The Dao of Outsourcing

Building a Chinese software outsourcing company shortlist can be time consuming and tedious.  Fortunately, IAOP and Neo IT publish yearly global services company lists of the top outsourcing providers globally.  This article looks at the Chinese software outsourcing companies listed and the validity of these lists.

Wading through websites developed by Chinese software outsourcing companies who have meticulously placed keywords to rank high in Google becomes tedious quickly.  It is easy to find more than 100 websites of Chinese software outsourcing companies that are generic and do not actually represent the companies core competencies.  As a result, buyers of offshore services often opt for expert option from service provider lists to create their initial shortlists of potential software outsourcing partners in China.  Although these lists are helpful and save time in creating shortlist, buyers should understand the analysts who create the lists do not have the resources to verify the information provided by the outsourcing companies in the application form.  Without being referred to a vendor by a trusted colleague, or hiring an outsourcing consultant to aid in vendor selection, lists provide an inexpensive way to create a shortlist.

The two most respected lists in the global services industry are compiled by IAOP and Neo IT. Both lists include outsourcing companies from around the globe, and are compiled by thought leaders in the outsourcing industry. IAOP ranks the top 100 companies, while Neo IT lists the top service providers without rankings.  Here is how the Chinese outsourcing companies have ranked over the past three years on the two lists.

Read the rest of this entry »

This article discusses how Chinese software developers rank major offshore outsourcing companies as employers by analyzing a popular Chinese website for high tech employees in China.

Of the hundreds of thousands of software developers in China’s high technology parks, a small percentage speak English or have more than five years experience.  As a result, software outsourcing companies compete for experienced English speaking developers as an increasing number of Western companies move software development to China.  For companies planning to offshore software development to China, it is difficult to assess a software outsourcing companies HR capabilities.  Average turnover rates are lower in China than India, but some offshore outsourcing vendors still experience 30%+ annual turnover.  How does a Western company evaluate the employee satisfaction of a potential offshore outsourcing partner in China?

Read the rest of this entry »

This post discusses best practices for evaluating financial stability of an offshore software outsourcing company.  I will focus on evaluation of midsized vendors which are not public.  These  are best practices for choosing vendors, based on my experience with Chinese software outsourcing companies.

There are advantages choosing small or midsized software outsourcing vendors along with increased risk.  One risk which is difficult to evaluate is the financial stability of the vendor.  Outsourcing companies under financial pressure can endanger the buyers offshore initiative if they become interested in clients IP for increasing revenue, change business strategies, or shut down operations.  When selecting an outsourcing company the buyer needs to consider internal and external pressures on the vendor and cross check any information provided during due diligence.  This will save significant time in the long run and increase the likelihood of a successful offshore outsourcing initiative.

Read the rest of this entry »

So, you go and talk to Gartner and they say that after India, China or Mexico are the next best options for software outsourcing. Great, now what? Well before you start contacting vendors, here are 5 things to think about before investing any more of your time, or money in considering China. If you decided to go with China as an offshore software development destination you will come to terms with these 5 eventually, so why not start now.

1. This is China - China is not India, Mexico, Ukraine ….
This statement may seem so obvious that you can’t believe you wasted your time in reading it. However, the number of people who have said, “but it worked when we did it this way in <insert second world country name here>, why didn’t it work in China” would amaze you. Plan time to adjust approaches and strategies (often substantially) for China.

2. Communication will be a problem
No matter what the vendor tells you, how many English teachers are on staff, or if you have native Chinese speakers you have at your company, communication will be a challenge.  Plan for increased ramp up time of the offshore team.  If a key success factor is speed to setup the offshore engagement then China may not be your best option.

Read the rest of this entry »