Is the Outsourcing Model Broken?

I caused quite a stir when I wrote the post oDesk vs Elance: Why It’s a Battle YOU Won’t Win with related followups here and here. In total, we’ve seen over 130+ comments with freelancers and businesses telling their side of the story. Some have failed, and some have succeeded. Instead of commenting, reader John D. decided to email us with his story with regards to outsourcing. It’s an interesting read, let us know what you think in the comments below.

Enter John. 

Outsourcing has come a long way. In 2014, you can now go online and hire someone in India, Switzerland, Pakistan, China, or France to write a PHP script or create a brand-new wordpress website, or write a fully blown software application for any purpose imaginable. In the morning you might have an idea, develop it over your lunch break, while you work your 9-to-5 job, and draft out the requirements and sketches in the car as you commute home. After you tuck the little ones into bed, you pull your MacBook on to your lab and decisively hammer away at the keyboard until you’ve fully captured the essence of the project you’re about to take on.  Then you zip it all up and shoot it out to the outsourcing community on oDesk, ELance, or the like, and hope for the best.

Fast-forward three days.

You’ve got about 80 applicants per platform, and half of these people haven’t even read the document you put together to explain your project. One guy tracked you down on Twitter and lit up your phone at 3 AM, much to the chagrin of your wife. Another guy (stalker) called you at work and somehow ended up getting transferred to your coworker who then asks you about this side-project you’re doing in front of others, (awkward moment). You create a system for capturing all the different estimates that they’re giving you in Microsoft Excel, (sort by, filter, etc. etc. etc.)… And you finally come down to a couple of reasonable looking estimates that were sent by people who don’t look completely incompetent. What the heck, let’s just give it a try… see what happens. Down payment of 20%? No big deal.

Fast forward three weeks.

The contractor you hired has been driving you nuts. When you first hired him, you asked if he had any experience in using php and mySQL databases. He said “Of course of course yes so much experience – many many times”. Now he’s apparently not able to perform an inner join on a couple of tables to retrieve even the most simplistic of data out of this database. And his PHP code is horrendous. Deep breath, focus.  It’s game time. You wiggle your shoulders, crack your knuckles, and hunker down to type up a very detailed and specific set of instructions (with a sharper tone) for this special person in your life to wake up to out there in Uzbekistan, (or wherever he’s from).

2 days later.

Now you’re just pissed off. He hasn’t responded to any of your emails, calls, or Skype chats. This is not going well. You start thinking about your options. You could cancel the project and deny further payment, or you could extend the proverbial “one last chance.”

Either way you’re screwed.

Because the reality is, you’ve already lost a month. And time is precious.  You could’ve gotten it done in a week if you were working on it yourself. The whole purpose was to save you the time and money, and find someone somewhere who magically good get this thing done for pennies on the dollar. Somehow, through the amazing power of the US dollar, I would snap my fingers and with a very little output of capital, materialized a beautiful brand-new website out of thin air. The code would be perfectly formatted, with zero errors when I compile it. All of the JavaScript files will be perfectly compressed, and would be compatible with all the major browsers on Windows and Mac platforms. The design of the website would be phenomenal, using all the related to greatest bootstrap HTML widgets and WordPress plug-ins. It would be amazing. Then the world would see my idea for what it truly is… Brilliant.

But that’s not reality is it. The truth is, outsourcing is not that simple. We lie to ourselves every time we try to use ODesk and ELance. That somehow, somewhere in the world, there are programmers with incredible talent that work for hardly anything, and would be so very grateful to just sit down and focus 100% on my little project. They would have no other distractions, incredibly easy to get a hold of, and be incredibly cost-effective. If they say they were good at a certain technology, that would mean they are really expert level, practically inventing the whole platform themselves. If they say they would have my project done by the end of the week, it would really be them just being humble, because five hours later they’d send me a zip file with everything completed. Lies. It’s a scene right out of “dude, where’s my car?”

Snap out of it. I’ve come to realize over last decade that outsourcing work over the Internet (specifically, website development, software development, graphic design, etc.), is far more trickier than anyone wants to admit. It requires the customer to have a specific skill set, and hands-on software development experience, to hold another programmer on the other side of the world accountable and make them deliver on a project. You have to have the “BS-meter” turned on at all times, and you have to connect with them on a daily basis. To truly manage the outsourcing process successfully, there is a price to be paid. It’s more than what you pay the programmer. It’s the overhead that it takes to facilitate and punch through obstacles in order to actually get something done. (Oh yah, and there’s this little idea called the Software Development Lifecycle… which typically goes out the window when you want to outsource to somebody in China for 6 bucks an hour). But the SDLC is too much to observe (requirements doc, design doc, workflows, flowcharts, code reviews, quality assurance, etc), when YOU are the one paying for it. So out the window goes all of the battle-hardened ways and Jedi practices. Fail.

So this is the part where I’m supposed to come up with some great wonderful solution. I’m supposed to tell you that there’s this magic pill, or new startup somewhere that has told all these problems. Not quite.

But I have found that one of them shines brighter than the others.  They’ve stated the problems that we all know are there, and have implemented a decent amount of functionality and ‘process’ to make it seem almost achievable. That start up does exist actually.  It’s not ODesk or eLance, (who, having merged, now share the same Board of Directors and investment pool). It’s actually ziptask. Ziptask: I am thoroughly impressed with these guys. They’re raising millions of dollars in capital and are promising to be on par with ELance and ODesk over the next five years if things go right. What peaks my interest specifically, is this whole notion of “fully managed”. The idea that I can receive premium level outsourcing services, leveraging the same knucklehead resources internationally, but with this additional layer of full service / westernized project management between me and them. Whereas, I don’t have to squint when I’m listening to them speak, or fuddle with 300 emails back-and-forth. While still imperfect, having a competent project manager between me and all the messiness of outsourcing is probably as close to ideal as I can think up.

So I tried it out. I sent in a project to ziptask. I put the ziptask project manager on my favorites and my cell phone and he actually picks up when I call. I only paid for the hours I use, but I don’t mind. He get stuff done. It’s so worth it. But what was really interesting was when I saw programmers he hired to work on my stuff in a Google hangout truly held accountable for their performance and deliverables. I don’t think I’ve ever seen that before. The jig was up. No more ripping people off. If programmers don’t deliver milestones by certain date, they basically don’t make a dime. These project managers fire people and go find replacements without blinking.  I tried not to smile but the experience was actually therapeutic for me. Anyways to make a long story even longer, the jQuery animation I needed for my website was delivered, and I paid 3 different installment milestone payments of a few hundred bucks ($691) along with some project management fees… Not bad. But the best part about it wasn’t just that I got the project completed, :) but that I barely had to do anything.  The “project management layer”, as an insulated solution is what ODesk and Elance **should have** become, but never did. Their Board of Directors probably barked out words like ‘enterprise sales’ and ‘accelerated growth’, but stopped short of truly solving the problems that have tortured this marketplace for 10 years now. Sure, they’ve addressed fraud prevention by using escrow accounts… and yes, they’ve created a way to perform international payroll… but not much else. They’re not functioning as start-ups anymore. And they’re not truly trying to talk to customers. At least not when I called. Unless you are a big company, with big money to spend, their local sales department is unreachable. Me thinks their goal is to put as much distance between them and the small biz customer as possible, because that time costs real money. The outsourcing of websites and software is not a mission or a passion to them. They lost sight of the goal. Now they’re corporate. Not that that’s all bad… But most of it is. Innovate or die. </rant>

Anyways. +1 on ziptask.


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8 Responses to “Is the Outsourcing Model Broken?”
  1. Sandra Collier March 3, 2014
  2. Craig Roviss March 3, 2014
    • Swathi March 2, 2017
  3. remote .net developer May 15, 2014
  4. Piotr June 7, 2015
  5. Tom October 26, 2016
    • Swathi March 2, 2017
  6. Moises Breitung October 31, 2016

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