5 Tips to Better Outsourcing from Armenia

With the growing popularity of outsourcing and freelancing around the world, we wanted provide 5 tips that will help you become better - especially from Armenia. These are universal ideas that will help you get more work and better profit from each contract.

1. Become an expert in one core area

When I see people that list everything from Objective C/C++ to .NET to PHP to Ruby to HTML 5 or core skills, the first thing that pops in my mind is that the company is just an outsourcing monster with a little knowledge about everything and an expert in none. Pick one core area to be an expert. It does not have to be just one specific thing like PHP, but could be more like Responsive Web Design / Mobile Web App. Selecting that one area would include HTML5, CSS, maybe Phone Gap.

2. Build Your Online Profile

Just like you will Google your clients to find out more about them, they will do the same. The key to Marketing and PR in the IT world is being seen as a leader in your core area.

Leverage the media. The media is a powerful and influential source for educating potential customers on outsourcing trends and solutions. Consider contributing to publications that feature customer case studies, quote industry experts and publish opinion articles authored by outsourcing company experts.

Host seminars and Webinars. In a market saturated with hundreds of seminar offerings, companies have the most success with brief (two hours or less), highly targeted programs that demonstrate solutions geared to business challenges within a specific industry. Webinars are also attractive to sponsors and clients alike because they are cost-effective, require no travel and contain similar content to live seminars.

Participate in industry/educational forums. Outsourcing conferences enable companies to showcase their clients’ success stories and achievements. This interactive, peer-to-peer format allows business prospects in a similar industry to address common challenges, learn by example, and to meet the outsourcing partners behind customer achievements.

3. Get paid to increase your skills.

If you do not run a full time outsourcing operation, then one way of expanding your skill set will be to find outsourcing work in the specific technology you are looking to gain more experience. For example, I knew a company that had wanted to expand from their base of HTML / PHP web development more into web app development with a focus on mobile devices. They decided they did not have the skills to go into native app development, but they could leverage their web development experience. So their learned the basics and then found a project that hey felt comfortable with - then a second and a third. The fourth project was their own Web App which they resold as their own product. The key point here is that they leveraged contract outsourcing as a way to gain the desired skills and be paid to do so. WIN - WIN!!

4. It is all about the Contract - Get it Right.

As a general rule, Service Level Agreements (SLAs) should include some numerical objectives and a clear statement of the end results expected. It’s also important that the people responsible for the performance being measured are the ones involved in the development of the metric. It’s easy to get lost in the nitty-gritty details of performance management. In all cases, start by establishing business goals, then outsourcing goals and last, focus on the terms of the SLA.

How do you begin drawing up an IT outsourcing contract? Never use a template when you draw up an IT outsourcing contract. I believe that they will be  inherently slanted toward the the other side, and it’s going to take a lot to modify it. Instead, look to your own experience, and don’t be afraid to turn to a third-party. Some clients are very focused on cost, but that’s not necessarily the most important aspect of an IT outsourcing deal. You need to have your potential client understand that they are buying something more service-related and relationship-driven - it’s different than buying just a software package.

How do you craft SLAs in an IT outsourcing contract? Every contract should have performance metrics that prove that you, the vendor, is living up to the terms of the agreement. For protection of both you and the client, never sign a deal without SLAs, or with to-be-determined metrics. If the penalties associated with the SLAs are too harsh, then work on changing the objectives. Clients often get frustrated when their outsourcer is meeting their SLA but they’re still not happy with the service levels delivered. Everyone thinks higher SLAs are better, but they don’t quite understand the financial implications of what it means in dollars and cents. My suggestion is to spend time explaining the cost and effects that more rules will produce.

Put in an out clause for you and your client? Termination language has to be very clear, and it should include three provisions: one for cause, if there is a material breach in the contract; one for convenience, if the clients own business needs change. Give the client the option to pay an early termination fees and exit. This may not seem like a smart option at first, but if your termination fee is reasonable, you will get it - even if you have to go to court.

5. Build a better business by doing outsourcing work

Outsourcing customers are developing globally standardized processes and systems. They are beginning to place more weight on vendors’ abilities to provide equally standardized capabilities and processes. In the long term, for example, work delivered from a center in Gyumri, Armenia, will have to be fundamentally the same as that delivered from Hyderabad, India. This will force you to increase your skill set to be competitive.

Expanding Global Footprint. The marketplace for outsourcing is far more varied than it was a few years ago, with competitors of all sizes operating primarily from India, China, and the Philippines. Like their clients, they are spreading globally to make the most of international diversity, balancing the capabilities, language capacity, cultural affinities, and cost structures of a variety of regions. Armenian companies can gain a great deal by learning new technologies.

Increasing Sophistication. It has taken years for outsourcing to grow up. Analysts have long predicted that outsourcing would evolve beyond the commodity services that have been its bread and butter and into areas that are more critical to the global success of customers. Armenian firms would greatly benefit by learning international level standards like ISO 9000.

The Future of outsourcing for Armenia

Interoperable, Commoditized Services. It is our opinion that the outsourcing market is evolving to become significantly more dynamic and accessible for Armenian companies. We envision that outsourcing eventually resembling a utility computing model, where services are purchased à la carte, as needed, without costly up-front investments and transition times. Instead of having to go through the formality of sourcing contracts with long, fixed terms, we’ll buy services as one-time hits. This is where we feel an innovative Armenian firm can differentiate their company.  Three years from now, customers will be able to say, ‘I just want a commodity accounts receivable billing service.’ That doesn’t exist today very often unless you are SAP, Oracle or IBM.  In the future, instead of committing to a five- or 10-year agreement for accounts receivable services, customers will be able to plug into the service for short-term needs.

Many will be purchasing these as a service, bluing the line between outsourcing and purchasing a product. Before this can become a reality, however, companies will need to let go of their proprietary processes and systems, and vendors will need to build capabilities and scale around a common set of standards. It is just an idea that you should be thinking about. How can I keep the stability of outsourcing work, while at the same time have a revenue stream of creating my own product. THINK ABOUT IT.

This post is also available in: Armenian