I attended a very interesting event this morning - arranged by Ismael Ghalimi, CEO of Intalio. Apart from being CEO of Intalio, Ismael is also a leading proponent of Office 2.0 and the convergence of SOA/BPM with simple, next generation front-end interfaces like those provided by Office 2.0 applications. Apart from my interest in the BPM space and outsourcing (both of which are my company's commercial offerings), it was the title of the event that tickled me into attending.
Ever since Tom Friedman's book came out, outsourcing has moved out from being discussed in only technology and business circles to being discussed in every social circle. Indeed, the impact of this book is so great, I sometimes call it the best brochureware for the Indian and other offshore outsourcing vendors. The case Friedman makes is both compelling and self evident. And Ismael did a good job of connecting Friedman's postulates with his own anecdotes and show a way for small technology companies to leverage this macro level global shift.
The event was co-sponsored by an outsourcing company called Lohika ("Logic" in Ukrainian) from Ukraine - seemed like an enthusiastic bunch of people and must be doing a great job for Intalio for Ismael to endorse them so publicly. Of course, Lohika gave a good pitch for why Ukraine and their company is a good outsourcing partner to small to mid-size product companies. However, the larger lesson is that all startups and small to mid-size companies need to have a very active outsourcing strategy as an integral part of their business plan if they want to succeed. And as Lohika's VP of Engineering put it very well, it's not just about cost anymore -of course cost is the key driving factor - we wouldn't be talking outsourcing today if it weren't for cost, but lower cost is a given with any offshore outsourcing plan. However, cost is not a determining factor when it comes to your choice of outsourcing partner. The points that Lohika made were:
- Requirement specification process
I may want to add to that and say that the key to finding a good partner is to find one that has a good track record in onboarding (bringing requisite skills on board), training and retention, ability to handle up and down movement in resource levels, and mature processes and quality standards.
On innovation, I must point out that if you are a product development company, hiring an IT services company will not work - you need a partner with a product development mindset. Commercial software products are developed keeping in mind the requirements of hundreds of thousands, if not millions of customers - very different from a custom application development project. The software engineering processes, the innovation mindset, the quality standards are all very different in case of product development outsourcing.
Of course finding such partners is no easy task - I might want to plug for my company here - apart from providing outsourced product development services to our partners, we are first and foremost a product development company ourselves. My company - Newgen Software (www.newgensoft.com) - is the leading provider of BPMS and ECM suites in India and Asia. We have translated our ability to develop and market software products into a winning service for our partners.
Well, running out of time - gotta rush for my post lunch meeting. However I will post some more later - specially on Ismael's points about the open source model and his company's unique approach to sales and marketing. There are some good pointers there for the way these things would be done in the future - but there are also things to be cautious about - it ain't as easy as it seems.