Partnership

Offshore in a COVID World

It may come as no surprise that running a software development shop, with talent that resides and works primarily from outside of the US is fraught with challenges. Aside from dealing with multiple currencies, languages, cultures, and timezones, there is rarely a client that decides “to give it a shot”. It is usually a binary yes/no result of the conversation. The objections are almost always one of these: “We need our team to be under the same roof. We are firm believers in face-to-face collaboration”, or “Our CISO will not provide access to anyone outside the US”, or “We don’t believe in this cloud thing. We like hardware that we control, and people that we can see”, or my favorite (NOT!), “We had such a bad experience with a team in that we decided to never do this again”.

Are these valid concerns? Absolutely!! People prefer to operate with the quantity they know, names they can spell, accents they identify with. Especially if they have to justify their decision to someone else. Even though – over the years – we have rehearsed a number of different answers, and strategies to try to overcome some of these concerns, they are still a tough nut to crack. It truly doesn’t matter how absolutely awesome our team is.

And then… COVID. Bam!

All of a sudden, a distributed team is all one could expect, and be thankful for. Timezones? Who cares, when you have not attached to any particular schedule anymore. Cloud? Of course! All kinds and flavors, please! Face-to-face… Zoom does it, right? What about those rigid CISOs that hold access keys close to their chest? Where there is a will, there is a way.

Every company is a startup

With the lightning-fast spread of the pandemic, companies did not have time to plan or adapt. Start working from home, or die. Some allowed employees to come in and get the extra monitor, the office chairs, and other accessories that made working from home more tolerable. Others, with deeper pockets, issued home-office refurbishment bonuses, and others, sadly, simply shut down. Those that had always supported a work-from-home lifestyle, fared pretty well. So well, in fact, that they have made some of the changes permanent. A recent article on CNN showcased some of the tech giants such as Facebook, Twitter, Slack, etc that will now allow a permanent remote work policy.

What about more traditional industries such as banking, airlines, healthcare, insurance? Well, as the millennial motto goes, “the struggle is real!”. These organizations were not well equipped and frankly, ill-suited to embark on a we-will-see-you-when-this-is-all-over approach. In a way, even the largest, more established companies on earth, became startups. They had to come up with solutions that were immediate, and unproven. IT departments that were used to moving at the speed of the DMV sloths in the movie Zootopia (look it up. It’s that funny!), had to improvise overnight and deploy half-baked solutions that only made people more anxious about not being at the office. COVID related challenges, never before imagined, were now an emergency. Take the airline industry, for example, they had to figure out how to store and secure thousands of heavy iron aircraft, preserve the engines, prevent corrosion, etc. The same for all ground equipment dispersed around the world. And this is just the logistics related to stuff. Add the people factor to it, with the HR challenges, crew allocations, early retirement, etc. There are only so many spreadsheets a company can have! Not only their revenues dropped to near zero, but their IT expenditures to deal with these issues increased at supersonic speeds. Deloitte published a nicely detailed report on the state of the industry and the innovation it will take to return to profitability. They have to act like a startup and act fast if they want to survive.

What seems to be an opportunity like no other ever presented, comes with a whole new set of challenges. Sure, there are players out there that are ready to make a quick buck. But their experience and inconsistency will fizzle when the first approved vaccine goes into someone’s arm. The goal is to transform this COVID-induced growth into a newly structured business strategy.

So what are the new obstacles that our industry faces? How can a company select a partner to guide them through their new software development journey? Glad you asked! Let’s take it in parts.

The Hurdles

With the realization that talent is all over the world, and that working from home is the new normal, companies are now a lot more acceptant of the fact that they will be ok with – for example – a DBA in Sri Lanka, and an AWS Cloud Architect in southern Brazil. That is driving the demand for offshore talent like we have never seen before. And, with that, hourly rates are rising faster than the sun in Asia.

Retaining the workforce now requires a lot of creativity and motivation in gymnastics. With companies around the world making cold calls to people they find through social media searches, there are lots of ships to jump onto. This is where having an experienced partner that knows the ins and outs of dealing with a buyers’ market.

Forecasting is another area that has been put into a tailspin. There is only one certainty that we can count on when planning ahead: nothing is certain! With the constant arrhythmia of the market, political unrest – pandemic related or not, and immigration policies and/or sentiment dictated via Twitter, often multiple times a week, planning through the uncertainty has become a job on its own. Yes. We do have leaders assigned to planning allocations, many times a week, based on what we are seeing and hearing on a daily basis. Keeping a bench staffed is currently our single greatest management task.

And, finally, the impact that all of this craziness has on currency exchange rates. As I am writing this, today alone we saw an aggregated shift of 18% in currency exchanges in the markets where we have our employees. Needless to say, we can’t simply pass that along to our customers. Juggling those variations have always been a part of our business. It’s just that now all of it happens at once.

Selecting a Partner

Ask any realtor the three most important drivers to home prices, and they’ll reply, “Location, location, location!”
In the business of software development outsourcing, especially in times of COVID, if asked what are the three most important factors in selecting the proper partner, I’d reply, “Experience, experience, experience!”. There is no single greatest predictor of a successful outcome for your project than selecting a partner that has been through several political cycles, economic roller coasters, and worked on startups as well as Fortune 100 companies. There is not a single manager or lead in our company right now that is not actively working in monitoring the state of the world, and making changes as necessary. Because we have lived through some chaos in the past, our playbook is well documented, and the players know their positions.

The majority of people we hired in our first two years of operations are still with us. Our 5 year retention rate is > 95%. That translates into having a team that knows the paths to success and does not need constant hand-holding. When selecting a development team, make sure they have a history of solid team retention.

Staff loyalty also brings with it a foundation of quality that is essential to a fast ROI. There simply is no time to waste with poor quality these days. Sprints are two weeks long, and they better work! A team that has worked together for a long time, can complete each other’s’ sentences or code. QA engineers know who to talk to and about what. It is a smoother process all around.

All of this combined also generates predictability in operating costs. Your team is a known quantity. They know the pitfalls, and any and all adjustments have already been made as a part of the overall rates. The newcomers to this market have not yet learned how to properly tune their margins so you are likely either being charged too much up front or not enough and constant bill adjustments have to be made.

And, finally, when selecting an offshore partner, make sure that there is plenty of onshore representation as well. Not just the account managers, but actual technologists that can hop on a call with you or your tech team. Folks that are seeing your challenges through the same cultural lenses.

Conclusion

If I have to come up with one piece of advice on how to fly through the COVID turbulence it is pretty simple: Don’t panic! With the right team, used to turn on a dime, you can – and will succeed. And, if you are still not so sure… come talk to us! We’re here to listen.

Meet the Author

Paulo Vieira

Paulo Vieira is the Managing Partner focused on all Technical Operations and delivering world-class business solutions. He is an avid pilot and loves traveling the world with his family.

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