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What are the advantages and disadvantages of outsourcing?

Pros:You don’t waste your time and resources on the recruitment process.Knowing that there is lack of developers on the market, you can assume how difficult it is to build your own team. You need to reach developers, interview them, verify their skills. Building a team is a hard nut to crack.The team does not need any additional time to get to know each other and start working as a team. To ensure creating high-quality software you need much more than a bunch of talented guys who know how to code. To start working as a real team, they need to get known to each other, learn each others’ strengths and how to complement each other.You can change your demand for human resources during the project.The number of the developers you will need to build your project in a specific time is not linear. You may need 5 people to build MVP, then one to support big-fixes when we verify your MVP on the market, then 5 again to pivot, then two for hot-fixes and small improvements, then 20 to let it scale. When you are outsourcing you product’s development - it’s not a problem at all.Quality. You have to be careful with that one, but if you choose the company you work with wisely, they should assure high quality. Let me explain why. When you hire 6 developers, each of them is responsible for himself. If he fails, you can fire him and replace with someone else. The rest of them stay. But if you hire a team and you’re not satisfied with that team, you don’t replace them one by one - you stop working with this team. So they feel responsible for each other and want you to be satisfied with the product you get. Plus, you should remember that the track record of successful projects is a key to get the new customers and extend the number of contracts - so they simply cannot afford delivering the product of a bad quality.Technology stack. They already have tools and they’ve worked out their development process; the use continuous integration and continuous deployment, automated testing, code quality requirements etc. You don’t have to worry about that and you are weeks ahead at the very beginning.Cons:Quality. As I said before, if you choose the company you work with wisely, the risk of receiving the product of a bad quality is relatively low. Take your time to do the research, ask for the portfolio and references. And remember that the reputation of outsourcing companies depends on their customers’ satisfaction. Also, keep in mind that building your own team is not less risky at all, as you cannot test the performance of your team before they start working.Time-zone difference (communication problems). This may actually be a problem when there is more than 10 hours difference between you and the company you work with. In this situation, having a call will require at least one of you to work after hours. To avoid this situation, try to choose those outsourcing companies that are not more than 8 hours away from where you live.Security. Again, it’s a serious risk that can be avoided. Charles Parks, a partner and outsourcing specialist at Pinsent Masons advices to choose countries within the EU – such as Poland or Hungary – which abide by the same data protection legislation.Language and cultural differences. To be honest, I don’t take this one seriously. After all you don’t sign any agreement right after seeing the offer. You talk to the people you consider to work with and if there is any problem with understanding each other, there are plenty of other service providers to choose. I list it, however, because it’s one of the top arguments brought against the outsourcingI have recently written an article about pros and cons of outsourcing. It is a bit more detailed answer to your questions. I also show there how to mitigate the risk of having the bad outsourcing experience. I hope it will be useful :)

How does one start a back office in India?

Back office is an integral part of operation of any organization. Unlike front office processes that address the core product specific requirements, back office processes are more about managing administrative tasks like accounting and inventory management. With the advent of modern technologies and increased requirements of businesses, back office processes are also paving the way for research. This is why; we are seeing a growing requirement for data mining, data processing, database management and research through surveys.Given the wide range of requirements, it has become harder for companies to manage their back office processes through in-house teams. Hence, companies are looking for vendors that can help them in fulfilling their back office needs. In the current scheme of things, cost-effective back office solutions offered by many companies located in developing countries like India have become quite attractive.Starting Back Office in IndiaIt is easy to setup your back office base in India by taking the help of a back office outsourcing company located in regions like Delhi NCR. Here, you will find several companies that are in the business of performing back office tasks. These companies have built up their reputation by working in the ITES industry for a very long time and hence, they can be trusted for keeping your customers’ information safe.However, it is still advised that you do some research on the kind of business you are trying to outsource and only look for vendors who specialize in the kind of tasks you are outsourcing. Some of the important criterion that you should analyze thoroughly before starting a back office in India is listed below:1. Technology – Not all back office tasks are equal. There are tasks that can be performed by using legacy software like Excel; however, there are many tasks that require access to specialized technologies. For example, if you are in need for data mining outsourcing, a company should have access to Weka or Rapid Miner. Without worthwhile software solutions, the company will struggle to meet the deadlines and your whole outsourcing venture will fall flat on its face.2. Management and Expertise – While it is important to have a good workforce, it is even more important to work with a company that has good leaders. Mostly, management of a company defines the way its operations will be carried out. Always look to employ a company with access to experts and adept managers, so that your projects can be navigated in the right direction even when things are not going too well. You should know that India has a perpetual supply of quality workforce, so the focus should always be on hiring quality managers who can guide and train the employees appropriately.3. Location – As mentioned before, Delhi’s NCR region has some of the best companies with sound infrastructure and hence, it should be your favored destination for a back office venture. Do not just outsource to the cheapest vendor as quality over long-term is essential for holistic growth of your business. Select a back office outsourcing company in Noida or Gurgaon to enhance your business prospects.

How can an early stage startup hire a developer? Ideally, whoever we bring on will not dilute our equity too much. Without giving co-founder status, there is little we can use to incentivize someone to work on a startup with little funding or pay.

First of all, it’s been 4 years already since the question was asked so I hope that the startup which the Author was writing about did take off successfully. Despite, I feel that the question is still worth answering (not necessarily focusing on the specific case that was described), as it may help other early stage startup who are struggling with the similar problems. Let’s get started!The first thing to consider is whether an early stage startup should literally HIRE a developer. Knowing how hard it is to recruit developers in general (too big demand on the market), how hard it is to recruit GOOD, experiences developers and how much does it cost, I would rather suggest looking for some alternative. Here are some ideas:Use Upwork, Guru or some other platforms for freelancers. As you can access the developers from all over the world, you can reach good ones from the areas with the cheaper rates. As long as you need only one or two developers, you should be able to manage this kind of remote “team”. One advice: if you hire more than one developer, make sure that it will be possible for all of you to make calls - if you life in different time zones it can be quite difficult. The biggest time gap should not be longer than 8–9 hours.Outsource. This seems to be a better solution if you expect your project to grow. You won’t have to make a research every single time when you want to start working with more developers. It will be easier to communicate (and to cover time zone gap - as it’s only one gap to consider). Also, the team you choose to work with have a support of project manager, CTO and their senior colleagues from the office (even if themselves, they have a bit lower skills). To find a company to work with, use Clutch, Resiport or other similar platforms - it’s much easier than searching these companies on your own.When choosing the developer to work with (no matter if it’s a freelancer or not), remember to check:Their experience. If they managed to create X prototypes or MVPs for some startups, they will probably manage to build yours as well.Their references. Note that not all of the companies let the outsourcing providers publish their references! So if you don’t see many references on the website or at their Clutch.co profile, don’t hesitate to ask for them.Their technology stack and procedures. It is good when they have automated Continuous Integration and Deployment include Quality Assurance every step of the way, and when they set high code quality requirements.The framework for managing product development. Do they work Agile?Understanding your business needs - because programming is not only about delivering a piece of code.Their communication skills and approach. The simple fact of getting along with the people you are going to work with means a lot. The company you work with should not be afraid to ask you to specify your requirements etc. It’s also very important to know that your team is honest about any problems and delays that may appear during the project.And when getting on a project, focus on:Safety. Make sure what data you are sharing at which phase. Having the control over the access to the complete information and tools during the whole process of production is the key to the effective cooperation.Procedures. Prepare the Service Level Agreement (SLA) and set your requirements, time of the meetings, reports or SCRUM sprints, choose a contact person, define the Request For Changes (RFC) procedure. Doing it at the beginning will provide you with the clear plan to follow.KPIs. Set them at the beginning and use them when evaluating the stage of realization of specific works made by your contractor. This will help you assure the high level of the provided services.SOURCES (worh reading):How to make software: to outsource or not to outsource?How to choose the best outsourcing company for your startupHow to get on a project with an outsourcing companyWhy Poland is one of the best places to outsource your software development5 myths about outsourcing IT in a start-upPrice estimate for web and mobile applications

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