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Best Practices for Outsourcing

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Content provided by Calavista and Sloan Foster. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Calavista and Sloan Foster or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://player.fm/legal.

Globalization continues to open up opportunities for organizations to increase efficiency and drive productivity by executing projects remotely and working with geographically distributed teams. This is no more apparent in any part of the business than in the area of Information Technology (IT). Information technology groups are consistently executing projects in multiple geographical locations, both within the organization and externally with vendors and partners around the world.

Full Podcast Transcript:

Sloan Foster: 00:32
Hello and welcome to Calavista Conversations! Today we have experts at outsourcing Russ Finny, principal ITMWeb, and Lawrence managing partner of Calavista. Russ Finny is an advisory partner in research, and are currently serving clients through both the ITMWeb Group and the Stratamation Network. He also assists startup communities all over the world through various entrepreneur programs at the Tech Ranch. He's a former CIO, and in 2016 Russ was named by the Apollo Research as one of the top-five most highly followed US CIO Influencers through social media. He can be found @RussFinney on Twitter. He began his career working with Ernst and Young. Lawrence graduated from MIT with degrees in Aerospace and Astronautical Engineering and Humanities before spending seven years as a US Navy carrier pilot. After leaving the Navy, he returned to graduate school earning his Master's degree in Computer Science from Stanford University. Prior to Calavista, Lawrence spent seven years at Trilogy Software working with various enterprise software companies and development and consulting roles ranging from individual contributor to VP of Engineering. Lawrence and his business partner Sandeep Gupta created Calavista in 2001 as a bootstrap company out of a shared vision in helping companies improve the quality of their software delivery and have been doing so for the past 16 years. Welcome to the show, Russ, and Lawrence. So I thought today we'd start with the state of outsourcing. A lot of companies are looking to outsource as a solution. So where are we, where have we been and where are we going?

Lawrence Waugh: 02:08
Great question. When we started Calavista 16 years ago, outsourcing was, I'm not going to say it was new, but it was not ubiquitous in the way that it is now. Often we had to convince our customers that outsourcing was something that was actually even a viable alternative for them as opposed to something that they just kind of had to do. I think we've come to a much more mature place in the industry where people see outsourcing is really practical matter and it's a business decision as opposed to a sort of a "bet the company decision".

Russ Finney: 02:38
I agree. Sloan, we did some research and I'm going to talk a little bit from some research that we did about three years ago. And in that research, we were looking across a wide variety of companies. We had 500 that participated in the research project and some of the participants were very large companies. One of the largest automakers, one of the largest food and beverage providers, several big technology firms, and also healthcare. And out of that group, we surveyed 500 and then we did deep dives in 20 of those companies and primarily we were looking at- What are you doing around outsourcing best practices? In conjunction with that, how about virtual teams and optimizing virtual team experiences so that we could create a guideline for companies that are thinking about doing outsourcing. What are the lessons learned from these organizations that have embraced it? And then especially if you're working with people that are not within the four walls of your building, they're out there potentially on the other side of the planet, what are the best practices and making that work function and be optimized to take advantage of it. So I'll talk a little bit with you as we go along here and let you know what some of the things that we found during that study.

Sloan Foster: 04:12
Excellent. So where are we now? Do they outsource? Do they not outsourced?

Russ Finney: 04:15
Well, I agree with Lawrence, I don't want to repeat too much of what he just said. I think it's a very commonly accepted in today's businesses to work with partners. The big enabler of that really has been the technology that we've built over the last 20 years, right? So we didn't have the ability to work with a team that was sitting in Bangalore, India without video conferencing and good internet connectivity and the ability to share our coding and also be able to collaborate in good tools. All that exists today. All that is an enabler for us to be able to work together, almost like we're in the same building. So I think that's been the key. But following up on that, I'm doing the best practices around those tools and technologies and it's still a human endeavor, right? So the way that you project manage it has challenges, right? So the way that you project management project manage that, the way that you interact, the way that you plan, it's got to be carefully thought out to be successful.

Lawrence Waugh: 05:28
I think that we've gone from, there are a couple of things that could be outsourced. Perhaps you know, your payroll, you know, back in the 80's, that was a big thing as well. "We have a company doing our payroll, we're not doing it ourselves." To now there are very few things that companies will not consider outsourcing, all the way to what was once considered purely creative content in terms of marketing, or a strategy and things like that where people are actually willing to accept the fact that there may be people who do this for a living who are really expert at that one thing. And those are the people you want to get doing that thing for you.

Sloan Foster: 06:04
So what would be some circumstances where outsourcing, and you just named a few where today, if someone is looking at outsourcing, where do you think they should look and assess? What would be the best thing to outsource?

Lawrence Waugh: 06:15
Well, it kind of goes through, there's a lot of reasons to outsource. One is if you have a skills gap. That is, and we'll just, you know, I could talk about software development, but let's look at payroll. So you know, if you have to hire someone, you can go to jail if you get your taxes wrong. So you want to get that right. And so you either hire someone who has spent a lot of time getting it right, or you outsource that to a group of people who have spent a lot of time getting that right. So if there are things that are very important to you to get right, and that's certainly something to talent source if you are not sure that you have that skill set easily available in-house. Other reasons of course, or to save money or to distribute risk or other things like that. So there are all sorts of different reasons outsource that apply to different areas of your business.

Russ Finney: 07:01
So, Sloan, I'm going to talk a little bit in the context of IT departments because most of our study focused on the IT function in these companies. Across not only the technology side of it, but also the application development side and where they were utilizing service providers that may have been in their own city. But again, that could be nearshore or offshore and so we did ask this question- "where are you employing outsourced resources?" And for now, let me just talk about the systems development life cycle. So if you think about that upfront on the planning and the analysis side of it, it's very tough for an outsource group to have the insight to be able to do the planning and analysis. It's generally those companies were using there inside the house resources or if there are product developers. Like right now we're seeing them agilize and were surrounded by product developers here in Austin, Texas. Same thing. They've got to be able to think through design and architect, whatever it is that they're going to build. So that tended to be a small percentage. So maybe 14 to 22 percent actually would use an outsource resource for something like that. The wide majority were using their own resources. As it got more into a design, it jumped up to about a third would you use some sort of an outsource resource to help. But then in the building and testing, uh, that's when it got really heavy with the companies that we were surveying. So eighty-six percent now, not across every single project, but eighty-six percent said that they would use outsource resources for building something. So coding, working in a framework, a configuring and then with testing that dropped down just a little bit, 75 percent. [It] drops way down and deployment, but then it goes way back up to 70 percent on maintenance.

Lawrence Waugh: 09:08
I think that one of the things that are most commonly seen as a benefit is the ability to leverage expertise that's difficult to find. So for instance, we had a prospect approach us about they wanted to migrate their applications off to Microsoft's Azure Cloud and weren't really sure how to go about starting to do that. What we've done that before. And there were some pitfalls, so we were able to sit down with them in a formal setting and go through, you know, a dozen or more managed services that the Cloud provides. And say, "All right, so here's the problems that we've run into when we do this. You think that this is going to work this way, but it's not. You need to make sure that you've done this." These are things that you only learn by experience. And so a good example is that sort of thing where a company either has to hire someone who has done this before or several people who've done these things before. And in the case, a dozen or two dozen managed services has done all of them or you know, 3-4 people who together have done this or you go find a provider who collectively has done that and can advise you. Again, the same way you hire a tax professional because they've done so many tax returns. They know the answer to the questions that are difficult to find. So very often one of the best things to outsources is something that is complicated but not necessarily core to your business. That is whether my data [that] lives in Azure or lives in AWS or lives on my server may not be fundamentally important to my business as a whole. In other words, it's not what my business is maybe an accounting firm or in this case, it's a bank. They don't really care about the software technology. They just want it to support them.

Sloan Foster: 10:49
So to that point, what are some overall best practices for getting the most from your external team, especially around agile processes?

Russ Finney: 10:58
Good question. So we uncovered about 10 factors and I'm not going to go through all 10 right now, but as we go through the conversation, we'll probably find our way through those. But a couple of things really stood out and we created a diagram which is a framework of this best practice for doing outsourcing and also doing virtual teams and being successful in virtual teams.

Sloan Foster: 11:24
Can that be found on your Twitter feed?

Russ Finney: 11:26
It can be found on my Twitter feed @RFinney. You'll find that diagram. But it's the real foundational at the top and the bottom of the diagram, two key components. One was what you choose to apply outsourcing resources to is very important. So the projects that you choose, the locations and also the aptitudes of the team-internal and external on being able to do this in a virtual outsource way. So not every single system, project, infrastructure, or even managed service will work well in an outsourced setting. So really trying to work your way through to find the ones that feels like it's going to be a fit. So that was number one from the companies that we talked with. You've really got to be selective on what you're going to apply this to. Make sure the teams that are gonna participate have an aptitude and a willingness to be working in that mode. I'll stop there for a minute if you have a comment.

Lawrence Waugh: 12:38
Yeah. So, you know, deciding what areas outsource from my point of view, it's- what do you need help with the most? There are ways to, outsource. Most of the things that you're going to want to consider outsourcing, it's, I do agree that sometimes, you need to make sure that the team, well, no, always, you need to make sure that the team you've chosen as appropriate. And the way you do that in my experience is you actually treat them like you treat any other employee. You should not think, "oh well, you know, I'm going to um, go outsource. So let me just go online and find the cheapest one or the closest one or the one that who's name I liked the most." You wouldn't do that when you're hiring an employee, and this is arguably you're hiring a bunch of employees.

Lawrence Waugh: 13:21
So you want to make sure that you're kind of doing your due diligence. For Calavista, we actually don't work with individuals. We only work with entities, so organizations that we have worked with in most cases, for over a decade now. So when we go bring on a new partner company to work with us, we'll spend a ton of time and that will go. We'll fly to whatever country they're in, whether it's an eastern Europe or South America or wherever. And we'll spend time with them. We'll look at their development processes, we'll meet their people, we'll interview people and on any project we'll interview those people pretty heavily. That is through resume screens and face to face via video conference to really make sure that there are people that we would want on our project just like you would do with an employee.

Lawrence Waugh: 14:01
So I think that one mistake that people make is thinking that hiring an outsourced (well in my case, you know, development group) might be like hiring someone to cut my lawn, which is, it doesn't really matter as long as they sort of know what they're doing, it'll be OK. And that's, that's not really the case. You need to have an organization who is not only very competent and more competent in arguably then you might need for a local hire because they're not going to be local. So they have to sort of step it up a little bit more. But not only do they have to be competent, but they have to fit in with the organization structure and they have to be able to work well in your environment.

Russ Finney: 14:34
That kind of leads into number two of best practices that we uncovered in. It's exactly what Lawrence is saying. The way that they expressed it, is about building trusted relationships. So it's not just utilizing resources based on resumes. Of course, you want to qualify who you're working with. I think it's also a best practice to try to if you've got somebody who's really uncovering and understanding of your business in depth, you want to incentivize them to stick around and stay your partner and also make sure that their resources are a hanging in there with your projects as well. So the continuity's important, but that all goes into the building the trusted relationship. And that's a year by year thing. You know, in the beginning, it starts out as a week by week thing. But for most of the companies that were in our study, they have a long relationship with these providers.

Speaker 3: 15:31
I don't want to really jump. I'm sure there's going to be a question about this later, but people talk about the pitfalls of outsourcing and "Oh, isn't there a high churn?" and things like that. And the answer that is no. Well, there can be, but you know what, what I always say is "if you hire someone and you treat them like fodder and you pay them poorly and you give him crappy things to work on, well your employees are going to quit." And if you do that with an outsource team, if you say, "well good, I've got a bunch of bodies here, I'm going to give them all this grunt work and I'm going to pay them poorly. I'm gonna expect them to be working, answering my phone calls and my text messages whenever I feel like reaching out to them."

Lawrence Waugh: 16:07
Yeah, they're going to get tired and they're going to leave. On the other hand, you feed people interesting work. You make them part of your team. You respect their opinions. You let them know that they're valued and by the way, you work with an organization that pays them fairly. They'll stay for years. We've had people on projects for well over five or six years. It's like an essay Humphreys wrote once about how developers don't quit, you drive them away. Once the developers happy at your organization, they will suffer through a lot to stay with you. And so same thing is true for outsourcing. Outsourcing can be an incredibly stable workforce if you do it right.

Russ Finney: 16:43
I want to make one other comment on this one before we move off Sloan. I know I know we've got a lot to cover here, but I think another little secret ingredient little magic formula is having an opportunity for face to face. Even if you're working with somebody halfway across the planet, getting one or two of their resources to come and in with your team for a little while or having the same happen in the other direction too where people have met each other. Maybe they've had lunch or dinner together. They've had some socialization. It makes it a lot easier than when you're working on the phone or through that video link when you have that relationship built.

Russ Finney: 17:34
People are empathetic to all the challenges that are in front of them when they've been through that.

Lawrence Waugh: 17:41
Yeah, you gotta do that. And Russ is absolutely right. We do that on almost every single project where we either bring most of the team over or all the team over and all of our Managers and Architects typically travel once or twice a year to go see the teams they work with. Because it's incredibly important to build that relationship. Again, you know, the whole thing is you don't want people to feel like cannon fodder. You want them to feel like a valued member of the team and the best way to do that is to make them a valued member of the team and respect their opinion and, and let them know that you care about them and want to want to face to face with them. And so that's a huge part of it.

Sloan Foster: 18:15
And take time to develop the relationship and feel a part of the relationship. So you've answered a couple of my next questions, so I'm gonna jump ahead. How do you validate a candidates firm, background, and credentials? You said video, you said, you know, kind of embedded with the team. Are there some other things that you do to make sure that before you get to that point they're who you want to work with and you validated them?

Lawrence Waugh: 18:38
There are a couple of things that we do. And I said before we only work with organizations, for a couple of reasons. One is it's kind of easier to check on an organization's reputation that is to check in individuals. I think I've told this story but I'll bore you with it. I think it's kind of illustrative of the one of the reasons we only work with organizations is you just don't know who an individual is. And so one case we had a customer we're working for and they brought in their own UI (User Interface) designer and the guy was in Romania and he was good. He did good work and we liked him. And that was fine until a week before the deliverable, we were making last-minute changes and you suddenly disappeared. He just dropped off the grid. No one could reach them. And of course, he's in Romania. So what are you going to do? You can't drive by his house? So you can text him and call them and email them and you know, who knows where the guy lives, he's just a name on it. So I'm at this point it was a sort of ubiquitous video conferencing, so we hadn't even seen the guy. But anyway, so he dropped off and we finally, Calavista had to hire someone locally to kind of finish his work so we get the thing out the door. That was painful and costly for the customer. And again, he was their guy so it wasn't, you know, there's only so much we can do. But anyway, week after the project went live, he showed back up suddenly like, "Hey, sorry how are things going?" you know, we're like, "where the hell did you go?" Well, so the answer was, "well, um, yeah, I was grounded, my mom took my computer away", and as it turns, as it turns out it was in high school and you're making good money for a high-school kid. But the point is you just don't know, so we work with organizations because it means that first of all, you know who they are. There's a record, you can go visit them, there's a recourse if they do something wrong or they violate they've breached their agreement. It's much, much easier to hold an organization accountable for IP protection, for instance, than it is to hold an individual. An organization is much more to lose if they let people kind of play fast and loose. And so that really helps. So when you're, again, trying to figure out who the people are to work with, you have to trust the first and you do that by reputation. Do that by visiting. Did you do that by meeting with Architects and Engineers and talking about, are we in sync on how we deliver software? And then once you like the organization, then you start meeting the individuals and see who would we work with and you know, and, and just meet as many of them as you can and realize, yeah, this is kind of a kindred organization and there are a lot of organizations that aren't you and OK, they're, you know, they're not stupid or anything like that. There are their methodologies and their work style is just not compatible with us.

Russ Finney: 21:16
So I might just add another point on what Lawrence just talked about and what we found as far as companies depending on the size and the sophistication, the company that was utilizing the resources. If it was a very small company, let's say, to start up and they have a very limited amount of money in their seed capital to build something and they may use some resources that are located in another country because the dollars are going to go so much further to utilize those resources. And they may not have a legal entity in the US. So they're just doing something via email in a foreign country and the wiring money to them. And getting the code back, right? It's very difficult to enforce the agreement in that situation. But a small startup company may take the risk, but a large firm, at least the ones that we were working with on this study, they wouldn't do that. So there has to be a legal entity established in the US and when they do their contract between the outsourcing firm and the company, it's a large automobile manufacturer that legal agreements going to be a US entity to entity us entity that entity agreement with some kind of a jurisdictional definition either in a certain state or county or whatever to resolve disputes.

Lawrence Waugh: 22:44
Sure. And that's one of the reasons actually customers use Calavista is because we are local US company and in many cases local to them, but we have resources all over the world via our partnership companies. It gives them a local, US-based, full weight of US law on our shoulders, a throat to choke. And that works really well for a lot of companies rather than just finding one themselves offshore. Because again, if you're not going to go out there and visit them and spend time, well it's a lot easier to do that with a US-based company.

Sloan Foster: 23:11
It kind of goes to my next question, about certain steps which should be taken to protect internal IP. It sounds like working with a legal entity, the legal entity to a US-based legal entity at least helps alleviate some of that. What are some other things that you would put in place, or have put in place to help protect your internal intellectual property when you're outsourcing?

Lawrence Waugh: 23:30
Well, I think that the first thing is IP is really a hot-button and people will say often "well the problem with outsourcing is it's hard to control your IP." Or "how do you protect your IP?" I don't mean to be the doomsayer, but I have to say the fact that you hire your own employees doesn't mean your IP is protected. It is really easy because it tastes a keystroke to send your entire code base to someone whom you don't want to see it. And it can be done just as easily from a desk inside your office most of the time as it can be done from someplace else. Right? So, so people delude themselves into thinking, "oh, because it's all US-based my IP is somehow safe." It's all about the people you work with.

Lawrence Waugh: 24:12
If you have people who want to steal your IP and they have access to it, well they can steal it. And so again, it comes back to reputation and it comes back to having a lever... Again, if you have one person in Romania, or you have one person who's far away, and they do something they shouldn't do with your IP. What are you gonna do? I mean, who in Romania do call to go try and put a stop to that? Well, if you're working with a 3000 person company in Romania or Slovakia or you know, wherever, wherever the company is, well, there is a much, much better chance that you can get them to cure your problem. And so the first thing to do for IP protection is to realize that the risk is not the fact that you're outsourcing, the risk is the technology you're using to actually manage you're coding, your IP. Then it is worth choosing who you work with carefully and investing the amount of time it's going to require to make sure you're working with people who are going to respect your IP. There are companies and countries that Calavista will not work with because we have seen, not through our experience, but through other companies experience, an inability to protect IP that in those cases.

Lawrence Waugh: 25:27
So basically know who you're dealing with, making sure that the entity is large enough that you can have an impact on them and they'll care. And then, um, reputation.

Russ Finney: 25:41
Just a couple of additional points on that one- It's really important. So I work with a lot of defense contractors, aerospace firms, they're very sensitive about designs and they're also sensitive about code, right? And in many ways, we're solving this problem through all the Cloud services that are coming up. Especially the high reputation, you know, big Cloud providers that we all know and that were somewhat taken advantage of even more every year. But what I've seen at the companies that really have high sensitivity about this, is not only the employee awareness that Lawrence was talking about, but also having the products in place, the repositories in place that have good access control, good audibility, making sure that depending on how sensitive things are that only need to know or need to see or need to touch. Right. And then when people are doing that and being able to trace through who was doing that or when did it happen. So that if a breach occurs or if you find your IP showing up somewhere else where it's not supposed to be, that you can actually build a trail back to determine how that occurred. And then you've got a better case to go get a resolution through whatever method you use.

Lawrence Waugh: 27:05
Yeah. And that really comes down to tools and processes. Like at Calavista when we work with a customer, we will internally provide them with their own IT sub-net and so, you know, Calavista may be working on a project, and because I'm on that project, I am on this subnet, I can't get to work from other companies, I just, I can't. And nor can any contractor from one project to see it and when we do that, so there are also tools in place, but the point is we even take it down to the hardware level to try and make it so that we are really aware of who has access to what and when and make it really easy to turn people off when they leave the project. It takes a little bit of discipline, but that's, there's no substitute for that.

Sloan Foster: 27:51
Well that actually answered one of my next questions which were creating a common development platform or for co-development, but you've answered that. So moving with that, so quite ahead of the curve here. So moving right along, are there any current security setups or audits which should be considered when you're outsourcing? You mentioned access control, you mentioned some other things. Are there any other best practices is perhaps part of that 10 that you mentioned that can help with security and really walking down that particular environment?

Russ Finney: 28:22
Well, talking about system development kind of things, really the best practices are going towards the outsourcer comes to you and you control the environment they're working in. That's really the state of the art best practice. But you still see companies where they'll do a mirroring of the source code and a mirroring into the system into their systems. But none of that reaches production without going through some kind of a quality check as it comes back. So I'd say that's the two probably most common that I see these days. I don't see it as much where they have full control over the whole environment or where they have the environment in their own country. It kind of depends on the company in this situation.

Lawrence Waugh: 29:11
And there are numerous certifications you can try to get, this isn't really the place for all of that. But we also do that exact thing where we basically provide a lot of stuff has done in the cloud nowadays and so it's really easy to have people, you know, from around the world accessing repository in the Cloud. What we'll do is actually set the Cloud up so it can only be accessed from Calavista and then require everyone to tunnel through Calavista on their way. And that way we know who's doing it, and when someone's not on the project we'll click their VPN is off and they can't get to the repository anymore. We don't have to go around and say, "oh well, you know, there are 18 servers in the cloud doing different things and let's go to each one and change the access list to this person." You want to make that as manageable as possible and as streamlined as possible.

Sloan Foster: 30:00
So wrapping up here, is there anything that you would suggest. You've mentioned some best practices, kind of one last parting thought about outsourcing and the value of it or things to be aware of when you're doing it.

Russ Finney: 30:14
Well. One other one would have a cadence of contact with your provider. So it could be a weekly meeting or daily meeting. It depends on what the project requires or what kind of services they're providing. But I think a good touchpoint cadence, and I know some companies like to have a, there are resources out there in a messaging, it could be a Microsoft messaging tool or any of the messaging tools that are out there. To where they actually see their online or they're not online or, or they're listening or they're not listening so they have a better feel for are the people that I don't actually see, are they really tuned in to what we're doing. So a little bit of cadence. I also think video helps a lot. So of the tools that are out there today, there's so many. Starting with Skype and then go into all kinds of different toolsets and Webex and Zoom and everything else. If you're able to do that. It gives you more confidence. Some cultures don't like to be as blunt as Americans are, you know, and expressing opinions. They're doing it non-verbally [through their] expressions and it really helps to be able to see the faces, especially in certain countries of the world where they're not agreeing. You're not seeing it, but they are definitely not agreeing. And I can see it.

Lawrence Waugh: 31:41
Russ is absolutely right. There is no substitute for video conference. We're really big on that. But not only just, "oh, there's a video conference" because we've had this where there's in the conference room a video camera, and so you see six people sitting around the table. That doesn't work. That's not enough. You can't see the micro-expressions, that flutter of doubt that crosses someone's face when you want them to do. You miss it because you just see this room of people who are kind of staring up at some point in the distance, which is the camera. You've got to be able to see their faces and it's gotta be clear. So that's basically HD and a camera, Webcam or whatever that is focused on their face. And so whatever technology you use from our point of view, Calavista's point of view, that's what it has to be. Otherwise, you're just kind of checking the block and not actually getting much out of it.

Russ Finney: 32:28
Well, I was just going to add... Also being a little bit balanced in a timezone so it doesn't always have to be in timezone and they are working in the middle of the night. I mean occasionally go ahead and stay late and that way they're working during the business day. So a little bit of those trade-offs helps a lot in morale on both sides.

Lawrence Waugh: 32:52
And that's sort of treating them like fodder thing. If you know, they've got lives, and you want to respect their lives, and you want them to be happy to come to work. And not see it as a death march. But I will say I have a blog about the top 10 ways to make your outsourcing project fail and the first way and the on the list is to not start.

Lawrence Waugh: 33:21
I find that a lot of people treat outsourcing as, you know, it's kind of when you are, you hire the cleaning company or you want to hire a cleaning company for your house. But first you have to clean your house because it's like, you know, you've got to kind of get things under control before you can hire somebody. And really what you should do is hire someone to come in and get your house under control. So people will say to us all the time, "oh, I really want to outsource this project but we're not ready. We need to like kind of get all of our ducks in a row." And what they don't realize is that there are companies, and you know, of course, Calavista is one of them, but we're certainly not the only one their companies that can help you get your ducks in a row.

Lawrence Waugh: 33:52
And so for instance, if you need to put down on paper the requirements for this project, well, again, there are people who do that for a living, that is what they do. They do software requirements and there are companies that are software development companies or even just companies that just do requirements that can do that for you. So if you can find a company that can provide you sort of the turnkey service of we will show up, become part of your team and help you get those requirements on paper and then help you put together a strategy for how to deploy them. And how much of that, if any, you want to outsource. And then what that's gonna look like. You can actually get a lot further than you'll think without being as ready as you would think you have to be. So I think what I'm trying to say is you actually, you know, for those of you out there who are thinking, "oh yeah, outsourcing sounds great, but we're not in a place to do that." You might be, you just need to pick the right partner who can help you get from where you are to where you want to be.

Sloan Foster: 34:43
So as far as more information, Russ, I know you mentioned you have this wonderful document you're using to talk about the research that can be found at...

Russ Finney: 34:51
I'll put a link out there on Twitter @Rfinney. I'll put a link to the report that I'm referencing and it's about 16 pages or so and it's full of best practices around what Lawrence and I are talking about. And this is mainly a discovered from these 500 companies, just what they, what their insights were on doing that.

Sloan Foster: 35:18
I will also post a link on the Calavista blog. It's www.calavista.com. And you can also follow Calavista on Twitter @Calavista. So thank you all for listening and look forward to having you tune in next time for Calavista Conversations! Thank you, Russ. Thank you, Lawrence.

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Globalization continues to open up opportunities for organizations to increase efficiency and drive productivity by executing projects remotely and working with geographically distributed teams. This is no more apparent in any part of the business than in the area of Information Technology (IT). Information technology groups are consistently executing projects in multiple geographical locations, both within the organization and externally with vendors and partners around the world.

Full Podcast Transcript:

Sloan Foster: 00:32
Hello and welcome to Calavista Conversations! Today we have experts at outsourcing Russ Finny, principal ITMWeb, and Lawrence managing partner of Calavista. Russ Finny is an advisory partner in research, and are currently serving clients through both the ITMWeb Group and the Stratamation Network. He also assists startup communities all over the world through various entrepreneur programs at the Tech Ranch. He's a former CIO, and in 2016 Russ was named by the Apollo Research as one of the top-five most highly followed US CIO Influencers through social media. He can be found @RussFinney on Twitter. He began his career working with Ernst and Young. Lawrence graduated from MIT with degrees in Aerospace and Astronautical Engineering and Humanities before spending seven years as a US Navy carrier pilot. After leaving the Navy, he returned to graduate school earning his Master's degree in Computer Science from Stanford University. Prior to Calavista, Lawrence spent seven years at Trilogy Software working with various enterprise software companies and development and consulting roles ranging from individual contributor to VP of Engineering. Lawrence and his business partner Sandeep Gupta created Calavista in 2001 as a bootstrap company out of a shared vision in helping companies improve the quality of their software delivery and have been doing so for the past 16 years. Welcome to the show, Russ, and Lawrence. So I thought today we'd start with the state of outsourcing. A lot of companies are looking to outsource as a solution. So where are we, where have we been and where are we going?

Lawrence Waugh: 02:08
Great question. When we started Calavista 16 years ago, outsourcing was, I'm not going to say it was new, but it was not ubiquitous in the way that it is now. Often we had to convince our customers that outsourcing was something that was actually even a viable alternative for them as opposed to something that they just kind of had to do. I think we've come to a much more mature place in the industry where people see outsourcing is really practical matter and it's a business decision as opposed to a sort of a "bet the company decision".

Russ Finney: 02:38
I agree. Sloan, we did some research and I'm going to talk a little bit from some research that we did about three years ago. And in that research, we were looking across a wide variety of companies. We had 500 that participated in the research project and some of the participants were very large companies. One of the largest automakers, one of the largest food and beverage providers, several big technology firms, and also healthcare. And out of that group, we surveyed 500 and then we did deep dives in 20 of those companies and primarily we were looking at- What are you doing around outsourcing best practices? In conjunction with that, how about virtual teams and optimizing virtual team experiences so that we could create a guideline for companies that are thinking about doing outsourcing. What are the lessons learned from these organizations that have embraced it? And then especially if you're working with people that are not within the four walls of your building, they're out there potentially on the other side of the planet, what are the best practices and making that work function and be optimized to take advantage of it. So I'll talk a little bit with you as we go along here and let you know what some of the things that we found during that study.

Sloan Foster: 04:12
Excellent. So where are we now? Do they outsource? Do they not outsourced?

Russ Finney: 04:15
Well, I agree with Lawrence, I don't want to repeat too much of what he just said. I think it's a very commonly accepted in today's businesses to work with partners. The big enabler of that really has been the technology that we've built over the last 20 years, right? So we didn't have the ability to work with a team that was sitting in Bangalore, India without video conferencing and good internet connectivity and the ability to share our coding and also be able to collaborate in good tools. All that exists today. All that is an enabler for us to be able to work together, almost like we're in the same building. So I think that's been the key. But following up on that, I'm doing the best practices around those tools and technologies and it's still a human endeavor, right? So the way that you project manage it has challenges, right? So the way that you project management project manage that, the way that you interact, the way that you plan, it's got to be carefully thought out to be successful.

Lawrence Waugh: 05:28
I think that we've gone from, there are a couple of things that could be outsourced. Perhaps you know, your payroll, you know, back in the 80's, that was a big thing as well. "We have a company doing our payroll, we're not doing it ourselves." To now there are very few things that companies will not consider outsourcing, all the way to what was once considered purely creative content in terms of marketing, or a strategy and things like that where people are actually willing to accept the fact that there may be people who do this for a living who are really expert at that one thing. And those are the people you want to get doing that thing for you.

Sloan Foster: 06:04
So what would be some circumstances where outsourcing, and you just named a few where today, if someone is looking at outsourcing, where do you think they should look and assess? What would be the best thing to outsource?

Lawrence Waugh: 06:15
Well, it kind of goes through, there's a lot of reasons to outsource. One is if you have a skills gap. That is, and we'll just, you know, I could talk about software development, but let's look at payroll. So you know, if you have to hire someone, you can go to jail if you get your taxes wrong. So you want to get that right. And so you either hire someone who has spent a lot of time getting it right, or you outsource that to a group of people who have spent a lot of time getting that right. So if there are things that are very important to you to get right, and that's certainly something to talent source if you are not sure that you have that skill set easily available in-house. Other reasons of course, or to save money or to distribute risk or other things like that. So there are all sorts of different reasons outsource that apply to different areas of your business.

Russ Finney: 07:01
So, Sloan, I'm going to talk a little bit in the context of IT departments because most of our study focused on the IT function in these companies. Across not only the technology side of it, but also the application development side and where they were utilizing service providers that may have been in their own city. But again, that could be nearshore or offshore and so we did ask this question- "where are you employing outsourced resources?" And for now, let me just talk about the systems development life cycle. So if you think about that upfront on the planning and the analysis side of it, it's very tough for an outsource group to have the insight to be able to do the planning and analysis. It's generally those companies were using there inside the house resources or if there are product developers. Like right now we're seeing them agilize and were surrounded by product developers here in Austin, Texas. Same thing. They've got to be able to think through design and architect, whatever it is that they're going to build. So that tended to be a small percentage. So maybe 14 to 22 percent actually would use an outsource resource for something like that. The wide majority were using their own resources. As it got more into a design, it jumped up to about a third would you use some sort of an outsource resource to help. But then in the building and testing, uh, that's when it got really heavy with the companies that we were surveying. So eighty-six percent now, not across every single project, but eighty-six percent said that they would use outsource resources for building something. So coding, working in a framework, a configuring and then with testing that dropped down just a little bit, 75 percent. [It] drops way down and deployment, but then it goes way back up to 70 percent on maintenance.

Lawrence Waugh: 09:08
I think that one of the things that are most commonly seen as a benefit is the ability to leverage expertise that's difficult to find. So for instance, we had a prospect approach us about they wanted to migrate their applications off to Microsoft's Azure Cloud and weren't really sure how to go about starting to do that. What we've done that before. And there were some pitfalls, so we were able to sit down with them in a formal setting and go through, you know, a dozen or more managed services that the Cloud provides. And say, "All right, so here's the problems that we've run into when we do this. You think that this is going to work this way, but it's not. You need to make sure that you've done this." These are things that you only learn by experience. And so a good example is that sort of thing where a company either has to hire someone who has done this before or several people who've done these things before. And in the case, a dozen or two dozen managed services has done all of them or you know, 3-4 people who together have done this or you go find a provider who collectively has done that and can advise you. Again, the same way you hire a tax professional because they've done so many tax returns. They know the answer to the questions that are difficult to find. So very often one of the best things to outsources is something that is complicated but not necessarily core to your business. That is whether my data [that] lives in Azure or lives in AWS or lives on my server may not be fundamentally important to my business as a whole. In other words, it's not what my business is maybe an accounting firm or in this case, it's a bank. They don't really care about the software technology. They just want it to support them.

Sloan Foster: 10:49
So to that point, what are some overall best practices for getting the most from your external team, especially around agile processes?

Russ Finney: 10:58
Good question. So we uncovered about 10 factors and I'm not going to go through all 10 right now, but as we go through the conversation, we'll probably find our way through those. But a couple of things really stood out and we created a diagram which is a framework of this best practice for doing outsourcing and also doing virtual teams and being successful in virtual teams.

Sloan Foster: 11:24
Can that be found on your Twitter feed?

Russ Finney: 11:26
It can be found on my Twitter feed @RFinney. You'll find that diagram. But it's the real foundational at the top and the bottom of the diagram, two key components. One was what you choose to apply outsourcing resources to is very important. So the projects that you choose, the locations and also the aptitudes of the team-internal and external on being able to do this in a virtual outsource way. So not every single system, project, infrastructure, or even managed service will work well in an outsourced setting. So really trying to work your way through to find the ones that feels like it's going to be a fit. So that was number one from the companies that we talked with. You've really got to be selective on what you're going to apply this to. Make sure the teams that are gonna participate have an aptitude and a willingness to be working in that mode. I'll stop there for a minute if you have a comment.

Lawrence Waugh: 12:38
Yeah. So, you know, deciding what areas outsource from my point of view, it's- what do you need help with the most? There are ways to, outsource. Most of the things that you're going to want to consider outsourcing, it's, I do agree that sometimes, you need to make sure that the team, well, no, always, you need to make sure that the team you've chosen as appropriate. And the way you do that in my experience is you actually treat them like you treat any other employee. You should not think, "oh well, you know, I'm going to um, go outsource. So let me just go online and find the cheapest one or the closest one or the one that who's name I liked the most." You wouldn't do that when you're hiring an employee, and this is arguably you're hiring a bunch of employees.

Lawrence Waugh: 13:21
So you want to make sure that you're kind of doing your due diligence. For Calavista, we actually don't work with individuals. We only work with entities, so organizations that we have worked with in most cases, for over a decade now. So when we go bring on a new partner company to work with us, we'll spend a ton of time and that will go. We'll fly to whatever country they're in, whether it's an eastern Europe or South America or wherever. And we'll spend time with them. We'll look at their development processes, we'll meet their people, we'll interview people and on any project we'll interview those people pretty heavily. That is through resume screens and face to face via video conference to really make sure that there are people that we would want on our project just like you would do with an employee.

Lawrence Waugh: 14:01
So I think that one mistake that people make is thinking that hiring an outsourced (well in my case, you know, development group) might be like hiring someone to cut my lawn, which is, it doesn't really matter as long as they sort of know what they're doing, it'll be OK. And that's, that's not really the case. You need to have an organization who is not only very competent and more competent in arguably then you might need for a local hire because they're not going to be local. So they have to sort of step it up a little bit more. But not only do they have to be competent, but they have to fit in with the organization structure and they have to be able to work well in your environment.

Russ Finney: 14:34
That kind of leads into number two of best practices that we uncovered in. It's exactly what Lawrence is saying. The way that they expressed it, is about building trusted relationships. So it's not just utilizing resources based on resumes. Of course, you want to qualify who you're working with. I think it's also a best practice to try to if you've got somebody who's really uncovering and understanding of your business in depth, you want to incentivize them to stick around and stay your partner and also make sure that their resources are a hanging in there with your projects as well. So the continuity's important, but that all goes into the building the trusted relationship. And that's a year by year thing. You know, in the beginning, it starts out as a week by week thing. But for most of the companies that were in our study, they have a long relationship with these providers.

Speaker 3: 15:31
I don't want to really jump. I'm sure there's going to be a question about this later, but people talk about the pitfalls of outsourcing and "Oh, isn't there a high churn?" and things like that. And the answer that is no. Well, there can be, but you know what, what I always say is "if you hire someone and you treat them like fodder and you pay them poorly and you give him crappy things to work on, well your employees are going to quit." And if you do that with an outsource team, if you say, "well good, I've got a bunch of bodies here, I'm going to give them all this grunt work and I'm going to pay them poorly. I'm gonna expect them to be working, answering my phone calls and my text messages whenever I feel like reaching out to them."

Lawrence Waugh: 16:07
Yeah, they're going to get tired and they're going to leave. On the other hand, you feed people interesting work. You make them part of your team. You respect their opinions. You let them know that they're valued and by the way, you work with an organization that pays them fairly. They'll stay for years. We've had people on projects for well over five or six years. It's like an essay Humphreys wrote once about how developers don't quit, you drive them away. Once the developers happy at your organization, they will suffer through a lot to stay with you. And so same thing is true for outsourcing. Outsourcing can be an incredibly stable workforce if you do it right.

Russ Finney: 16:43
I want to make one other comment on this one before we move off Sloan. I know I know we've got a lot to cover here, but I think another little secret ingredient little magic formula is having an opportunity for face to face. Even if you're working with somebody halfway across the planet, getting one or two of their resources to come and in with your team for a little while or having the same happen in the other direction too where people have met each other. Maybe they've had lunch or dinner together. They've had some socialization. It makes it a lot easier than when you're working on the phone or through that video link when you have that relationship built.

Russ Finney: 17:34
People are empathetic to all the challenges that are in front of them when they've been through that.

Lawrence Waugh: 17:41
Yeah, you gotta do that. And Russ is absolutely right. We do that on almost every single project where we either bring most of the team over or all the team over and all of our Managers and Architects typically travel once or twice a year to go see the teams they work with. Because it's incredibly important to build that relationship. Again, you know, the whole thing is you don't want people to feel like cannon fodder. You want them to feel like a valued member of the team and the best way to do that is to make them a valued member of the team and respect their opinion and, and let them know that you care about them and want to want to face to face with them. And so that's a huge part of it.

Sloan Foster: 18:15
And take time to develop the relationship and feel a part of the relationship. So you've answered a couple of my next questions, so I'm gonna jump ahead. How do you validate a candidates firm, background, and credentials? You said video, you said, you know, kind of embedded with the team. Are there some other things that you do to make sure that before you get to that point they're who you want to work with and you validated them?

Lawrence Waugh: 18:38
There are a couple of things that we do. And I said before we only work with organizations, for a couple of reasons. One is it's kind of easier to check on an organization's reputation that is to check in individuals. I think I've told this story but I'll bore you with it. I think it's kind of illustrative of the one of the reasons we only work with organizations is you just don't know who an individual is. And so one case we had a customer we're working for and they brought in their own UI (User Interface) designer and the guy was in Romania and he was good. He did good work and we liked him. And that was fine until a week before the deliverable, we were making last-minute changes and you suddenly disappeared. He just dropped off the grid. No one could reach them. And of course, he's in Romania. So what are you going to do? You can't drive by his house? So you can text him and call them and email them and you know, who knows where the guy lives, he's just a name on it. So I'm at this point it was a sort of ubiquitous video conferencing, so we hadn't even seen the guy. But anyway, so he dropped off and we finally, Calavista had to hire someone locally to kind of finish his work so we get the thing out the door. That was painful and costly for the customer. And again, he was their guy so it wasn't, you know, there's only so much we can do. But anyway, week after the project went live, he showed back up suddenly like, "Hey, sorry how are things going?" you know, we're like, "where the hell did you go?" Well, so the answer was, "well, um, yeah, I was grounded, my mom took my computer away", and as it turns, as it turns out it was in high school and you're making good money for a high-school kid. But the point is you just don't know, so we work with organizations because it means that first of all, you know who they are. There's a record, you can go visit them, there's a recourse if they do something wrong or they violate they've breached their agreement. It's much, much easier to hold an organization accountable for IP protection, for instance, than it is to hold an individual. An organization is much more to lose if they let people kind of play fast and loose. And so that really helps. So when you're, again, trying to figure out who the people are to work with, you have to trust the first and you do that by reputation. Do that by visiting. Did you do that by meeting with Architects and Engineers and talking about, are we in sync on how we deliver software? And then once you like the organization, then you start meeting the individuals and see who would we work with and you know, and, and just meet as many of them as you can and realize, yeah, this is kind of a kindred organization and there are a lot of organizations that aren't you and OK, they're, you know, they're not stupid or anything like that. There are their methodologies and their work style is just not compatible with us.

Russ Finney: 21:16
So I might just add another point on what Lawrence just talked about and what we found as far as companies depending on the size and the sophistication, the company that was utilizing the resources. If it was a very small company, let's say, to start up and they have a very limited amount of money in their seed capital to build something and they may use some resources that are located in another country because the dollars are going to go so much further to utilize those resources. And they may not have a legal entity in the US. So they're just doing something via email in a foreign country and the wiring money to them. And getting the code back, right? It's very difficult to enforce the agreement in that situation. But a small startup company may take the risk, but a large firm, at least the ones that we were working with on this study, they wouldn't do that. So there has to be a legal entity established in the US and when they do their contract between the outsourcing firm and the company, it's a large automobile manufacturer that legal agreements going to be a US entity to entity us entity that entity agreement with some kind of a jurisdictional definition either in a certain state or county or whatever to resolve disputes.

Lawrence Waugh: 22:44
Sure. And that's one of the reasons actually customers use Calavista is because we are local US company and in many cases local to them, but we have resources all over the world via our partnership companies. It gives them a local, US-based, full weight of US law on our shoulders, a throat to choke. And that works really well for a lot of companies rather than just finding one themselves offshore. Because again, if you're not going to go out there and visit them and spend time, well it's a lot easier to do that with a US-based company.

Sloan Foster: 23:11
It kind of goes to my next question, about certain steps which should be taken to protect internal IP. It sounds like working with a legal entity, the legal entity to a US-based legal entity at least helps alleviate some of that. What are some other things that you would put in place, or have put in place to help protect your internal intellectual property when you're outsourcing?

Lawrence Waugh: 23:30
Well, I think that the first thing is IP is really a hot-button and people will say often "well the problem with outsourcing is it's hard to control your IP." Or "how do you protect your IP?" I don't mean to be the doomsayer, but I have to say the fact that you hire your own employees doesn't mean your IP is protected. It is really easy because it tastes a keystroke to send your entire code base to someone whom you don't want to see it. And it can be done just as easily from a desk inside your office most of the time as it can be done from someplace else. Right? So, so people delude themselves into thinking, "oh, because it's all US-based my IP is somehow safe." It's all about the people you work with.

Lawrence Waugh: 24:12
If you have people who want to steal your IP and they have access to it, well they can steal it. And so again, it comes back to reputation and it comes back to having a lever... Again, if you have one person in Romania, or you have one person who's far away, and they do something they shouldn't do with your IP. What are you gonna do? I mean, who in Romania do call to go try and put a stop to that? Well, if you're working with a 3000 person company in Romania or Slovakia or you know, wherever, wherever the company is, well, there is a much, much better chance that you can get them to cure your problem. And so the first thing to do for IP protection is to realize that the risk is not the fact that you're outsourcing, the risk is the technology you're using to actually manage you're coding, your IP. Then it is worth choosing who you work with carefully and investing the amount of time it's going to require to make sure you're working with people who are going to respect your IP. There are companies and countries that Calavista will not work with because we have seen, not through our experience, but through other companies experience, an inability to protect IP that in those cases.

Lawrence Waugh: 25:27
So basically know who you're dealing with, making sure that the entity is large enough that you can have an impact on them and they'll care. And then, um, reputation.

Russ Finney: 25:41
Just a couple of additional points on that one- It's really important. So I work with a lot of defense contractors, aerospace firms, they're very sensitive about designs and they're also sensitive about code, right? And in many ways, we're solving this problem through all the Cloud services that are coming up. Especially the high reputation, you know, big Cloud providers that we all know and that were somewhat taken advantage of even more every year. But what I've seen at the companies that really have high sensitivity about this, is not only the employee awareness that Lawrence was talking about, but also having the products in place, the repositories in place that have good access control, good audibility, making sure that depending on how sensitive things are that only need to know or need to see or need to touch. Right. And then when people are doing that and being able to trace through who was doing that or when did it happen. So that if a breach occurs or if you find your IP showing up somewhere else where it's not supposed to be, that you can actually build a trail back to determine how that occurred. And then you've got a better case to go get a resolution through whatever method you use.

Lawrence Waugh: 27:05
Yeah. And that really comes down to tools and processes. Like at Calavista when we work with a customer, we will internally provide them with their own IT sub-net and so, you know, Calavista may be working on a project, and because I'm on that project, I am on this subnet, I can't get to work from other companies, I just, I can't. And nor can any contractor from one project to see it and when we do that, so there are also tools in place, but the point is we even take it down to the hardware level to try and make it so that we are really aware of who has access to what and when and make it really easy to turn people off when they leave the project. It takes a little bit of discipline, but that's, there's no substitute for that.

Sloan Foster: 27:51
Well that actually answered one of my next questions which were creating a common development platform or for co-development, but you've answered that. So moving with that, so quite ahead of the curve here. So moving right along, are there any current security setups or audits which should be considered when you're outsourcing? You mentioned access control, you mentioned some other things. Are there any other best practices is perhaps part of that 10 that you mentioned that can help with security and really walking down that particular environment?

Russ Finney: 28:22
Well, talking about system development kind of things, really the best practices are going towards the outsourcer comes to you and you control the environment they're working in. That's really the state of the art best practice. But you still see companies where they'll do a mirroring of the source code and a mirroring into the system into their systems. But none of that reaches production without going through some kind of a quality check as it comes back. So I'd say that's the two probably most common that I see these days. I don't see it as much where they have full control over the whole environment or where they have the environment in their own country. It kind of depends on the company in this situation.

Lawrence Waugh: 29:11
And there are numerous certifications you can try to get, this isn't really the place for all of that. But we also do that exact thing where we basically provide a lot of stuff has done in the cloud nowadays and so it's really easy to have people, you know, from around the world accessing repository in the Cloud. What we'll do is actually set the Cloud up so it can only be accessed from Calavista and then require everyone to tunnel through Calavista on their way. And that way we know who's doing it, and when someone's not on the project we'll click their VPN is off and they can't get to the repository anymore. We don't have to go around and say, "oh well, you know, there are 18 servers in the cloud doing different things and let's go to each one and change the access list to this person." You want to make that as manageable as possible and as streamlined as possible.

Sloan Foster: 30:00
So wrapping up here, is there anything that you would suggest. You've mentioned some best practices, kind of one last parting thought about outsourcing and the value of it or things to be aware of when you're doing it.

Russ Finney: 30:14
Well. One other one would have a cadence of contact with your provider. So it could be a weekly meeting or daily meeting. It depends on what the project requires or what kind of services they're providing. But I think a good touchpoint cadence, and I know some companies like to have a, there are resources out there in a messaging, it could be a Microsoft messaging tool or any of the messaging tools that are out there. To where they actually see their online or they're not online or, or they're listening or they're not listening so they have a better feel for are the people that I don't actually see, are they really tuned in to what we're doing. So a little bit of cadence. I also think video helps a lot. So of the tools that are out there today, there's so many. Starting with Skype and then go into all kinds of different toolsets and Webex and Zoom and everything else. If you're able to do that. It gives you more confidence. Some cultures don't like to be as blunt as Americans are, you know, and expressing opinions. They're doing it non-verbally [through their] expressions and it really helps to be able to see the faces, especially in certain countries of the world where they're not agreeing. You're not seeing it, but they are definitely not agreeing. And I can see it.

Lawrence Waugh: 31:41
Russ is absolutely right. There is no substitute for video conference. We're really big on that. But not only just, "oh, there's a video conference" because we've had this where there's in the conference room a video camera, and so you see six people sitting around the table. That doesn't work. That's not enough. You can't see the micro-expressions, that flutter of doubt that crosses someone's face when you want them to do. You miss it because you just see this room of people who are kind of staring up at some point in the distance, which is the camera. You've got to be able to see their faces and it's gotta be clear. So that's basically HD and a camera, Webcam or whatever that is focused on their face. And so whatever technology you use from our point of view, Calavista's point of view, that's what it has to be. Otherwise, you're just kind of checking the block and not actually getting much out of it.

Russ Finney: 32:28
Well, I was just going to add... Also being a little bit balanced in a timezone so it doesn't always have to be in timezone and they are working in the middle of the night. I mean occasionally go ahead and stay late and that way they're working during the business day. So a little bit of those trade-offs helps a lot in morale on both sides.

Lawrence Waugh: 32:52
And that's sort of treating them like fodder thing. If you know, they've got lives, and you want to respect their lives, and you want them to be happy to come to work. And not see it as a death march. But I will say I have a blog about the top 10 ways to make your outsourcing project fail and the first way and the on the list is to not start.

Lawrence Waugh: 33:21
I find that a lot of people treat outsourcing as, you know, it's kind of when you are, you hire the cleaning company or you want to hire a cleaning company for your house. But first you have to clean your house because it's like, you know, you've got to kind of get things under control before you can hire somebody. And really what you should do is hire someone to come in and get your house under control. So people will say to us all the time, "oh, I really want to outsource this project but we're not ready. We need to like kind of get all of our ducks in a row." And what they don't realize is that there are companies, and you know, of course, Calavista is one of them, but we're certainly not the only one their companies that can help you get your ducks in a row.

Lawrence Waugh: 33:52
And so for instance, if you need to put down on paper the requirements for this project, well, again, there are people who do that for a living, that is what they do. They do software requirements and there are companies that are software development companies or even just companies that just do requirements that can do that for you. So if you can find a company that can provide you sort of the turnkey service of we will show up, become part of your team and help you get those requirements on paper and then help you put together a strategy for how to deploy them. And how much of that, if any, you want to outsource. And then what that's gonna look like. You can actually get a lot further than you'll think without being as ready as you would think you have to be. So I think what I'm trying to say is you actually, you know, for those of you out there who are thinking, "oh yeah, outsourcing sounds great, but we're not in a place to do that." You might be, you just need to pick the right partner who can help you get from where you are to where you want to be.

Sloan Foster: 34:43
So as far as more information, Russ, I know you mentioned you have this wonderful document you're using to talk about the research that can be found at...

Russ Finney: 34:51
I'll put a link out there on Twitter @Rfinney. I'll put a link to the report that I'm referencing and it's about 16 pages or so and it's full of best practices around what Lawrence and I are talking about. And this is mainly a discovered from these 500 companies, just what they, what their insights were on doing that.

Sloan Foster: 35:18
I will also post a link on the Calavista blog. It's www.calavista.com. And you can also follow Calavista on Twitter @Calavista. So thank you all for listening and look forward to having you tune in next time for Calavista Conversations! Thank you, Russ. Thank you, Lawrence.

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