Outsourcing – Does Remotely Mean Worse?
One of the most common indications of a lack of trust is a reluctance to cooperate remotely. In my opinion this is a somewhat paradoxical phenomenon. We live in a time of technological development unprecedented throughout the history of civilization. We can conduct a video chat from Munich or London with a cousin from Australia, or show our parents in Poland photos of our trips from Canada, or study via courses taught by lecturers in the United States without leaving home in Manchester. Moreover, doctors who are hundreds of kilometers away from the patient can consult and even perform surgical procedures.
So why would a potential customer, on hearing that a developer could work for him remotely, respond as if someone was trying to get him to dive head-first into an empty swimming pool?
Where does this need for control, which may be illusory in practice, come from? Why assume that remote tasks must involve lower quality, as well as security risks? The paradox is that often the same person shares his private network and confidential matters in good faith that no one will use this data against him, yet prefers traditional forms of carrying out projects at work. But technology can carry a threat in both our private and professional lives, because eavesdropping, tracking, or data theft are just as commonplace as the positive examples mentioned earlier. Technology is ethically neutral, but the way it is used is determined by people. Security is also a product of the technologies, rules and good practices used, both privately and professionally. The same is true both remotely and on-site.
But returning to the topic at hand – an unwillingness to work remotely is most often explained by the following arguments:
- integration of the team is necessary,
- real-time communication between team members is required,
- workers are physically present at headquarters out of habit,
- management is unwilling to run such risks,
- it has been tried, but didn’t work out,
- we don’t want to lose control of security,
- it’s important that people are connected to us.
But let’s look at the facts. Around 70-80% of developers at JCommerce work remotely for clients. Interestingly, these clients are mostly foreign companies: from Switzerland, Germany, and Scandinavia. How is it that cooperation proves successful, despite the tyranny of distance, the rarity of face-to-face encounters (due to the optimization of flight and accommodation costs) and the need to communicate in a foreign language? Communication works smoothly, the quality of service is high, and problems are solved as and when they arise.
It is also important that the customer does not have to take care of office space, furniture and equipment. Security, which is of vital importance, is ensured through the appropriate management of access and permissions (in accordance with previously agreed procedures). In some cases, the client passes equipment on to the developer, including the computers they administer according to the company’s standards. Remote work is generally not a security risk, at least no more than on-site work.
Finally, we come to the so-called ‘soft’ issues, such as the problem of employee integration. The brutal truth is that if the project is badly run and such factors as chaos, lack of documentation, lack of consistency, or a bad working atmosphere arise, then even the physical presence of team members in the office will not change anything. Developers, whether they are permanently employed or just on a contract basis, will look for other options, and will soon find them in today’s business climate. Conversely, a good atmosphere and efficient communication within the project can also be achieved from a distance, merely by using the appropriate tools and techniques of team management. The conclusion is that the integration of workers and the possible problem of rotation within the project are not in any way dependent on geography.
In summary, it is worth knowingly leaving one’s comfort zone, abandoning the stereotypical limits to development, and exploiting the benefits of remote work, which would mean:
- no office overheads or cost of commuting,
- a broader choice of specialists (we have developers from many cities, even countries, at our disposal),
- better quality work – here the phenomenon of scale comes into play, i.e. an employee of the service provider, working remotely, can more easily and quickly consult on the problem with equally or even more experienced colleagues from his or other teams,
- a good IT service provider will also have no issues with allowing the customer to test the remote work option in practice (e.g. a trial period with the possibility of terminating without notice and then proposing a different specialist).
Italy – CCM application redesign
The PRT Group, a provider of Customer Output Management Services has decided to cooperate with JCommerce in terms of adjusting internal systems to the new technical and business requirements.
The aim of the project is to upgrade basic production workflow and upgrade current applications to more technology advanced versions and features. JCommerce team participate actively to the review and the upgrade of logical, technical and presentation PRT Group’s system features to create a unique omnichannel CCM platform.
PRT Group, is an Italian provider of Customer Output Management Services, and the distributor of outbound communications through various channels.
Agile Outsourcing Increases the Efficiency of IT Projects
Rising competitive pressures, a reduced product lifecycle and technology-driven changes in business processes have significantly limited the ability to explicitly specify the scope and objectives of IT projects. This makes the classic transactional approach, in which the customer and the service provider sign a contract for the delivery of a particular service (usually software or outsourcing services), usually at a fixed price, anachronistic and therefore increasingly difficult to apply. The initial detailed project assumptions in the contract at the beginning of cooperation will probably be outdated after just a few months of development work.
Agile outsourcing solves the problems of recruiting IT professionals
Agile management helps to rise to the challenges of the market – short sprints and iterations, which end up with the provision of a functioning part of the software and checking that it is done in line with the customer’s expectations, lessening the risks inherent in project development. With the Agile approach, changes in the project are programmed into the service delivery process, in order that they do not disrupt workflow, which is a common problem with traditional waterfall approaches.
Agile methods break down barriers in the form of differences in corporate culture, making collaboration between organizations much easier and more effective. “Agile is to IT outsourcing services what English is to the business world – it’s a community of organizations that blurs the boundaries between companies regardless of their geographical location: we all speak the same language, we use the same concepts, we work the same way, we know the same rules. The concepts of sprints, daily meetings, and scrum masters mean the same everywhere. An outsourced worker does not land at a new client’s premises like an alien from another planet. With Agile, everywhere feels like home” – says Piotr Zyguła, CEO of JCommerce. “The Agile approach in software development processes allows us to easily become part of the customer’s organization.”
Agile IT outsourcing also enables service scalability – the customer can be flexible in customizing the number of employees to match the skills they need at that particular point in time. This is a significant change, because under the classic approach, the time it takes to bring a new IT specialist on board (from the time when the need to find someone is noted, through the recruitment and onboarding processes, to the point when the new employee becomes a productive staff member) is very long, and in the face of the shortage of programmers on the market, is further encumbered by the risk of failure.
IT outsourcing ensures cost flexibility, which has traditionally been one of the most commonly advanced arguments in its favor. At present, the issue of cost is raised more and more by big business executives; IT outsourcing is increasingly seen as a way to provide organizations with innovative technologies and solutions that are emerging from among startup environments, as well as individual enthusiasts of modern technology.
Outsourcing in the Agile model
People and interactions over processes and tools. Agile outsourcing strongly emphasizes the role of transparent communication, because cooperation in this model requires a lot of trust on both sides. Employees sent to the client by the outsourcer expect a degree of independence, respect for their ideas and participation in decision-making. The customer expects professional service, results and the fulfillment of their business needs. These expectations complement one another, but only open and efficient communication can ensure that they stay aligned during the project.
Results over bureaucracy. The goal of outsourcing services is to provide specific business benefits. Creating reliable documentation is of course important from the point of view of the project; however, it will never be more important than delivering working solutions, fixing problems which may emerge, or tailoring the project to the changing needs of the client.
Cooperation is more important than a detailed contract. Instead of creating a contract based on a list of specific requirements, it is worth asking the outsourcing partner for a proposal for how to deliver a particular service, and then negotiating the terms based on that. This is an excellent starting point for creating an outsourcing contract that should not be treated as a rigid plan for the implementation of the project. A good outsourcing contract will maintain flexibility while also safeguarding the fundamental interests of both parties.
ING Bank (ING Bank Śląski) owes its performance to Agile outsourcing
ING Bank Śląski has a great deal of experience in IT outsourcing in the Agile model, building the entire organizational structure and methodology of working on Agile principles.
“Collaboration in the Agile model should primarily guarantee open communication and enable the application of Agile approaches in practice. Openness, commitment and having the courage to communicate are key qualities in achieving success. Transparency is also important, as is the willingness to understand that what was important at the beginning of cooperation or at a particular moment in time can change – just like the measures of success. It is therefore important to maintain an Agile ‘inspect & adapt’ approach” – says Seweryn Papierz, Senior Agile Coach in the Agile Transformation Support Team at ING Bank Śląski.
Responding to changes is more important than implementing plans. In the case of the Agile model, both parties to the outsourcing contract should be aware that the goal is to achieve tangible benefits and fulfill customer needs, which are dynamically changing in today’s world. Such cooperation cannot be implemented on the basis of calculations adopted at the beginning of cooperation; reaping the benefits of a flexible model of cooperation with the outsourcing partner requires a flexible approach from the client’s side.
Agile outsourcing – where to start
The largest beneficiaries of IT outsourcing in the Agile model will be organizations that already operate according to these principles. In such companies, the use of outsourcing services is an extension of operational strategy.
For organizations with no Agile experience, it is worth considering a simplified approach – otherwise the Agile management model may encounter resistance from employees.
The best option in this situation may be Talent Leasing (i.e. outsourcing in the team extension model), meaning hiring an employee who already has experience in Agile methodology. This person will complement the existing team of IT specialists and allow them to gradually adapt to the new organizational culture. The number of outsourced workers can later be adjusted to the needs of the client. The result will be the transfer of knowledge, experience and the ability to operate according to Agile principles, as well as the gradual preparation of employees for cooperation on projects with employees of external companies.
Belgium – Microsoft Dynamics NAV development
Carya Group delivers, implements and maintains Incadea DMS, based on the MS Dynamics NAV system, for the comprehensive management of car dealerships, covering areas such as purchases, sales and service.
JCommerce cooperates with Carya Group in the team extension model and is upgrading the old Dynamics NAV 2009 system to the new Dynamics NAV 2013 R2 version, and provides consulting services for NAV 2013 R2. Some of the solutions will be created from scratch, such as the validation of address data via web services, MS Word templates, and electronic handwritten signatures.
Ecommerce solution for a German client
JCommerce is consistently increasing the size of its customer base in the DACH region. Among the latest projects is the creation of an online shop for a German luxury goods retailer.
The Webshop was created from scratch. The platform has a CMS administrative panel, integrated with the sales system. The website enables easy product searching and a fast order process.
IT Service Provider – Trusted Technology Partner
Sales representatives, account managers, project managers and implementation specialists, as well as programmers themselves – in other words, the entire team responsible for the fulfillment of the contract with the customer – have been arduously working on changing the image of the service provider and building essential trust. What is such work based on? Firstly, the development of effective communication methods between the parties involved. The market has evolved over time, the terms of cooperation have stabilized, business relationships have changed, and more and more often, the client has a desire to strengthen cooperation, which can bring greater operational effectiveness as well as measurable benefits for both parties, not least in financial terms. However, certain conditions must be fulfilled.
Most of them are related to the broadly understood quality of cooperation that the service provider must offer to gain the trust of the customer and deserve to be called a professional partner. I will focus on a few selected factors only.
Ethics and loyalty in business
The principles of fair play, meaning how the parties treat each other, how they fulfill promises made in business meetings and negotiations, and how they talk about each other after cooperation has been completed, can all be called business ethics in general. These are by definition unspoken rules, because no contract is able to ensure loyalty, but without them, business cooperation cannot meet the expectations of both parties.
Expertise / technological competence
Technological competence, or the so-called technological stack offered by the service provider, and therefore the scope and level of expertise in the technology delivered, is extremely important from the perspective of trust in business. The technology partner needs to have specific skills, by which I don’t mean image, but the objective professionalism that allows for fairness in cooperation. Both competence in terms of the technology used in the project and knowledge and design experience beyond the scope of the contract are important here, as they help to rise to unexpected challenges that may arise in the project.
Maturity of the services rendered
The business maturity of a technology partner is manifested in experience, the ability to anticipate, and the awareness that the work done for the client is really an investment in the future and development of his own business. In this case, I chose the three most important areas to focus on: involvement, planning and timeliness. Of course, you can create a long list of qualities that show the maturity of your business partner, but these are undoubtedly key in building trust. Involvement is expressed in an active approach to the project undertaken jointly with the client. There is no question of passively waiting for allocated tasks. For example, in the team-extension model of collaboration, the members of the service provider’s team will not only carry out the tasks assigned to them, but also demonstrate their activity in more complex issues such as planning the architecture of the target solution, creative problem solving, or offering best-of-breed tools.
Correct planning and punctuality are very important, if not the most important, factors, and most often depend on whether trust is built between both parties. For this reason, an estimation is created on the contractor’s side pertaining to the time required for development and other necessary work. On this basis, a timetable is established. The partner’s business maturity can be seen in estimates of time-consumption that are realistic and not just created to offer a better deal. An experienced technology partner knows how much time it will take to complete the project, so estimates will not be artificially underestimated or inflated (which is likely to be the case with an inexperienced supplier who fights for a price at all costs or fails to adequately estimate the time needed and bumps up the estimation as a result). Experience and maturity allow for the creation of a plan for which the supplier will be able to take responsibility, and deliver the product on time.
The client and design challenges
We must not forget the client in all this, as in the end, cooperation has an effect on both parties. Without a suitable approach on the client side, a true partnership in cooperation is obviously not entirely possible. The customer should have the flexibility, commitment and good will to cooperate with the other party. Aspects of a project where significant customer flexibility can be significant are:
- the start date of the project, if more advanced preparation is required or if it is better to wait for a specialist with the requisite skills who may not be available immediately,
- the tools and technologies used, if the technology partner presents substantive arguments in favor of changing them;
- the work mode, for example, work done remotely by the service provider’s team,
- service hours if the standard work hours for the customer are different from those proposed by the service provider (a frequent phenomenon in the case of international co-operation),
even if at the beginning such changes were not assumed.
In addition, over the course of the contract, the parties may encounter various potential challenges which they must face in order to continue the project smoothly. I will refer here to examples in terms of body leasing / team leasing cooperation:
- the need to undertake proper onboarding processes,
- challenges in communication,
- the willingness of the person working on the project on the service provider’s side to change the project,
- the likelihood that the person responsible for the project on the service provider’s side may change job.
The client may not have a direct influence on some of these situations, and, if understanding and engagement are demonstrated, it is proof that he or she is willing to engage in a partnership with the service provider.
Win – win
If each party understands that a win-win situation is possible in the outsourcing relationship, and apart from short-term business goals, other values such as loyalty or partnership count, then we may expect that cooperation can be truly long-lasting and fruitful. In such cases, the benefits are evenly distributed, so that both parties are committed to growing them and to the continuation of cooperation for as long as possible. And isn’t that what it’s all about?
New outsourcing project for the medical sector
JCommerce has commenced cooperation in .NET technology with a leading manufacturer of innovative hearing solutions.
The Swiss company is constantly refining its high quality, and therefore decided to accelerate patient handling time and digitalize part of its visits. A patient can do the hearing experience test at home before visiting the clinic, and answer detailed questions in an online questionnaire. All the information gathered can be analyzed by a doctor at the clinic before the patient’s visit.
The solution which JCommerce is developing is intended to significantly improve the work of physicians and the quality of patient care. The new system will make the client’s interaction with the medical service easier and more pleasant.
France – order automation
Logistics processes, especially in large warehouses, might be complicated. The company needs to find the ordered product or products easily, pack it, and deliver everything on time to the buyer.
For the French company Envoi du Net, JCommerce has created a system that automates the order processes in its warehouses. The system collects online orders from different places, and communicates with dedicated devices in the warehouse and multiple external systems to process orders.
The system facilitates warehouse management and speeds up the execution of orders.
Reduce Uncertainty in Business
A safe haven seems to be the idea of a network economy in which companies coexist on the basis of partnerships and mutually interchangeable services. Instead of competing, there would be a gentlemen’s agreement in which each party develops in its specialist field. And specialization is the way to gain unique value, differentiate yourself from others, and also maximize profits and stability in today’s uncertain environment. In a network economy where companies constitute a network of connected vessels, the risk is scattered. But such a model requires one of the most scarce resources – trust.
How to build competitive advantage?
From the point of view of survival on the market, the most important element of the company is its competitive advantage, which is what distinguishes it from other companies in the same industry. Traditionally, it can simply be price, but also prestige, i.e. consumer brand recognition, the high quality of products or services, experience in the industry, or knowledge. A common feature of these elements is their uniqueness, the internal characteristics of a particular organization that enable them to offer products and services of a certain value to the customer, leaving competitors behind. Features such as the ability to offer a lower price than others, but still earn a profit, or to build a reputable brand, are very difficult to copy. And it is on precisely these characteristics that organizational strategy should be based. Consequently, the greatest effort should be invested in developing these unique qualities. If a company “spreads itself too thin” it will be at the expense of investing in key activities.
The solution is the network economy, i.e. an ecosystem of many companies which focus on the development of their unique characteristics, and work together in other areas to develop mutual benefits. What are these benefits?
- reduction of uncertainty – resulting from the sharing and spread of risk. The network of dependency ensures cooperative behavior, rather than competitive;
- access to scarce resources and skills – especially important in knowledge-based industries; companies no longer have to compete with each other for specialists, competences become a service;
- new development opportunities and access to knowledge – thanks to access to the business partner’s knowledge and experience, the company gains a broader view of its situation and the ability to utilize solutions that it would not have considered if left to its own devices;
- increased flexibility – web services are implemented as and when necessary, on demand, without wasting time, which arises in the traditional model due to the need to obtain appropriate resources independently
IT is a highly specific industry. On the one hand, every company, regardless of its area of activity, is forced to use widely understood IT technology. On the other hand, competence in this area is relatively difficult to access. This means that a business may invest in a digital transformation of business strategy, but investment in the development of their own IT team does not often go in step with the abovementioned focus on what the company really does, i.e. its specialization. Should a furniture manufacturer, for example, begin to build extensive IT structures, and hire teams of developers and administrators? The problems in this case are the costs of infrastructure, the high costs of salaries and training required in this industry to keep up to date in the dynamically changing market, and the need for specialized knowledge such as a management team.
No wonder, then, that most companies are looking for a business partner who is in a position to take IT projects on. Companies offering IT services, such as those which specialize in IT technologies, employ professionals who have essential, often niche competencies, and with design, business and industry expertise. Business partnerships can be highly fruitful in this case – as in the previous example of the furniture company working with an IT service provider, which can therefore focus on the most important aspects of business, such as product design, production, marketing, or sales. It draws on the benefits of cutting-edge technology such as optimization of the production process, automation, data analysis, and adapting the product to the client’s needs (e.g. so-called mass customization). The IT partner thus acquires specific design and technology expertise from the client’s industry, thereby gaining an advantage in the market.
IT services which are worth utilizing:
– talent leasing and team leasing – talent leasing, which enables the recruitment of a specialist, especially in situations when such skills are difficult to come by on the labor market, or a whole team of specialists selected for the optimum implementation of a particular IT project.
– IT consulting – due to the fact that information technology is so deeply ingrained in all aspects of the company’s operations, IT services are becoming more and more popular, meaning that companies can obtain information on technology and business opportunities in their area or industry.
– IT Transformation – IT has the potential to introduce revolutionary changes in any company, no matter what kind – whether it be product manufacturing, service providers, commercial firms, financial companies, health care facilities, and so on. Technological transformation should, however, be carried out in a well-thought-out, orderly manner with clearly defined objectives. IT Transformation is an end-to-end service in which a technology partner carries out an in-depth analysis of a company’s processes, presents a plan for their digitization and optimization, and then follows the digital transformation plan of the company step by step.
IT outsourcing Helps Companies Solve their Recruitment Issues
I have prepared a list of the most important benefits of outsourcing, but also – to balance the arguments – a list of risks and threats that we must consider when deciding on such a service. So before I go on to present the benefits that the knowledge and skills of our specialists provide our customers with, let’s pause for a moment to analyze any potential threats. During the process of preparing your own company to use an IT outsourcing service provider, you should consider the risks that may arise during such cooperation. Below is a list of some of the most commonly encountered threats along with possible ways to mitigate them, on both the provider and customer side.
Possible risks that you may want to consider, whether by yourself or together with your chosen provider, may include failure to accept and support part of line management and staff in the assignment of tasks to an outside worker, as well as communication issues or the possibility of knowledge loss. If we are aware of these threats and openly discuss them with the provider, it can go a long way to minimizing or even eliminating them. It is essential, however, to prepare mutual trust, knowledge and planning, as well as continuous monitoring of the effectiveness of outsourced activities.
Get your company ready for outsourcing
Outsourcing on a certain scale, such as when we involve the entire external development team, can become a strategic process which deeply rebuilds the structure of the company and influences the functioning of its processes. For this reason, the decision to delegate certain tasks to the outsourced team must be preceded by sufficient preparation, which consists of the following steps:
- an analysis of the needs and situations requiring the involvement of an external specialist;
- planning cooperation with the provider, requiring the designation of decision-makers who will be responsible for operational contact with the provider, as well as the preparation of appropriate internal communication which will prevent any conflict or misunderstanding of the role of the external specialist;
- planning the process of selecting the right provider;
- planning the introduction process for an external employee or team;
- monitoring the effectiveness of the service and accomplishing the entrusted tasks.
Benefits of outsourcing
So if the service provider is able to guarantee from their side that the risks are minimized and the potential consequences are mitigated, and the client plans the process of introducing outsourcing services adequately, the enterprise will begin to benefit relatively quickly from the involvement of an external specialist or team. A carefully considered and structured process of partnering with the provider and the subsequent deployment of an outsourcer to our project will free up our internal resources or allow our employees to move to other jobs. In addition, the outsourcing model will allow you to experience the following benefits in the short term:
- no recruitment costs – the outsourcing company bears the cost of acquiring an employee in exchange for a later opportunity to make a consistent profit from outsourcing;
- swift access to the required specialists, due to the outsourcing company’s resources and established candidate database;
- contract flexibility – immediate response to the increasing or decreasing need for employees;
- matching the competences to the needs of the project and the possibility of substantive support in the project from the service provider’s side in case of unforeseen situations;
- outsourcing does not increase the fixed costs of your business;
- the invoice received from the outsourcing company can be counted as a project cost;
- no costs associated with vacation and medical leave;
- the possibility of exchanging an employee whose work is unsatisfactory with a notice period agreed with the provider;
- savings in terms of the cost and time spent on searching for and selecting candidates;
- reduction in the risk of selecting an unsuitable candidate;
- no HR and payroll costs.
To outsource, or not to outsource? That is the question…
At this point, it is worth considering when to use outsourced IT staff. Here is a list of these situations:
- a large number of applications are sent to the company, but the effectiveness of the recruitment process is low;
- candidates withdraw from the interview process at an early stage of recruitment;
- we do not have an appropriately recognizable brand as an employer hiring IT specialists;
- we observe constant staff turnover and people frequently leaving a job during the course of the project;
- we need to complete the project in a timely manner and / or to start work on the project within a short timeframe (e.g. up to a week);
- we do not have a sufficient number of tasks to entrust to IT professionals to ensure effective working hours, or our projects are somewhat seasonal in character;
- we would like to build a new team or department in a relatively short space of time.
The outsourcing company will be better than us in terms of carrying out certain recruitment tasks, due to – among other things – consistent and intensive presence on the candidate market, and the brand recognition of the employer. They also provide timely and flexible access to professional resources whenever it is deemed necessary, and not only when suitable professionals can be provided. IT outsourcing is primarily a choice of operational strategy that enables the company to quickly adapt to the business environment, internal requirements and customer expectations.