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How to Do IT Outsourcing Right and Be Smart About It
- 1. HOW TO DO ITOUTSOURCING RIGHT AND BE SMART ABOUT IT
- 2. What is IToutsourcing? IT outsourcing is the use of external service providers to effectively deliver IT-enabled business process, application service and infrastructure solutions for business outcomes. www.gartner.com/it-glossary/it-outsourcing/ Onshore External teams in your country. Nearshore External teams in adjacent time zones, probably 2 - 3 hours ahead of you, 5 - 6 hours of flight. In some countries there is no need for an entry visa for US citizen. English is not a native language, but widely used in professional circles. Offshore - CEE External teams from the European region, 9 - 11 hours ahead of you, 8 - 9 hours of flight. Visa-free entry for US citizen to all CEE countries, except for Russia. English is not a native language, but widely used in professional circles.
- 3. Is there anydifference? Onshore Nearshore Offshore to CEE ■ Same language ■ Quick on-demand meetings ■ Modest travel expenses ■ Rates are lower ■ A “global” business day is 2 - 3 hours longer ■ You can access a wider talent pool ■ Talent shortage ■ Local rates ■ Where are their developers? Reasons to work locally What to consider ■ Higher travel expenses ■ Lack of face to face communication ■ More project documentation required ■ Virtual stand up meetings What to consider ■ Rates are lower ■ A “global” business day is 8 - 11 hours longer ■ You can access a wider talent pool ■ Higher travel expenses ■ Lack of face to face communication ■ More project documentation required ■ Virtual stand up meetings ■ Longer business hours required ■ Considerably more online communication What to consider Reasons to outsource Reasons to outsource
- 4. CEE locations &How to get there 75,000UA 53,000BY 18,000BG 80,000HU 65,000RO 63,000CZ 162,000PL ITC industry size, people
- 5. What to expectfrom CEE IT companies ■ 100% fit to US and Western Europe business culture ■ Project rates are roughly between $15 and $55 per hour; up to 20% discount on rates for 6+ months assignments ■ English is the primary language for business communication ■ Established CEE IT companies have development offices across the region to maximize access to talent pool ■ Engagement models are fixed price, T&M as well as dedicated teams ■ Proactivity. They will challenge any technical brief to make sure it describes an optimal solution. ■ IT companies formed IT associations within each CEE country as well as global associations to lobby industry interests ■ IT industry faces strong government support and tax reductions in many CEE locations to boost the industry growth
- 6. Technology stack inCEE Source: dou.ua, dev.by Technologies in use
- 7. Technology stack inCEE Source: dou.ua, dev.by Professional satisfaction by technology
- 8. How to finda tech partner in CEE
- 9. Most common typesof companies ■ global locations across CEE ■ U.S. and Western Europe presence Enterprise level providers Boutique agencies Bottom feeders Expected rates $30 … $55 $25 … $40 $15 … $25 Stable but sometimes not flexible enough to work with SMB ■ 500+ employees ■ 10+ years in business ■ representative offices in the U.S. ■ process oriented, focus strong quality control ■ deliver on time and budget Great choice for SMB, but charge higher rates in exchange for a deep understanding of a business niche ■ 15 to 100 FTEs ■ strong industry and domain expertise ■ diverse technology stacks ■ no representation in US ■ no business continuity plans ■ roughly 0 - 3 years of experience Risky ground at low rate, often with unrealistic deadlines ■ undocumented processes, no quality control ■ project deliveries are not guaranteed
- 10. Organization readiness checklist ■Do you have a clearly defined reason for outsourcing? ■ Is your company prepared for outsourcing? ■ Are you personally ready to work longer hours or off-hours? ■ Have you decided on an outsourcing location? ■ Have you decided on an outsourcing business model? ■ Do you have time and budget to travel to your preferred or key outsourcing location?
- 11. Partner selection checklist ■Do they have positive track records? ■ Do they have positive references? ■ Do they have the right technology expertise? ■ Do they show a long-term partnership approach? ■ Are they ready for a full vested involvement in the project development as your business partner, not just as a third party developer? ■ Are they flexible enough to work under your processes? NB: sometimes you need to be flexible and adopt the best practices, tools, and processes from their side.
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