Author : Nick Krym

Researching Offshore Rates

Questions about offshore rates in different geographies, for different positions and roles come all too often. I covered a few aspects of this subject in my earlier posts, for example Offshore Developer Rates and Negotiating a Fair Rate. One of the points made in these posts was that the rate is just a contributing factor to the bottom line – the Total Cost of Outsourcing. Nevertheless, the rate is important and getting information about what’s fair for a specific position, geography, region, etc. could be extremely valuable, especially during the initial stage of the vendor selection. Getting ballpark figures for the rates is very simple; […]

Offshore Payment Models

Needless to say that payments and payment models are some of the most important aspects of an outsourcing contract. While these items typically well understood and relate well to similar terms in any other consulting contracts they still require extreme attention and caution especially considering caveats off the offshore outsourcing. The payment models in offshore contracts derived from the underlying contact execution models with most popular being Time & Material and Fixed Bid, see Offshore Model Selection: T&M vs. Fixed Bid. Time & Material model typically translates to a payment per hour model. The rates / payment approach could be defined at a coarser granularity […]

Offshore Model Selection: T&M vs. Fixed Bid

It’s quite amusing to see many offshore vendors to use LinkedIn Answers for self-promotion but instead of leads generating volumes of offshore-bashing. However amid of self-advertising and political positions you can find browsing this section helpful in many aspects, no cloud without a silver lining I guess… This time LinkedIn Answers offered an interesting discussion topic with a help from Irina Semenova: When outsourcing projects offshore which model is preferable – Time and Materials or Fixed Bid? And my answer is… “It depends.” What model is going to work for your specific engagement depends on the project goals & objectives, both parties’ org structure and […]

Using Contracts to Mitigate Offshore Risks

MSA – a “horizontal” component of an offshore contract can become a powerful tool in managing an offshore engagement and mitigating its risks. My approach to turning MSA in such tool includes several main steps: 1. Identify specific risks associated with the engagement. See my earlier post Top outsourcing risks as an example. 2. Rank the risks and select top ones; limit the selection to 5-10 items. The reason I recommend limiting the list is the cost / length of negotiation process. 3. Find out the reasons the risk mitigation is not in place / insufficient. You need to understand why this presents the problem […]

Offshore Contracts Basics

In general the language you put in contracts will not change the nature of the business, will not counter the Fundamental Laws of Outsourcing, and won’t prevent things going south. Yet it is impossible to overstate the importance of a well-written contract. The goal is to develop the contract in a way that it encourages / enforces desired behaviors and provides a framework for dealing with issues, complications, and disputes. That applies to both parties – the contract has to work for you and your vendor, in that light, considering the nature of the engagement, nothing is as important when developing a contract as keeping […]