Outsourcing web design
& development contracts
Scenario: A client comes to you wanting a quote on a web site
and it's the perfect job - apart from one element in the project -
you aren't skilled in this particular web technology. This
component is a crucial element in winning the contract, there's no
way of getting around it. What do you do? You don't want to lose
the contract, but you definitely can't afford to hire a new
employee for this project - there's too many risks and associated
headaches.
The answer is to outsource that part of the project. You don't
need to be a Fortune 500 company to get into the outsourcing game.
Another scenario is where you have so much work on at the time
that you really don't have the resources for taking on and
developing a full project. In these cases, small companies tend to
refer the entire job on to others. But then you lose the client
forever to the other company. Wouldn't it make more sense to
secure the contract, outsource everything and oversee the
development? That way if one of your current projects falls
through, you will still have work and you will also more than
likely gain future work from that client.
Web development is a huge field with many hundreds of technologies
involved - there's no way a small web design company can cover
everything. But without having access to expert designers and
developers, small companies can lose many contracts through a lack
of suitable expertise.
The idea of outsourcing projects or project components may strike
fear into the hearts of many small operators, but the future
success of your company may depend on it - otherwise you may find
your customer base drying up.
What should I outsource?
Most small web design and development companies naturally achieve
great expertise in specific areas - these project areas are the
ones that they are not only particularly good at, but also the
fastest in generating. We all build up our repertoire of "tricks
of the trade" over time, and these are the elements of any
contract that it makes the most sense to keep.
Where are the bottlenecks in your development processes? If
developing graphical elements for web sites is one of your
challenges, then it only makes sense to outsource that work. You
may feel that paying $80 an hour to an expert graphic artist is
too steep considering your standard rate is only $50 an hour, but
consider this example:
A client wants a Flash element created and Flash isn't one of your
stronger areas, so the length of time it will take you to create
that element is a bit of an unknown - and you have already set the
entire project price, which the client has agreed on. You end up
spending 6 hours on designing the Flash animation to the clients
satisfaction.
At a rate of $50 an hour, that element has cost you $300 to
create. If the Flash component had been outsourced to an expert,
although they may have charged you $80 per hour, it only took them
2 hours to create. Add on one hour for the time you spent
consulting with the Flash expert and the total cost of this
element is down to $210. Even if you spend two hours on
consulting, you are still well and truly ahead, lessened your
stress and freed up time to spend on other projects or elements.
If you are a web designer and you are also responsible for keeping
your business financials up to date, then you are probably losing
money. A contract bookkeepers services cost a lot less, generally
speaking, per hour than the value of your own labor. It makes
financial sense to maintain this aspect of your business yourself
if you don't have a lot of work on the boards -or does it?. If you
don't have sufficient development work to keep you busy, then the
hours you are spending on maintaining your books would be better
spent in submitting tenders and marketing your business.
How do I outsource?
It doesn't have to be a difficult process, although the first
time you outsource project components, it will take a little time
to get the paperwork together. After the first project, the
necessary base documents will be in place which will expedite
future collaborations.
Before agreeing to outsource work to another company, ensure that
base documents covering the terms of the relationship,
intellectual property and confidentiality issues have been
developed and signed - these are fairly generic documents which
can be easily adapted to be functional in a number of different
projects. These don't necessarily have to be hundreds of pages
long - just enough to be recognized as being legal and binding to
protect your interests.
After you have the basic documentation in place, it's time to
spread the word that you are looking for contractors. This can be
gone about in a variety of ways.
Through your current networks - let your peers know you are
looking for contractors
Compiling a mailing list of developers and designers from online
professional directories in your region and then contacting them
requesting expressions of interest regarding collaboration.
Go global and use one of the many reputable online
collaboration services. In most cases you'll find that posting
projects is free.
The last few years has seen a number of online collaboration
services come to life, but be wary and study the companies
carefully before outsourcing via these means. A good online
collaboration service will also act as a watchdog over projects,
ensuring that both contractor and sub-contractor are protected.
Taming the Beast.net offers online
collaboration services via a well established partner.
Literally hundreds of people post projects to the service each
day.
Before you post/advertise a project, ensure that you know exactly
what you want a sub-contractor to do - open ended arrangements
tend not to work out. There must be timelines and effective
parameters of operation in place - both parties must be very clear
on each others' role.
Communications between contractor/sub-contractor must be clear,
concise and rapid at all times - assuming that a task will be
carried out in a particular way can lead to disaster; especially
when working with contractors from another country.
Benefits of global outsourcing
The benefits of advertising for developers and designers
globally are many. By building up a network of professional
contractors, you not only decrease your running costs as each
contractor is responsible for his own work environment and
insurances etc, you also greatly expand your companies portfolio
of skills that can be offered to clients.
By outsourcing project components you aren't efficient in, it will
leave you with more time to focus on your core skills and further
develop those.
In advertising project components globally, you will also probably
secure the best price possible for the work. India and Eastern
Europe have many thousands of quality freelance programmers
looking for work, and their rates are incredibly low in comparison
to their Western counterparts.
Challenges of outsourcing
One of the major temptations of outsourcing is to approve the
lowest bid in order to maximize profits. This is definitely not a
good practice, especially when dealing with freelance developers
and designers from other countries. If problems should arise it
may be more difficult in having them rectified. Remember that your
business reputation is on the line and if the designer or
developer doesn't deliver, your could lose the client, and worse
still, your business.
This is not to say that all low bids will translate into poor
quality work, but you need to research these bids carefully. How
long has the company/freelance been around for? Do they have a
portfolio? Do they have referees? What are their qualifications?
If you are using an online collaboration service, read the
comments left behind by other companies - these will give you some
indication as to the competency and integrity of the freelance or
company.
In any outsourcing arrangement, if you get "bad vibes" it's best
to heed your instincts and not continue with negotiations - too
much is at risk.
Communication can also be a bit of a challenge. If you receive a
bid from someone in very poor English (if that is your primary
language), it's best to keep away. I'm not just referring to
foreign developers - the literacy skills of the modern Western
world are quite appalling.
The Internet, by and large, is still about written communication.
If you have to spend hours correcting the grammar and spelling
mistakes on a web page or in an online application, then the whole
exercise is pointless. Even if the project components you want
developed are only graphical, if the sub-contractor's use or
comprehension of the English language is poor there is a risk they
will not understand exactly what you want. A great deal of time
will be lost in the to and fro of revisions.
It's for this reason that I suggest that if you do intend to
utilize non-Western contractors, it's best not to give them
elements of the work relating to marketing without very strict
specifications; they just aren't in a position to understand
Western psychology, no matter how many books they've read on the
subject - Westerners are weird ;).
Also bear in mind that although you may be able to hire an
overseas developer for (example) $10 an hour, it will probably
cost you $20 per hour with the inevitable. communications issues
that will occur.
Trust and outsourcing
If you do decide to go down the outsourcing path, remember that
the developers and designers you contract are, to a degree,
partners in your business. In many cases, your "partners" will
need to know the big picture of the project, and that means you
will need to invest some trust in them - they are not the enemy,
but a crucial element in your online success.
Michael Bloch
Taming the Beast
http://www.tamingthebeast.net
Tutorials, web content, tools and software.
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