One of the most important responsibilities for CIOs is to develop creative solutions to help their companies navigate tough business conditions. Most often those solutions involve cost reductions in the way business is done, and a common approach is to contract out certain projects or augment an existing team with contract employees from a third party vendor.
But as many hiring managers in Silicon Valley will tell you, finding talented individuals in a given locale with the necessary skills for the job can be exceedingly difficult, even for a region whose name is synonymous with the tech industry. For this reason, many companies are starting to cast a wider net and are partnering with vendors and individuals located all over the globe, and in doing so they are combining resources to form an extended remote team just like any other in operation. And if you read our previous post, “Working Remotely Works,” you know that Bonzzu is a big fan of remote teams.
However, since the CIO’s goal is to minimize costs without sacrificing talent and efficiency, where companies choose to cast their metaphorical net becomes extremely important. Because in the world of software development, costs in this case are not simply the prices charged for services, but include any sacrifices a client bears when managing and coordinating a project with another company.
So here are some things to consider when selecting third party partners:
- TIME ZONES:
Bringing in a team of employees that are located on the other side of the world means shifting all collaborative business to the early morning or late evenings, and absolutely nobody wants that. It means having as much as a 12-hour gap between consultations with team members, and that can take a massive chunk out of productivity. And then if any problems arise offsite and the team needs to consult someone in the home office—well, you can see how that wouldn’t work.
But, when working with teams located in countries that are closer in proximity to your home office, business hours are either very similar or even identical. For example, if your home office is in San Francisco and you need to coordinate schedules with a development team in Argentina or Peru, it’s really no different than working with folks in New York—and it’s even easier if you’re on the east coast. Simply put, in an industry where most tasks feel urgent, it becomes much easier for partnerships to succeed when work hours aren’t an obstacle, and you don’t find yourself seriously wondering if time travel will be made possible by next week.
- CULTURAL GAP:
Language barriers and cultural divides are real issues. Miscommunications are a constant danger in any business, but they can be especially frequent with team members lacking a common language and cultural context. Additionally, individuals located abroad don’t always learn a task the same way it’s taught domestically, leading to very different ideas of how a project should be completed or when it can be considered finished.
However, many of these obstacles are minimized or made non-existent when working with teams in nearby countries. Owing to a history of convenient trade and tourism, which then results in greater cultural familiarity, countries such as those in South America are much more attached to the U.S. From fashion, to pop-culture, to shared holidays, and even technology consumption patterns—the cultural divide is much smaller, which makes for a much more efficient and fruitful partnership. And language barriers—while still present—are typically a lot less common given the sheer volume of bi-lingual individuals in both North and South America.
- TRAVEL COSTS:
Few remote teams can work on their own indefinitely with zero face-to-face contact with the hiring company. Meetings and visitations at either location are bound to happen, and sending people across the world is both expensive and exhausting. It costs money as a pure monetary expense, and it costs money in the productivity lost by way of tired, jet lagged employees.
One the other hand, it’s a lot cheaper to arrange those face-to-face meet-ups when you don’t need anyone to traverse half the globe. If the vendor is located in Buenos Aires for example, not only are travel expenses minimized but so are any sacrifices owing to jet lag. Thus, when hiring a team in Asia and South America wind up costing roughly the same amount, the ease of travel between the U.S. and the latter can be pretty hard to ignore.
In the end…
There’s no doubt that contracting work to third party vendors, when handled correctly, can help support growth, improve efficiency, and provide significant cost savings. But in order to do this, the focus needs to be on creating an alliance with the vendor—and in order to have an alliance, things need to be, well…aligned. So the closer the vendor, the greater control U.S. businesses have over those inherent variables—which when it comes to software development, is absolutely invaluable.