Feedback Score: 4.40 (out of 5.00)