Saturday, February 18, 2006


Buyers that seek the services of an offshore programmers or developers and other outsourcing services will generally be one of two types: Small Businesses or Medium-to-Large Businesses. As an outsourcing service provider it is important to understand the differences of the these two types so you can conduct business with them more effectively.

Small Business
These can be single-employee home-based based businesses, or companies with a small number of employees, that need specific help in developing a web site, a shopping-cart application, or business management software. Low cost is a primary objective for any development work since most companies of this type are working with limited funds.
The scope of work that small companies might require can be anything from simple code maintenance, optimization, and problem repair to full-scale applications requiring skills in database design, content management, security techniques, and business process implementation.

In many cases, the reason that a company might be considering outsourcing is that the particular skills and experience that are required simply can’t be found locally. It might be a unique programming language, a new development technology, an unusual kind of application, or an international multi-language user interface.

Companies in this category can’t usually afford to have a full-time software or Internet development staff. When they need design and development work to be done, they must outsource that work in the most cost-effective way. A short-term project can’t justify the hiring of new employees to do the work. Obviously, temporary low-cost offshore talent is very attractive to this type of company.

Conducting business with small companies or individuals is often very informal and uncomplicated. There are usually no contracts or formal agreements other than a mutual acceptance of the terms of the customer’s requirements and the developer’s proposal.

Since most small companies will prefer an informal, personal type of relationship with companies they do business with, offshore companies should make sure they quickly assess the kind of business relationship their customers want. Successful offshore companies will learn to do business in the way that their customers want to do business.

Medium-to-Large Business
These are established companies who might have full-time programming and development employees but are lacking in specific skills or resources for short-term jobs. It isn’t cost effective for them to hire a staff to do such work.

“ ISO 9000 is rapidly becoming the most popular quality standard in the world. Thousands of organizations have already adopted this important standard, and many more are in the process of doing so. ” These companies may also be down-sizing their development staffs to reduce costs, and prefer to outsource new development work – or move existing work from in-house to outside resources.

Doing business with large companies can often be more lucrative that with smaller companies, but often at a cost.

Larger companies can be more demanding, more formal, and require more time. There may be legal contracts such as non-disclosure agreements, service-level agreements, right-of-ownership agreements, and work-for-hire agreements.

There can also be project management requirements, reporting schedules, quality verification, testing procedures, and delivery specifications. Some large companies may require proof of ISO 9000 conformance.

Again, offshore companies who want to be successful in working for medium-to-large U.S. companies should attempt to assess the kind of working relationship that each company prefers. This can often be a problem in the middle or late phases of a project when this information was not properly revealed at project start.

Many large companies may assume that offshore developers already understand how they want do business. Unless the developer asks up front, this can lead to serious misunderstandings and even project cancellation. It is best if this information is documented and agreed to before the project begins.
For details read here.

The article is sponsored by A-1 Technology Inc, dealing in offshore website development, offshore outsourcing and offshore software development.