Often I hear from people that they will never work with someone before they have an opportunity to meet with them in person. Some people have always worked this way; they like to build a relationship before working together. If it is possible to do this great; but in the offshore world, meeting face to face is not always possible nor is it always necessary – especially at the beginning.
Many types of teams work virtually in the US, in today’s economy; whether it is professional associations, boards of directors or employees of the same company. All of these virtual teams prove that it is possible to form a good working relationship with someone without a face-to-face meeting. The same can occur when a company looks to work with an offshore partner for developing their software, for example. Certainly trust needs to be there, but trust is something that has to be earned, and both sides have to earn it. By simply visiting an offshore location, full trust is not going to be earned.
If you are the buyer, you want to find out how the team of people you will be working with actually works. Certainly talking with them before a project starts (for example, interviewing them before a project starts) can help. Talking with references can help too. But the best way to know how a team will perform is to actually have that team complete a set of work for you. Start with something small for a pilot, something non-critical. Use that project to get to know and communicate with the team and allow both sides to get a feel for how the other works and performs – and most importantly start to build that trust. The offshore team will be just as concerned about how fast and thorough of a response they will get from your side. They do not know yet how responsive you will be to their questions and concerns. Communicating with each other often is what is going to make the project and collaborative work successful or not.
So do you visit the offshore location first before deciding who to work with, or do you do a pilot project first? Of course the answer is, as always, it depends. It depends on what you are outsourcing and the extent to which you are looking to engage a partner, but for many companies starting with a pilot project can be just as telling as an actual offshore visit. For example take a pilot project, approximately 4 weeks, two developers, one more experienced, the second more junior. The cost of this project to be done offshore, on average, would cost approximately $5,000; if it is a first project with the offshore company, most likely they would give you a discount so the final cost would be even less. As a result, in one month, for less than $5,000 a company can know whether or not the offshore team can perform, can learn how collaborate with the offshore team, can start to build trust and can receive real work results that can actually be used to further develop their product and service. The resulting project can even, in some cases, provide additional revenue generation for the firm.
In comparison take the situation where the company decides to visit the offshore location first before piloting the process. For most businesspeople this means at the earliest planning the trip two to three weeks out and most often further into the future. If a visa is needed, it may also add to the complications and timeframe. Let’s say you’re one of the lucky people, and you are able to plan your trip three weeks in the future to get better pricing on airfare, and you do not need a visa for the country you’re visiting. The offshore company you’re going to visit will most likely be able to arrange everything else for you: hotel, pickup at the airport, transportation in country, etc. Typical costs for such a trip could be:
| Airfare | $1,000 |
| Hotel | $250*4 days $1,000 |
| Meals | $40*5 days $ 200 |
| Travel to/from airport in US | $150 |
| Approximate Visit Total | $2,350 |
Actual pricing may be higher; this is just to give an idea without over-inflating travel expenses.
Assume the offshore company you’re visiting takes care of several internal costs for you; some meals and internal transportation. These costs don’t include productivity time lost while you’re traveling. Even though everyone can be very productive remotely these days the complications posed by the shift in timezone and time spent meeting and looking around, for many people it will be harder to be as productive during travel halfway around the world as they would be in their office or home location.
Also as a result of making this visit, at a minimum four weeks will have gone by, almost $2,500 will have been spent, and what will you have to show for it? Certainly you’ll feel more confident that the offshore company has a real office and that there are real people working there. But will you feel more confident that they will be able to do your project? Probably not because they haven’t done any work for you yet – they won’t have earned your trust yet. In other words, you won’t have received any value (improvements to your product and service) that you would have if you had undertaken an actual project and actually seen what the service provider can do. The cost of the visit and lost productivity for your time as well as added value to your products and services equals the cost of doing a pilot project to begin with.
Here’s a guideline you can apply to figure out if you can take advantage of doing pilot projects before visiting the offshore location:
- Final team size will be under 50
- Team size can be increased gradually, x number per month over several months, not all at once
- Technology knowledge required can be widely found in many offshore locations.
