Author : Nick Krym

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 […]

Ready to Outsource?

Organization outsourcing maturity is one of the most important ingredients for an outsourcing initiative. Attempts to force outsourcing to an organization that is not prepared / not ready for it are likely to fail and chances are with a lot of collateral damage. That is true for any outsourcing initiative, not only for offshore; well, it applies to pretty much any organizational change, but my focus is on specifics of offshore though. What does it mean to have your organization ready for offshore outsourcing? Here is a high-level checklist to consider: Solid justification / objective reasons for outsourcing. Jumping into outsourcing following the lemming instinct […]

It’s Not Over, Till It’s Over

I was fairly certain that an offshore development company with majority of their staff in St. Petersburg, Russia was the best choice for a large scale initiative for my company. The decision came after complex vendor selection process which included on-site visits, marathon interviews, long and pricy MSA negotiations, etc. I hang up the phone after final discussion with the CEO and smiled. I liked the team in Russia, some of the guys I met there were at par with my best developers in-house, I was happy with the location as it was offering a cure for my nostalgia, and I was proud to be […]

Offshore Risk: Cost-reduction expectations

Establishing high cost-reduction expectations is one of the most serious traps a technology leader can get him/herself into. If the only reason you are going offshore is cost savings – my best advice would be – stop right there! If you are very good at utilizing offshore you may realize 30% savings on somewhat sizable initiatives, and you still will need a lot of luck. That’s aside even if you do understand the paradigm of cost savings you still have to establish appropriate expectations with your execs / peers / team. Failure to establish correct expectations results in insufficient budgets, often in a collapse of […]

Top outsourcing risks

Putting development of your product or any other aspect of technology in the hands of a third party is certainly a risky proposition. To properly mitigate the risks of outsourcing one needs to understand the outsourcing landscape quite well. The top offshore outsourcing risks fall in several main categories. There is much to be said about each of the categories; I am planning to add more substance / clarifications /examples to each of the bullets below, as well as some ideas on risk mitigation. For now, here is the high level list: Geopolitical Government regulations, on the both sides of the equation Political stability Legal […]