Challenges of international outsourcing

Many tech entrepreneurs face the question of whether to outsource software development to a foreign country. After all, there are good coders in countries like India, Russia and Argentina, while U.S. developers are quite pricey in comparison. But managing a team or project from afar can be quite challenging: communication often gets lost in translation and cultural differences; accountability is diluted across borders; pop-ins are not possible; contracts are harder to enforce; IP issues can come up; and even quality might not be as good as you expected. Here are a couple of simple (but often neglected) steps one can take to minimize risks.

Dealing with international outsourcing

First, make sure you consider firms or developers that have been referred by a client you know and trust. Don’t just pick a developer on Google or let yourself be lured by pretty emails selling outsourcing services. My LinkedIn inbox often gets messages from Indian and Russian developers offering their services. Maybe they are good, who knows, but I wouldn’t risk it. Client referrals are especially important when dealing with international suppliers in general. Ask a lot of questions to the referrer, such as how the developers deal with deadlines, if their English is good, if different time zone was an issue, how they heard about them in the first place, besides of course the quality of the job.

Second, before starting the work, have a face-to-face meeting at least once. Maybe your guy will come to the U.S. for a conference or to visit a client. Or, better yet, catch a cheap red-eye flight and go spend a couple of days with them. Meet the team, check out their office (garage?), go out for lunch, have a vodka (or whatever they drink) together. If the job is at least a five-figure commitment, visiting them is a relatively small investment and it will pay off. Despite Skype and all, in today’s world it is still important to shake hands once in a while, make things more personable. Putting a face to the partnership can help mitigate risks in the future and improve crisis management.

Don’t underestimate the complexities of outsourcing development to a foreign country. Knowing who you are dealing with, both through others and your own contact, is extremely important. An outsourcing job gone bad is hard to fix. Exit costs are high and transferring work to a new team may be difficult, if not impossible. If you don’t outsource with care, as we often say it in Brazil, “what’s supposed to be cheap becomes very expensive”.

See also An idea is Just That – Not Yet An Innovation. Image: blogandretire.com

What’s your experience with software outsource? Leave us a comment!