The market research firm comScore analyzed mobile consumption behaviors and device penetration for the EU5 (France, Germany, Italy, Spain and the UK). Waverley found it surprising that Italy and Spain, which have been in the news for their stagnating economies, had amongst the highest mobile consumption behaviors. The biggest consumers as of late 2011 were in the UK.

Symbian, Android and iOS, Europe

ComScore also analyzed the European market for smartphones over the last couple of years (data reported below through July 2011). Between 2010 and 2011 Google Android gained 16.2 percentage points, almost exactly matching the market share lost by Nokia’s Symbian. Apple iOS and RIM both grew by about 1.3%. Current trends indicate that Symbian will continue to lose market share and disappear entirely by 2015. Also worth noting is the far greater growth of Android’s market share compared with Apple’s iOS.

Android and iOS, USA

ComScore’s analysis of the US market runs through February 2012. As of that date, Google’s Android has just passed the 50% market share mark (50.1%), a 3.2% gain relative to November 2011. Apple’s iOS market share grew only 1,5% in the same quarter, and now stands at 30,2% overall. iOS and Android together occupy an 80.3% share of the US smartphone market. Of the competition only RIM is managing to hang on with 13.4% of the market, down 3.2% from November 2011 to February 2012. Windows Phone market share stands at 3.9% and Nokia’s Symbian at 1.5%.

If you’re considering an IT outsourcing relationship, you probably have many concerns and questions. Here is a list of over 60 questions you may want to consider. Not every one of these questions needs to be asked, not all may be relevant to your situation, and your outsourcing candidate may not be able to answer them all, but this is a good place to start evaluating potential partners. We’ve organized the questions into a few sections.

Initial Screening questions

How long has the outsourcer been in business? Generally, the longer the better.

What pricing structure does the outsourcer offer and how does it compare with the competition? Price is important, but certainly not the only issue. Ask about pricing models that work for you and look for flexibility and detailed explanations of policy.

What physical security, data security and intellectual property protection methods does the outsourcer provide? Lots can be said here. Separate buildings are best with controlled access. Look for compatible and sensible IT process and policies for employees, and ask lots of questions.

What does a typical project startup phase look like? Find out how projects get going and see if you like how the outsourcer explains things to you.

How does outsourcer demonstrate they can provide the right technical experience needed for my project? Ask technical questions and look for relevant experience. Check references.

What is the turnover rate and how does the outsourcer retain employees? Low single digit turnover is best. If it’s more, find out why.

What does the commitment to a long term partnership look like? Find out what the outsourcer’s commitment is to you and your business, ask for examples and check references.

What similar projects has the outsourcer done? A good way to gauge possible success is to ask for examples of projects similar to yours and see how the candidate responds to your questions.

Is the work product created all “work for hire”? If you’re paying for it, you should expect “work for hire” without exception.

What project sizes does the outsourcer handle best? Outsourcing firms will best be able to handle certain size projects based on their size, experience, internal process, access to resources, etc.

How well does the outsourcer’s staff speak, read and write English? If your team expects to speak English, then check to make sure your partner can too.

How does the outsourcer hire and train new people? Look for recruiting techniques, ask about retention plans, training, classes, etc.

What kind of trust building exercises can the outsourcer provide? How does the outsourcer help you establish trust? Lots can be said here. Ask questions and see how they respond.

Can I visit my team any time I want? You should expect to be able to visit the outsourcers work place at your convenience.

Can I interview and select the team members myself? Some of you may find that you want to control the makeup of your team. Ask if you can do this. If not, find out why, and remember, an outsourcing relationship can work well whether or not you select your team.

Does the outsourcer provide insurance including errors and omissions insurance? The outsourcer should be able to be served legally in your country and carry insurance against general liability, and errors and omissions.

What are the credentials and experience of the outsourcers management team? Management is critical to being successful in any endeavor. Ask about your outsourcer’s management team and check them out.

Can the outsourcer provide access to global talent? If so, where and how? Find out how the outsourcer can provide you with access to people you could not otherwise find.

Can the outsourcer provide both local and offshore resources? There may be times or projects that require use of local resources. Can the outsourcer help you here?

Does the outsourcer follow local rules and regulations with regards to how it pays taxes, pays its employees and runs its business? Make sure all rules and regulations are followed. The last thing you want is to run into trouble that is not your making and that you have no control over.

Does the outsourcer have any complaints filed against it? Check out various agencies and search for telling information.

Can the outsourcer think creatively and work to really impress you? Make sure your partner is capable of highly creative independent work. You want your partner to work just like you do.

What kinds of mitigation strategies has the outsourcer put in place to reduce corruption, theft, etc? Ask about these unsavory issues and understand how the outsourcer has reduced or eliminated their impact.

How stable are the governments and countries you are considering outsourcing to? Depending on an outsourcer in a risky geopolitical location should give you pause. Check out the situation with your outsourcer before proceeding.

Engagement

How does the outsourced team engage with me? Find out how the outsourcer really intends to work with you.

How does the outsourcer learn about my business and integrate with my existing team? Will your outsourcer take time to learn how you work, what you do and how to work most effectively and efficiently with you?

Can the outsourcer’s team provide with both time and materials and fixed bid engagement styles? You may prefer one engagement style over another, so ask what your outsourcer can do, what they recommend you do and how flexible they are.

How do I protect myself from losing critical information if the outsourcer can no longer provide service to me? If for some reason your outsourcer can no longer provide you with service, how will you transition your IP, critical business knowledge and work product to a different team?

How do I communicate with my team at the outsourcer’s location? Find out what communication channels are available to you for communicating with all the team members.

What kind of engineering management expertise can the outsourcer provide? Your outsourcer should be able to provide the proper management to make sure you are successful.

What process and procedures does the outsourcer use? How are problems treated and resolved? Give examples. Ask what problems your outsourcer has encountered and what steps were taken to resolve them. Be wary if they tell you everything has gone 100% perfectly.

Does the outsourcer provide shadowing capability so vacations or staff loss can be covered effectively and rapidly? What other methods does the outsourcer use to provide immediate replacement of team members? Find out how unexpected reductions in staffing are handled and be aware of the tradeoffs in terms of cost, flexibility, etc.

How will the outsourcer handle concerns I may have about the performance of a specific team member? Find out how your outsourcer handles situations when you are not happy with a particular member of the outsourced team.

What kind of on-going training does the outsourcer provide to its employees? Ongoing training is important for many reasons. Ask how your outsourcer handles updating the skills of its employees. How honest and direct is the communication?

How are project issues handled especially when they affect budget or schedule? Questions about budget or schedule issues are often the most difficult ones to discuss and manage. Ask how your outsourcer handles these issues and ask for examples.

Can representatives of the outsourcer be contacted anytime during my regular work day? If your outsourcer is working in a time zone greatly different from yours, can they provide a way to ask and answer questions any time during your regular work day?

Can the outsourcers management team be available to me if needed? It’s good to be able to talk to the senior management from time to time. Ask if they are available and how they participate in your projects.

Does the outsourcer meet the requirements of any process standards organizations? You may feel more comfortable if your provider is compliant with standards such as CMM or ISO. Ask about their policies regarding process compliance.

Tools and Monitoring

What kinds of tools can the outsourcer provide to streamline projects and make them run as efficiently as possible? The use of tools to facilitate process improvements and general workflow can be critical. Find out what tools your outsourcer uses, how they use them and how they can integrate with your existing processes.

Does the outsourcer provide the option of a client portal for tracking and running projects effectively and efficiently? Email, office software, telephone and Skype may not be enough to properly run your project. Ask if the outsourcer has taken the management of project artifacts and communication to the next level through a secure client portal.

How can I be sure the outsourcer’s team is really working on my project and that I have the best possible people? You may be concerned about making sure your team is working for you and that you have truly great people. Ask how your outsourcer handles these issues.

What kinds of project artifacts does the outsourcer generate and how are these presented and tracked? Project artifacts are not only important for future teams and work, they are imperative for the proper handling of your project. Ask about the details of what data is generated during the running of your project and how that data is handled and communicated.

How accurate are time estimates generated by the outsourcing team and what does the outsourcer do to create accurate schedules? Ask about your candidate’s time-estimating ability and how the outsourcer creates schedules. These are critical skills for success.

How do I track what the outsourcer is doing and what is happening on a daily basis? Find out if you can see status on a daily basis. You need to feel comfortable that your project is running smoothly.

Consulting

Can the outsourcer provide me with help defining and managing my engineering process? You may already realize or discover along the way that the way you work can be improved. Can your outsourcer help you be creative and follow an engineering process that works for you?

Can the outsourcer help me with more than just implementing a spec? Can your outsourcer help you define your user experience, create artwork, test designs, figure out the proper technology stack, etc?

Process and Services

What engineering process variations can the outsourcer support? You may have a particular interest in Agile, RUP, spiral, waterfall or other process. Talk to your outsourcer about processes they support.

Can the outsourcer help me localize my product to a number of languages including EFIGS? Don’t forget to ask about internationalization and localization if those issues are pertinent to your product or service.

What kind of UX/UI design skills can the outsourcer provide? You may need expert help designing the user experience, the application’s information architecture, the visual layout of screens, etc. Find out if your outsourcer can support you.

Can the outsourcer test designs before implementation? Check if your outsourcer has the capability to test product designs with potential users, get feedback and make appropriate revisions.

Can the outsourcer provide maintenance and support for completed projects? You will most likely need to maintain and support your product or service once it is commercially available.

What kinds of SQA can the outsourcer provide? How does your outsourcer test engineering deliverables? Verify that your outsourcer can help you design test plans, handle load testing, and be creative in looking for obscure problems.

What does the outsourcer do to help me if my project is very complicated and my organization does not have the technical expertise to do the project ourselves? If you lack the internal ability to do the project you are considering outsourcing, you may have trouble describing to your outsourcer exactly what needs to be accomplished. Find out how the outsourcer can help you in this situation.

Can the outsourcer provide teams that are comprised of resources that are working in different locations? You may need resources in different locations. Find out if this is the case with your project and how the outsourcer works with geographically diverse teams.

What does the outsourcer do to ensure the fastest time to market? Time is critical for any business.

How does your outsourcer handle your desire to work quickly? Can the outsourcer provide me with top talent superstar developers? How? Many startups begin with a small team of top developers. Find out how your outsourcer will continue to supply you with great people as your project grows.

How does the outsourcer integrate new experiences into their process and service delivery? Find out how your outsource candidate turns experience into increased productivity and improved delivery.

Can the outsourcer provide services ranging from team augmentation to complete turnkey delivery? As you grow, your needs may change and you may run concurrent projects that engage using different styles. Find out if your outsourcer is compatible.

Internal Issues for Your Own Consideration

How do I rate my own organization’s ability to partner with other organizations and how can the outsourcer help me improve internally so partner style relationships will work effectively? Your internal organization will need to be able to work effectively with partners in order to be successful in an outsourcing relationship. Are you ready?

Do I know exactly what I want to do and can the outsourcer help me answer this question? If not, how does the outsourcer help me ask the right questions about my own goals and objectives? If you don’t know precisely what you want to build, it’s going to make it much harder to work with an outsourcer. Be honest about your knowledge and see how the outsourcer can help you.

What are my reasons for wanting to outsource in the first place? Make sure you understand why you want to outsource. Leveraging the experience and talent of another organization are two common reasons, but you may have others. Discuss these with your outsource candidates.

Contrary to popular wisdom, offshore outsourcing can and should be successful. When things are running smoothly, outsourcing delivers many benefits. We’re listing some of them here.

Allow you to take advantage of talent you could not otherwise find yourself. Your outsourcer may be able to deliver specific experience you need and can’t find within your own organization and also bring the best developers from around the world to work on your project.

Build your teams faster, possibly with instant-on capability. Working with a competent outsourcer allows you to assemble a team quickly, drawing on the outsourcer’s internal team and expertise to find the right resources to get the job done.

Faster time to market. Bringing a team on board expeditiously and working with skilled resources enables you to get to the finish line faster than you could do it yourself. The outsourcer’s internal process capability and management skill also brings time to market benefits when comparing internal vs. partnered development.

Lower cost. One of the main reasons businesses outsource is to lower cost. Cost is not the only factor for success in outsourcing, but it is a driving force for why business start looking at an outsourced relationship. Look at your true cost carefully. The initial difference between internal and external cost may not be as large when comparing final costs, but effective outsourcing relationships should conserve precious capital.

Flexible team size over time. Outsourcing allows you to change the size of a team according to need without going through the hiring and layoff cycles that traumatizes your own organization. Working with a good outsourcing partner should provide you with increase resource flexibility over what you can achieve internally.

Improve your internal development processes. Working with a good outsourcer should help you discover new methods for improving your internal processes and getting your work done. Improvements can come directly or indirectly by observing how the outsourcer works.

Enable your team to establish multiple kinds of beneficial partner-style relationships. Once your team is set up to outsource effectively, you should be able to leverage that skill to other outsourcing engagements and increase the chances of success with future outsourced projects.

Focus your own team on what you really do best. Outsourcing some of the tasks or task components that you may not be most effective at completing allows your team to focus on what it does best, enabling you to differentiate your business and compete most effectively.

Enable innovation by allowing you to try ideas more quickly and efficiently. Working with a quality partner who can improve process and work quickly and cost effectively can enable innovation by allowing you to try and discard bad ideas and discover and focus on the good ones.

Attrition is one of the biggest enemies of engaged partnerships and long term outsourcing success. If your outsourcing partner is losing 30% of their employees annually, then all the effort you spent building your outsourced team is in jeopardy. Low turnover is definitely a critical metric for outsourcing success and you should investigate attrition rates before making a commitment to a new outsourcing relationship. Your partner’s attrition rate should be low, though zero is not realistic and you should probably be skeptical of anyone who tells you their rate is zero. A low single digit number is what any competent software outsourcer will shoot for. How is this achieved? Consider the following hiring practices and employee retention activities:

Hiring

University contacts. Maintaining good contacts with local universities can greatly help recruitment and the search for top talent.

Teaching. Teaching is a great way to expose yourself to students and find top-rated students.

Contests. Running a contest can be an excellent way to find strong candidates.

Referrals. Referrals generated internal to the outsourcer are a great way to bring in new people.

Hiring great people at any time. Your outsourcer should be able to take advantage of the opportunity to hire top people when they are available, even when the outsourcer does not have an immediate need for the candidate.

Retention

Pay. Everyone wants to be paid well. Your outsourcer should be aware of the compensation packages and compensation strategies necessary to attract and maintain a staff of excellent people. Long-term compensation planning is important, evaluating local and regional economies and examining changes to government regulations that could negatively effect compensation.

Interesting projects. Your outsourcer should have interesting projects to work on. Software developers everywhere enjoy working on cutting edge deliverables that will be used by lots of people.

Management. Good management is very critical to employee retention. Management should be engaged, supportive and decisive.

Career management. The direction of individual contributors careers is also a critical management issue. Planning out a career path is important, especially so in certain cultures.

Work load. No one wants to be subjected to continual work overload. Sometimes extra effort is required, but it should not be the normal course of business.

Project fit. Making sure your outsourcer has assigned resources to projects based on interest, technical fit and interpersonal communication abilities will go a long way to keeping attrition low.

Project rotation. Occasional rotation of staff to new projects is a good way to keep things interesting and provide new challenges and opportunities. Rotation needs to be done in a way to maintain your investment in the skill level of the outsourced partner’s team.

Training. Outsourcers must provide training opportunities to keep staff sharp and up to date with technology developments, process improvements, etc.

Quality of customers. Working with great customers is a good way to keep attrition low.

Community Participation. Getting involved and making a difference in staff’s community interests is a great way to make employees feel supported and build links to the community. Definitely a plus for employee retention.

Finally, team-building activities, engaging off-sites, organizational coaching, and travel abroad to work with partners are all part of a good employee retention plan.

Every new outsourcing contract discussion must cover pricing. It’s always the subject that people dance around and are often reluctant to talk about.

There are so many ways to price services. Most high-end professionals work for an hourly rate. Some work on a retainer or monthly for a guaranteed number of hours. Some work on a fixed-bid project basis. And a few will even work for equity. Regardless of the billing agreements, charging for services can test the trust in any buyer-provider relationship.

But shouldn’t pricing be as easy and transparent as every other part of the relationship? Don’t you want to feel confident that you’re not only getting a good deal, but that you can trust your software service provider to bring their best people and practices to the table?

You’re running a complex business and don’t want surprises. You may be pleased if your provider worked extra to meet that important deadline, but not so pleased when you receive a bill that is 40% more than what you expected.

What most customers look for in pricing is this:

1. A predictable burn rate
2. A simple pricing structure
3. Open communication and transparency when changes to a project (e.g. requirements) affect pricing

There is more than one way to meet these criteria. The approach Waverley uses (after a lot of experimenting) is to use time-and-materials pricing<>  and a simple, inclusive hourly-rate pricing structure.

On Waverley projects we provide a team of full-time people and charge for those people on a flat-rate basis. This means that all costs are included except for obvious exclusions such travel, shipping, and special hardware or software that only you may have. Regular client management and onshore and offshore engineering management is always included. The billing rate includes insurance, computers, and a good place for our engineers to work. We can even keep the lights on through an emergency (some locations have large scale power generation facilities). Waverley continually invests to improve our service and tools. We travel to our offices to make sure all is working properly.

As I said, this isn’t the only way for you to feel that you are getting a fair deal from your outsourcer. The main thing with pricing is to be confident that your outsourcer is meeting your need for predictability, simplicity, and transparency.

Let’s say you’ve decided that outsourcing some portion of your software development is right for your company. The next question you might be asking is, what locations should I be considering? We might first point out that your selection could easily be more about what partner to select. Many outsourcing vendors have development teams in multiple countries, and great teams can be found all over the world. Then again, the location of an outsourced engineering team will have implications with regard to time zone, culture, and compatibility with your own team’s standards and practices. You aren’t alone in thinking that location is an important consideration.

Since location matters, let us pass on some things we’ve learned. We’ve found and worked with great teams in India and China, but the time zone, language, and approach to creativity have often been a poor match for the fast-paced proactive mindset our clients need to augment their internal software development efforts. Certainly the talent pool and prices are attractive, but clients are usually more interested in efficient, higher-quality teams even if they cost a little more.

Teams from Eastern Europe often provide the best balance for such clients. As in other locations, it’s important to find the right balance of quality engineers, costs, and stability. But the overall profile of Eastern European engineers and managers are, in our experience, a good fit for even the most demanding US and EU-based projects.

A short history of outsourcing

In the 1990’s organizations spent a lot of energy looking for ways to reduce their costs so they could put more focus on their core business. Service firms sprang up to meet this demand to cut costs – human resources, accounting, security, internal mail distribution, catering and of course, information technology services.

As companies searched for the lowest cost providers of these services and as telecommunication costs plummeted, it wasn’t long before U.S. companies were contracting for support services in other countries – India, China, Eastern Europe, and the Philippines. Initially the prices were so low, especially in India and China, that labor arbitrage was the primary motivator. Sometimes even at the expense of quality. Or with lots of management frustration stateside as they tried to make these relationships work.

Most people would agree that the days of outsourcing internationally only to achieve lower labor costs are over. As more companies entered the business in each country and began to compete with each other for labor, costs began to rise. Now companies can achieve some cost benefit from outsourcing, but it is more modest than it was five or six years ago.

From low-cost-provider to strategic partner

In the meantime, outsourcing companies have improved the quality of their work and their ability to serve clients, so they can continue to make a convincing case for their services – slightly lower costs, higher service quality.

In a 2008 CIO article, Arpit Kaushik pointed out another feature of offshore outsourcing. The focus of the article is a caution to customers of offshore IT outsourcing to beware of exaggerated cost reduction claims by outsourcers. He advises the reader to make appropriate comparisons, to look for hidden costs, and to make the distinction between theoretical and real impact.

Towards the end of the article, Kaushik makes a comment that reveals the direction of offshore outsourcing. He cites a recent paper from a “leading offshore outsourcer” which revealed this tidbit: The “bulk of the benefit actually comes from revenue improvement rather than tangible cost savings.” This comment reveals that the current stage of offshore outsourcing is defined more by the desire to seek strategic partnerships than cost savings alone. Cost savings will only get you so far; at some point companies have to improve long-term profitability by finding opportunities for growth and by increasing their revenue.

Certainly we’ve seen that’s the case in our business, software development outsourcing. When we first started, customers were mainly focused on labor rates.

Today they mostly ask us what we can do to improve the software they are developing and shorten their time to market. Customers want much more than skilled engineers at a lower rate. They want to know how we manage large, distributed projects, how we manage project risk, how easy it will be to do business with us.

This is a challenging but exciting direction for software development companies. Challenging because it’s more difficult to be a strategic partner than a commodity service provider. Exciting because the projects are more interesting for our engineers and foster closer relationships with our customers.

On a recent family road trip through California and Oregon, we lost track of time and then found it hard to find a restaurant that was open after 8 pm. While driving around town, we ended up at a train depot just as a long and slow-moving freight train was rumbling by. The depot was a combination Amtrak station and a freight railroad support location with offices, staff and rows of railcars waiting to be moved to their destinations. We were hungry, a little bit lost and tired from a long day of traveling and wildlife watching, but my five-year-old son was especially enthralled and wanted to watch for a bit. So we did.

We waited for the train pass in the last light of the evening, well after the sun had set, with the string of lead engines impressively shaking the ground and the following cars clanging by. To our surprise, the train stopped just as a locomotive pushing from behind stood opposite the depot. Three people came out of their offices and started to work on uncoupling the engine from the back of the train. My son was very interested and vocal about watching – you know how young kids can be vocal – and to my initial dismay, he attracted the attention of the three guys working on the train. I thought “uh oh”…

We were surprised again when we were invited to come watch up close. Our host walked us to the front of the locomotive, we greeted the other guys and he invited us to climb the stairs. Pretty cool. We keep on going, next through the crew door and up more stairs to the inside of the operator’s cab. Even cooler. My son got to sit on the left seat, turn the main headlights on and off , honk the train’s horn then watch the crew change a switch on the track and move the locomotive off to a siding, much to everyone’s delight. The crew were super friendly and pleased to explain how their impressive machine worked.

Afterwards, we accompanied the depot manager to his office, got a few souvenirs and got ready to say goodbye. One of the engineers came in and the manager briefly switched his attention to business. Before leaving, they filled out some forms and signed them. I noted with interest that the forms were carbon copies, not forms on the Web or on a handheld device. The last one was peeled off the back and handed to the engineer. “Goodnight, have a safe drive home.” We said our good byes too and headed back to our car. Our excitement during the last hour masked our increasing hunger and now we scrounged some snacks in the car to keep us going.

I started to wonder how the railroad worked, how they handled crews signing in and out, how they scheduled people and freight and what their IT infrastructure looked like. Could it be improved? Could Waverley help a large industrial company figure out how to be not just as good as the rest but to rise above the competition through IT? Could we apply our skills in designing and rolling out complex multi-part applications from concept to final production to help such a company? How many other companies needed expert guidance to really rise to the top of their market segment?

We’ve been working on several large projects that remind me of our experience in the train yard. I know it’s possible to do a great job partnering with our clients to not just build the product but define it: making sure what we define and build meets clear objectives. And we know that focusing on delivering value is critical – this means doing the work in a timely manner and focusing on top priorities first. It means involving all stake holders and constantly evaluating and reducing risk.