outsourcing: managing and hiring u.s. and overseas developers
TRANSCRIPT
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Confidential 2
Outsourcing:Managing and Hiring
U.S. and Overseas Developers
11/2/16
Contact:Ellen RaynorFounder, KeepOnMovin’[email protected](415) 407-5457
AgendaSoftware Developer Supply and Demand (5 min)Introducing Outsourcing & Contract Development (10 min)3 Examples (20 min)• Replacing Existing Resources• Supplementing Existing Resources• New Development
Learnings (20 min)• Preparation for Outsourcing• Identification & Selection Process• Contracts• Working together
Please feel free to ask questions throughout the presentation.
SOFTWARE DEVELOPERSUPPLY & DEMAND
United States Computer Science Bachelors Degrees
SOURCE:http://www.geekwire.com/2014/analysis-examining-computer-science-education-explosion/
SOURCE:http://www.npr.org/sections/money/2014/05/09/310114739/whats-your-major-four-decades-of-college-degrees-in-1-graph
SOURCE:https://www.coursereport.com/reports/2016-coding-bootcamp-market-size-research
Bootcamps
SOURCE: http://evansdata.com/reports/viewRelease.php?reportID=9
2016 Stack Overflow Developer Survey
SOURCE:http://stackoverflow.com/research/developer-survey-2016
International
Note that China, India, Ukraine, etc. do not participate in 35 country OECD
SOURCE:https://www.infoq.com/news/2014/01/IDC-software-developers
U.S./India/China Engineers Comparison
SOURCE: http://issues.org/23-3/wadhwa/
United States Computer Science Trends
SOURCE:http://www.geekwire.com/2014/analysis-examining-computer-science-education-explosion/
OUTSOURCING& CONTRACT DEVELOPMENT
Types of Development ResourcesEmployment Type
Full Time Freelancer Contractor Outsourced
Companies Work for 1 company40 hours/week
Multiple clients at a time, must market & network to find work
Usually 1 at a time Usually 1 at a time
Pay Hourly or Salary Hourly, Submit Invoice to get paid
Hourly Hourly, Monthly, T&M, Fixed Project, Outcome based
Tax Withholding & Reporting
Company responsibility
Worker responsibility, itemize expenses
Worker (1099) or Agency (W2)
Vendor responsibility
Benefits Yes No None or Limited Usually includedSick, Vacation Yes No No Usually includedFacilities/Infrastructure
Company provides Work at home Depends Usually at remote facility (U.S., nearshore, offshore)
Training Company invests Rare Rare Vendor investsUtilization Less than 100% 100% 100% 100%Scalability Hard Medium Medium Easy
United States Gig/Flex/On-Demand Economy
The Business Builders – Primarily driven by the desire to be their own boss, they represent 22 percent of on-demand workers.The Career Freelancers – Happily building a career through independent work; 20 percent.The Side Giggers – Seeking financial stability by supplementing existing income; 26 percent.The Passionistas – Looking for the flexibility to do something they love; 14 percent.The Substituters – Replacing a traditional job that is no longer available; 18 percent.
1990 2015 2020
17%
36%43%
% of U.S. Workforcein On-Demand Economy
SOURCE:http://investors.intuit.com/press-releases/press-release-details/2016/The-Five-Faces-of-the-On-Demand-Economy/default.aspx
Reasons to Outsource/Contract Out
Not Strategic/Core CompetencySpecialized SkillTemporary or Variable NeedTalent ShortageTime to MarketCoverage while gaining TractionMaintenance of Legacy Products(Cost)
Image Credit: http://bit.ly/2i84NRT
SOURCE: http://www.networkworld.com/article/2931822/infrastructure-management/what-outsourcing-engagement-model-is-right-for-you.html
SOURCE: http://www.networkworld.com/article/2931822/infrastructure-management/what-outsourcing-engagement-model-is-right-for-you.html
EXAMPLES
Ex. 1 – Replacing Existing ResourcesPublic Fortune 500 CompanyMature, global, on-premise product line (10 years)Initial Outsourcing 2005, India• Software Engineering, Release Engineering, Localization(L10N), QA,
Documentation, Tech Support• US Based Product Management & Training• Corporate Commitment
Refinements• Brought back some QA, Doc, Tech Support, Sr. Engineers• Switched providers to captive offshore dev and
handpicked team• Added offshore PM• Process improvements (strategy sync, sprint, visits)
Turnover• Captive still requires HR attention• Turnover now is to Startups
Image Credit: http://bit.ly/2jxwWSH
Ex. 2 – Supplementing Existing TeamVenture-Funded Silicon Valley CompanyAdolescent, SaaS product (4 years)Initial Outsourcing 2012, India• Trained QA first• Engineering followed after 3 months• 1 week to set up dev environment• Team lead visit for 1 month, then another next Qtr• Primary & Backup for each product area
Process• Email daily standup• Weekly call• Emphasis on synchronous written communication• Best English may not be Lead or even Project Manager
Learnings• Training key to success• Timezone pros & cons• Complicated features require multiple releases to get it right• Ready availability of specialty resources• Frequent turnover, but knowledge transfer behind the scenes,
and promotion from within team
Ex. 3 – New Development
Bootstrapped StartupInitial Product, SaaS, Consumer, HIPAA, VideoInitial Outsourcing, 2014 Ukraine• Design Project, Fixed Price v1.0• Daily Video Skype
Contract Dev, 2015 SeattleHIPAA Hosting, 2015 MadisonVideo Production, 2015, RenoLearnings• Glossary• Milestone Stagegates• Design Iterations before Coding
LEARNINGSPreparation, Identification & Selection, Contracts, Working Together
Preparation
Local ArchitectScope Definition Define Success MilestonesLong Term Vision
Image Credit: http://bit.ly/2jnNfxg
Selection Process: Partner & Team Members
Partner Selection• Time Zone & Cultural Fit• Partner Size• Ability to Add Value
• Diversity of Skills • Industry Experience
• Synergy with your processes• Ability to Scale• Turnover• Communication Skills• References• Cost• Financial Health
Team Member Selection• CV, Interview, Tech Stack• Get help with personnel
review if necessary• Incentives
Image Credit: http://bit.ly/2id634A
Contracts
Business Terms• Fixed Price
vs. Time & Materials • Specs & Change Orders• Payment Terms• Service Level Agreement (SLA)
Legal Terms• Intellectual Property Ownership• Confidentiality/Non Disclosure Agreement (NDA)• Warranty/Indemnification• No Hire Provisions• Jurisdiction& Dispute Resolution• Reviewed by Competent Attorney• Rigidity of contract with big companies
Image Credit: http://bit.ly/2iYq2or
Working TogetherGlossaryVisitsCollaboration• Daily interactions• Handling the code• Empower as extension of team • Keep communication open
Checkpoints• Wireframes• UI/UX Design• Architecture• Data Design
Employee with responsibility for vendor success• Client side reviews on time• Clear Expectations (what and when)
VendorsCode Fellows, Brook RiggioiTechArt, David DeSantis(Cybage), Raj GhosalNew Leaders, Robert BousquetSoftServe, Michael BechlerTangoSource, Eric Siegfried
LegalAccelerate Legal, David Raynor
CustomersScott ArnettMatt GirvanClayton GrayDaniel RiegelTony ThomsonSkye ThompsonJørgen Vos
Image Credit: http://bit.ly/2iyOEks
05/03/2023 Confidential 29
Discussion
Set GoalsLocal ResourceChoose Right VendorGet Legal Review
Make part of teamGlossaryVisitCommunicate
Ellen [email protected]://www.linkedin.com/in/eraynor/