How to effectively engage with a software-services provider
March 31, 2015  

Supplied by Jen Sanderson from entelect2013

Tim Kroon (Entelect Software: General Manager)



As a decision maker within your company, you may be faced with the challenge of whether or not to bring in a software-resourcing partner, and how to effectively utilise this partnership to structure a software development division that incorporates your goals, priorities and values.
Failed engagements can be costly in terms of effort, time and, of course, money. Meaningful relationships, on the other hand, can save you all three of these but they require commitment from both sides. Following these steps will ensure that you start these engagements on the right foot.
 
1. Find the right partner

Identifying the right partner is an exercise that can cause an organisation to reflect on its own culture and objectives. Identifying a partner whose values align with your own company’s is important because the individuals who embrace those values, will be an integral part of your project teams.

To determine which service provider is best suited to your company’s goals, there are a few questions you need to ask to determine how serious the provider is about its staff and approach:
  • How strong is the company culture and identity?
  • Does the provider performance-manage its staff in a structured and meaningful way?
  • How does the supplier drive positive behaviour in its organisation?
  • What kind of continuous-improvement and career-development processes does the provider have in place for its staff?
  • Does the provider have technical expertise on your technology platform and implementing the type of solution that you are expected to deliver?
  • Does the provider have a strong track record of delivery with companies similar to yours?
  • What other services and value-adds does the company provide?

The answers to these questions should inform your decision on partnerships. Without well-thought-out programmes covering these areas, your provider could end up being nothing more than a labour broker. Companies whose core function it is to connect talent with end-users are more likely to let borderline candidates slip through the process in order to meet your demand. More importantly, they may not be able to effectively solve software-development environment challenges. There is generally a very weak retention rate at these companies and a poor, or even absent, sense of employee engagement. This means that their HR challenges become your HR challenges and their churn becomes your churn. With large-scale offshore companies, this problem is further exacerbated by visa and immigration issues, sometimes poor technical quality as well as communication and cultural barriers.

There are some software-development companies that have a well-defined company culture and a comprehensive collection of experience that comes from managing large-scale software projects across multiple industries. Forging a strong partnership with an experienced software company will allow you to leverage a deep technical skill set as well as a dynamic collection of experience, distilled from years of working with peers and competitors. Whether it is effective knowledge-sharing through collaborative techniques, formal training programmes or implementing DevOps, these suppliers can guide you through the process and will be incentivised to do so if the relationship is meaningful to both parties. At Entelect, we often find that clients who recognise the value of our relationship and leverage our experience often gain the benefits of a more flexible model, optimised rates and an implicit advisory relationship.

The size of the company can play an important role, too. Larger service providers have a focus on scale and aggressive growth. The upside of such providers is that they can offer scale where smaller companies cannot. This can, at some levels, lead to an ‘anyone-goes’ approach because the scramble to assemble teams at scale can pose a challenge. However, the strategy is usually to compensate for the weaker individuals on the team by placing strong, experienced team leaders and development managers to pick up the slack and act as quality gatekeepers on the project. Smaller companies usually place a greater emphasis on growing cautiously with the right fit of individual and technical skill set because their ability to take on risk is limited. These companies will also have different priorities. As a growing, young company, the focus will be on maturing internal processes, building a company brand and identity and delivering on a smaller number of key accounts.

2. Begin with the intention of partnering
One thing is certain: you will be competing for priority regardless of the service provider you choose. It is always a good idea start your discussions by making it clear that you are interested in forging a partnership that will be mutually beneficial to both companies. If the provider is not the right partner, this will become clear with time. It is perfectly acceptable to start with a thin initial commitment as long as there is an understanding that there is a partnership on the line at the end of that contract.

Most software development companies have the challenge of demand outstripping supply and they have to prioritise their resources across multiple clients while balancing their commitments to their clients and to their business. This means that they need to be sure that they are making the best decision for sustainable business in terms of where to invest their efforts and resources. When clients are looking for short-term, quick-win relationships, they are more unlikely to prioritise the requirement.

 A successful partnership requires transparency on both sides, and your partner should be held accountable for its performance. Things do not always go to plan in these partnerships and providers do not always get it right – having a partner who is willing to recognise failure and take meaningful remediation steps quickly will be a great asset to you. Whether it is having a dedicated account manager who is always available to take your call, or a direct line to a senior manager, having access to swift and flexible remediation options will help you to deal effectively with turbulence and to hold your partners accountable.

 3. Deploy careful negotiation tactics
Negotiating engagement terms and rates is healthy and a great way to manage the performance of your partnership. However, it is something that should be done carefully, and in such a way that takes into account the scale, potential and value of your current relationship. If priority and quality are your concern, you may want to hold off on aggressive negotiation tactics until your partnership has matured because this could have a very real and direct impact on prioritisation and the level of service that you receive. On the other hand, if you are not happy with your service provider, you can use aggressive negotiation tactics to motivate the provider to a better place of service. As a client procuring services, you have the unique ability to motivate and manage the performance of your provider through opportunity and negotiation. Using metrics such as market-related rates, opportunities, performance of individuals and service levels are all great inputs to the negotiation process.

4. Provide a fast track through the red tape
Most corporate IT divisions have internal screening processes that include a combination of online automated tests, assignments and interviews. The process can be complicated and protracted, and is a main reason why candidates take up offers at competitors or service providers. This can also be a turn-off for software development companies as it means spending more billable time pushing through red tape. More importantly, your screening process might focus on different strengths from your providers, which means that you may screen out potentially great candidates whom your provider highly recommends.

 If you are comfortable with the level of service from your providers, it can be hugely beneficial to use a fast track through the red tape. Of course, your provider must first earn this privilege by proving a strong track record of providing high-calibre resources and services to you.

Attributes such as strong problem solving, a solid foundation in computer science and object-oriented programming principles are important for software companies who operate across multiple technology platforms and industries. A corporate IT division that utilises specific frameworks may look for individuals with specialised experience on that platform or framework, and potentially screen out provider resources without adequate experience on that platform. There may be a differing ideology here that puts you and your provider at loggerheads – specialist versus generalist. Given that the provider has your interests in mind, it may be time to have that discussion with them in order to understand why they believe that generalist skills will work in your environment and to be on the same page with your approach. Being open to stretching your technology skills requirements might play to your advantage and allow you to build stronger teams, faster.

Resource availability can last anything from minutes to days in the software engineering world, but seldom weeks or months. A company’s priority is to make firm commitments on its resources as quickly as possible and to minimise bench-time. This can often lead to a first-come first-served scenario. If you have been sent a proposal for a team of developers, try to turn it around as quickly as possible to secure the resources. If your provider is being slow and non-committal, do not hesitate to hold the company accountable for your deliveries – the provider has an obligation to enable your organisation.

5. Own the relationship
HR departments are great at facilitating the recruitment process for staff but they tend to be disruptive when dealing with specialist resource providers, such as software companies. In some cases, this comes down to a combination of poor relationship management (remember, they are dealing with a high volume of recruiters, candidates, clients and providers), lack of prioritisation (in certain circumstances they are providing HR and recruitment services for many business units) and a conflict of interest. The relationship with your provider needs to be managed carefully in order to maintain value and priority and to deal with issues or concerns effectively. If you are in a position to transform the way the HR works with strategic service providers, you will benefit by training them on the challenges you, as an IT department, face and the value of certain provider relationships. In this case, involving HR in the process and ‘coaching’ them to facilitate the relationship may introduce a cultural change that could result in better provider management within your company. If you do not have a say in how services are procured or managed, a better approach is to maintain a direct channel with your service provider and be a buffer between the provider and HR.

6. Integrate contractors into your team
When the team is on the ground and it is a co-sourced mix (both permanent staff and contractors), your next challenge is to ensure that everyone operates as a single team, unified under the same vision and goal. Unfortunately, some leaders openly voice their objections regarding contract staff and this can be extremely damaging to your provider relationships, team dynamics and the contractors themselves. Understanding why contractors are a necessary asset to your company will help to maintain an integrated culture. Conversely, and equally important, is that your provider has a responsibility to ensure that its resources are technically capable and a good cultural fit for your organisation. This combined message and understanding will ensure that all parties involved are invested in your company’s overall success.

In a market where talented software engineers are progressively scarce to come by and even harder to retain, software engineering partners can be an incredibly valuable asset to a corporate IT division. Recognising the importance of the elastic workforce, industry and technology agnostic expertise, and leveraging this through a mutually beneficial relationship can help give a new slick of paint to your IT culture, vision and ability to deliver on that mountain of project work in the pipeline. Investing some time in the relationships with your providers may be the most important thing you do in 2015.

 
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