Points to Consider for Outsourcing

Coming from both ends of the spectrum of outsourcing and offshoring for the last 10 years and picking up on the pain points from others in the industry, the following is my collection of things to consider:

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  • Freelancers: Choosing the right freelance talent works best for specific, one-off assignments. However, if you have a large project which requires a lot of collaboration and coordination, you might want to consider getting an entire team from one company rather than gathering several freelancers and form your team. The latter seems to be the more affordable option, but you have to bear in mind that a lot more value can be delivered by the former. A group from a company has established processes, administrative support, centralized invoicing, and other services that may add a bit more to your cost, but also saves you from a lot of headache. The whole is bigger than the sum of the parts, after all.
  • Cheap: You are already saving a lot by going offshore, I believe a 40-50% saving from what you would pay locally is a good expectation. However, once you try to save more by going to the next cheaper group of service providers, you might be looking for trouble. Remember the people you are working with are also in business and they need to make enough money to 1) deliver quality output; and 2) be interested in doing business with you in the long term.
  • Flat World: Knowledge and know-how are more universal today due to the Internet and people working with each other across the world. Its best to be open minded about what the provider can contribute to your project, not only in terms of labor but also insights. Chances are, the outsourcing providers have had other similar or related experiences that can help improve your product concept.
  • Process: Sometimes following a process seems like a waste of time, but in reality it comes back to bite you later – in the form of missed out items and heavy rework. Working without any clear specifications and processes might work fine in a small collocated team, where knowledge sharing is seamless and instantaneous. However, as the team grows and extends beyond your table and physical office, you just can’t live without specifications and processes. Remember that ‘Lean’ and ‘Agile’ concepts talk about doing only the necessary documentation, not ‘no documents at all.’
  • Trust & Transparency: Starting small, knowing the people from outsourcing providers as intimately as your own team members at your office, and building the human connection is critical. It might be natural if you are in the same office working hours on your project –but when you are across the ocean from your outsourcing team, you really need to make a conscious effort to build the relation and trust. Spend some time visiting them at the beginning and during the project.
  • Big Benefit of Small Talk: To make lot of the above items to happen, there is no substitute for small talk. In the office you get to do this by the water cooler, over lunch, or over beer after work hours. With your outsourcing providers, you should try this over social channels like being part of their FB and Linkedin network. Constant Instant Messaging (IM) via Skype, YM, Live Messenger, etc. is a good option, too. When doing IM with the outsourcing team, perhaps keep a window open – this seems to work well for a couple of our teams. It’s like a police blotter where open discussions and knowledge keep happening between all the team members.

Leverage on Technology: Remember there was no outsourcing and offshoring of service before the Internet, technology made it happen. Don’t think its waste of money or time in leveraging as much possible on technology in getting all the above done smoothly and easily. Try an online tool like www.xamun.com to manage your projects, clients and distributed

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Virtual Business, the way ‘creative industry’ will be working: 10 reasons why I am betting on it

I am not one of those who confirms with ‘the way it is‘ paradigm too well, not a ‘rebel without cause’ either or even much of a rebel.  I am comfortable like most people with established ways, but do end up questioning if there is a better way, when I feel something has not caught up with the pace of development.

So, lets focus on the topic for today, Virtual Business. Let me start by defining what do I consider as Virtual Business, ‘If a business uses online means to find, cater, deliver and support its clients, without overly depending on traditional brick & mortar setup of office, full time employees and other facilities, I define them as Virtual Business’. Please note, I am not saying they should not have physical office or employees, but those are not the primary means of delivering value and delight to their customer. Most successful Virtual Business probably would be Amazon, but in this post I would like to focus on Virtual Business that relates to the ‘creative industry’, as defined by wikipedia “The creative industries refers to a range of economic activities which are concerned with the generation or exploitation of knowledge and information.” Which includes everyone from digital artist to architects to software developers and book writers.

The creative industry as I see it is pre-disposed to be virtual. Writers and painters were always working alone in some remote location ever since, however those into software development, architecture, marketing research, advertising, etc., till date have not totally given up the office, employee and other old world ties. This is changing rapidly and I am betting on this industry moving more and more virtual, capitalising on globalisation, internet and technology in general. Below are my list of 10 reasons (not in any particular order) why creative industry will go virtual, and why we are building the first and only integrated tool to conduct your business virtually, check out more at Xamun:

  1. Freedom to work from where you like, when you like. Geography, timezone, and office hours are things of the past. Nowadays, you can work where your heart is – by the beach, with your children at home, on a mountain cabin. When you are working on ‘digital output, why should you be constrained by one physical location to work from?
  2. Economic realities demand lightweight, flexible cost structure to be competitive in the global market today. Full-time employees tied to real-estate and other constraints limits the options of how fast you can scale up or down to handle market opportunities across the world.
  3. Global Talent Pool: there is no monopoly on skill and knowledge, with internet as the great equaliser, its a loss if teams do not leverage on the best talents where ever they are.
  4. Global Market: not only traditional Multinational Companies, but even small to mid-size companies are operating in multiple geographies, when they buy service they don’t limit themselves to the head-office but look across the world for the best deal they can get. With the digital nature of the output, geographic borders do not matter anymore.
  5. Intertwining of various output towards the final product: the expected final outputs from different companies in creative industry are increasingly intertwining. These days, web apps have graphics, 3D, video, gamification all mixed together, and clear division of expertise are not easy to maintain among service providers. Therefore, collaborative efforts among virtual teams coming from various creative firms are necessary to address specific needs of clients.
  6. International Payment online (Paypal): money is the lifeline of any business, and one factor that made it difficult to do cross-border trade a couple of decades ago was the control on the money by different governments. Globalisation has made money exchange much easier in the real world, and new online payment options like Paypal, Google Checkout etc, have even made paying in smaller amounts a reality. This has to be one of the pivotal developments for Virtual Business.
  7. Desegregation of Work-Life: work life balance is perhaps thing of the past. If you choose to work in a profession that you would probably do for free, your intrinsic motivation does not require you to separate your work and life, unlike in the past. With the freedom to choose your workplace and how many hours you want to put in, work and life can be interwoven into a single fabric. Working parents, single parents and the growing number of women in the workforce require the creative industry to think beyond full-time office and work hours, focusing on productivity and output instead.
  8. Mobility of Skill set, international travel & open borders: the fact of the matter is people are travelling more, not just looking for work, but because they want to, and with the lifestyle of freelancing and remote working, you dont have to be on vacation, to travel.
  9. Maturing buyer readiness for freelancers and virtual businesses: few years ago it was much harder to win a project for a freelancer or a virtual company competing against branded firms, but it’s changing rapidly. Personal brands of experts are getting easier to be sold, and more companies across the world are opening up to the idea of buying services from people they have never seen before (or might not see ever). The volume of transaction and rapid growth on sites like oDesk, eLance etc are proof of this.
  10. Technology tools and ecosystems: there are tools like oDesk, Basecamp, online accounting, etc, which Virtual Businesses have been patching up to cater to business growth. Next wave would be of systems that allow a seamless, integrated experience in conducting business online (shameless plug for Xamun), perhaps connecting with some of the tools of your choice. Legal systems globally also are getting better at recognising Intellectual Property rights and ownership, and countries and states have already started structuring themselves to attract Virtual Companies to register with them, removing certain constraints that restricted ‘true virtual companies’.

I can try and add some more, but I think those 10 points would be compelling proof about the growth of virtual business and how creative industry is gearing up to capitalise on it. I believe leveraging on the concepts of Virtual Business, global marketplace and lean startup, more and more knowledge workers from all parts of the world would grow and prosper as entrepreneurs adding value to their customers and their own economy; at xamun we believe we can help them and ourselves by providing tools and support in making virtual business a reality.