Monthly Archives: October 2013

Pretend to be a client and ask your staff questions

Categories: Outsourcing Articles | Tagged , | Leave a comment

Can you disguise your voice and pretend to be a client? Or sit next to the phone and have someone else call your company. See how useful your staff is. Are they helpful and knowledgeable? Or are they merely pleasant, but yet give wrong answers to people’s questions. Sound familiar? Do you even keep track? Most companies don’t keep very good track. One company was very bad in the answers department. I asked three different staff members the same question and got three different answers. Good god! I hope your company is not like this!

You need to test your employees regularly to see if they know what they are doing. Don’t wait for your clients to call and complain. Your clients are not evenhanded. Some are the complaining type and complain about everything. With others, it is always personal. You need someone objective to analyze your staff’s attributes.

Just write down a bunch of questions and track what type of answers you get from whom.

Do this on graph paper for best results or on a spreadsheet.

Good luck — start doing this today.

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A worldwide shortage of good .net programmers

Categories: Software Development | Tagged , , , | Leave a comment

The old days
It used to be easy to hire programmers for many years, but recently a bubble in the .net programming market has formed, making it hard to get any programming resources at all, even if you pay top dollar. The only way to get work done is to offshore the work to Eastern Europe or India it seems. But, even they have a shortage of the higher end programmers.

But, when will this bubble end? Maybe sooner than you think!

What is India doing?
India is churning out programmers faster than a sausage machine turns out sausages — or at least it seems. The big companies gulp up all the good ones too. In India there are tons of junior level programmers available, but where are the seasoned programmers? Gulped up! They exist, but they just are not available for consumption by smaller companies. However, as the years go on, all of the existing junior programmers will mature into seasoned programmers, and hopefully there will be too many programmers for the big companies to devour. Or, there could be a turn in the world economy where the big guys start laying off workers left and right. It is unpredictable and markets are always cyclical in any case. But, programmers grow on trees in India and that is not going to change.

The hidden giant!
The world looks at India when it thinks about software outsourcing. The Philippines doesn’t do that much IT outsourcing compared to call center work. But, what about China? China focused more on manufacturing for decades, but now is doing a lot more with IT outsourcing. Chinese companies tend to be larger than most Indian companies which is a huge difference. But, the key fact to understand here is that Chinese will work 16 hour days, and can be very efficient if they put their mind to it. If the Chinese decide to take over IT outsourcing, then in a matter of years, the game will be over. India is too lackadaisical to win the game. China will win and take most of the market with it. This could mean mass unemployment for American programmers and a glass ceiling for salary increases in India.

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What makes a good project manager?

Categories: Semi-Popular, Software Development | Tagged , , | Leave a comment

Most people think that someone experienced would make a good project manager. This is not always the case. If you don’t triple check everything and watch every detail, you can not be a good project manager even if you have 30 years of experience. If you can’t communicate well, you also cannot lead others. Experienced workers often lack all of the qualifications to be a good project manager. The problem is that a good business model consists of having a good lead programmer on staff to supervise the others.

If you have a team of programmers and the lower level programmers are sometimes a little sloppy, that is acceptable (although not desirable) assuming that the project manager catches all of their mistakes before they go too far. But, if there is any failing on the part of the project manager, the project can not get done efficiently (or at all).

A good project manager needs to know how to:
Estimate jobs, allocate resources, communicate, double check work, regularly confirm ETA and schedules, and more.

The irony is that the project manager doesn’t have to be a good worker, or a worker at all. Many good project managers do not know how to code. They might be able to read code, but they often do not know the language being used in a particular project. Their job is to lead, and not to work. Some people are better at grunt work while others are born leaders.

Just remember the following quote:
Those who cannot do — lead; Those who cannot lead, lead leaders! Those who cannot lead leaders become project managers at dysfunctional companies!

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An outsourcing company is as good as its worst worker

Categories: Outsourcing Articles | Tagged , | Leave a comment

Do you run an outsourcing company in Asia somewhere?

I bet you have an interesting mix of workers, right?

Some are geniuses, but others might be not so bright?

Imagine that you run a data entry company. Let’s say that I hire your company to do a task.

Let’s say that employee #1 handles my first request and he is okay. Let’s say I hire your BPO company to do another task and this time get employee #2. Great! But, on the 3rd try, I get employee #3 who is a liar and a cheat, not to mention lazy and incompetent. Let’s say that he bills me for double the work he did, and that his work was still not correct. Hmmm. In such a case, that one employee jeopardizes the reputation of the entire BPO company, and could lose the boss a client. Gulp?

So, we blame the worker for being dishonest and lazy, right? No! It is the boss’s fault for hiring a nitwit. After all, the nitwit is not in charge of the BPO company. They didn’t hire themselves. And, even if they did, it is not their fault for being a nitwit because after all, they are just a nitwit, right? I blame the boss. If I find out that a boss has a single less than standard worker, I would be very hesitant to do anything with that company.

Being realistic, I realize that most companies do hire a mix of empoyees, and most bosses just don’t understand the harm that their workers do to their company reputation. I HAND PICK workers at companies who I do business with. If the boss is stubborn and won’t let me, then they get fired just like that. I am smart enough to know that a bad employee can make my life miserable as a client.

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Small Software companies who lose a client as fast as they get one

Categories: Management | Tagged , | Leave a comment

America has hundreds of small software development companies that are in business to lose clients. Why are they so stupid? It beats me. The way I look at it, if you only have one programmer, then you probably have no business sense. If you had good business sense, you would know how to grow your business and you would have multiple programmers, right? In real life, the answer is not so clear. But, my experience with companies that have only one software developer, or a few new ones is as follows:

These tiny companies will fail to deliver on promises by one means or another. They will acquire a new client, put them on the back burner in order to service another client, and lose the new client. Why take on a new client if you are just going to lose them? It seems obvious that taking on new clients is a sort of insurance policy. These small companies have no sense in knowing how much availability they have, nor do they care. They take on a new client when there is no time in their schedule to service them and no plan to service them either. It is really criminal if you think about it.

The big problem is that these companies are typically short-staffed. How can your company grow when you don’t have the staff members to get any work done? You can’t. So, these companies get a client, lose a client, get another one, lose another one.

To grow a company, you need to get new clients faster than you lose clients. That way you grow. If you lose them as fast as you get them, it is like putting water in a cup with a hole in it. Not a good business strategy — but, try telling them that!

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The 2% rule; Only 2% of companies are worth hiring

Categories: Hiring & Firing, Semi-Popular | Tagged , , , | Leave a comment

Unfortunately, it seems to be a rule of thumb that service providers worldwide provide mediocre service as a rule. To find people who are above average is like finding a needle in a haystack. What I learned is that across national borders, my experience has been that 2% of service providers are good enough to be happy with. Those are bad odds. Now, with reputable professions like Attorneys or Doctors, the 2% rule would not apply. But, with software developers, notaries, plumbers, and other professions that I have had experience hiring, this rule seems to be realistic.

My experience with custom software development companies is that 1% get an A, 1% get a B, 10% get a C, and the rest get a D or F. That means that 88% are getting a failing grade. How does the world go around? Most of these bad companies don’t even answer their phone or answer emails. How can you run a business when you refuse to communicate?

The next part of the problem is that the top 2% of providers who actually are reliable, honest, and do a good job are generally busy and expensive. It seems hard to win as a buyer of software development services these days. Honestly, the only way to win is to have a big company and to have your own employees who you can control.

You might ask what the list of bad things that bad companies do would consist of. Here is the short list:
(1) General Dishonesty
(2) Padding hours or inefficient work
(3) Lying about whether their staff really works for them or are independent contractors or offshored labor. Lying about how many employees you have.
(4) Not giving the amount of hours of service promised
(5) Not meeting deadlines
(6) Not answering the phone
(7) Not responding to emails
(8) Answering correspondences, but refusing to give good answers to questions
(9) Inability to speak English, or the language that is being used
(10) Sloppy or dysfunctional work.
(11) Failure or refusing to follow directions
(12) Handing off your project to a less experienced worker

The problem is that there are twelve very common ways to screw up an outsourcing relationship. If an outsourcing company does even a single one of these bad things on the list on a regular basis, they might get a D or F in my book. To get a passing grade, you have to do everything right at least most of the time. Very few companies seem to have it together.

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Don’t hire an employee, hire 5 and keep the best one!

Categories: Hiring & Firing | Tagged , , | Leave a comment

Smart companies realize that their strength depends on having great workers. Good workers don’t grow on trees though. Good people normally already have a job. Those looking for work are usually not the best workers, otherwise they would be already employed. If you sort through the bunch, you find a few good ones — or ones that you initially think are good. But, you don’t really know if someone is good unless you have seen them work for a few months through good times and bad.

You can not see how well a marriage would work after the first date any more than you can see how an employee would function after the interview. In an interview they tell you what they think you want to hear.

So, it is good to try a few people out with the intention of getting rid of most of them. Of course, MAYBE you could keep two of your newbies if you loved them so much.

Do you ever ask yourself:

What would I do if I were Donald Trump?

I believe that if you ask this question to yourself regularly, you will tune into Trump’s consciousness and become a much better businessman. I have seen Trump on his TV show “The Apprentice”, and he takes business to a very sophisticated level. He seems to think of everything and can see all of the angles while the rest of us are just in a very deep fog of confusion.

I can try to guess how Trump would handle this hiring situation. He might initially interview two dozen people and pick six contestants. Then, he would have them work on test projects to see how they functioned. He might have them work in small teams to see if they worked well with others. He might analyze their final work and then ask more questions and assign them a grade of some sort. If you didn’t do a good job, then he would definately point at you and say:


I love it when he says that!

Do you put your new workers through a few tests and tribulations and then subject them to analysis?

Are you even paying attention? No? Well, that is how you end up with lousy workers that cost you your reputation. It is your own fault!

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Would you pay extra to have a better employee?

Categories: Hiring & Firing | Tagged | Leave a comment

Many companies are simply cheap. They want to save a little here, and save a little there. Let’s get office space in the worst part of town and save a few dollars. Let’s hire some workers that don’t charge much, so that we can keep our costs down. If your office functions and nobody minds being in the ghetto, then go ahead! Never mind what type of feng-shui your office will have, and how that will effect your future — you are saving a few bucks and that is what matters (for now). If your workers get the job done for less, that is great.

But, in the real world it is not always that simple to just pay less, and save a few dollars. You usually lose something when you pay less, unless you really know how to scour a market, or are really lucky, or blessed. I personally love the art of market scouring. Some people scowl at the art of scouring, but it is a critical task to have in the labor commodity business. The problem is, that when I assess a company’s value to me, it takes months to find out, and the equation is very complicated, and always seems to change over time. Whatever company I liked in September seems to be on their bad behavior in October and vice versa!

Paying a little more also doesn’t guarantee anything. There are plenty of people who charge a bundle who deliver unsatisfactory service. So, what is the secret?

Billionaire investor Warren Buffet looks for the intrinsic value of a company before purchasing shares of stock in it. When I invest in labor, I look at (try to look at because it is deceptive) the intrinsic value of a worker. I look at the price last since it is deceptive. Prices are hourly, but I don’t know how much they get done in an hour, and how good the output will be.

Advice: Look at the value of a prospective worker before you look at anything else.

If you find someone who is so good that they will be like a magnet attracting clients, your company will probably grow even if your sales department is missing a few screws (and perhaps bolts as well). You will also keep your clients very happy if you have someone good. What client will want to leave when they are getting the best service in town?

I personally have many people who I work with who offer outstanding service to me. I do not leave them. I stay with them for years or decades . Sometimes I have to go through a lot of people to find those good ones, but when I find quality, I stick with it.

Advice: When you find your star employee, offer them more than what you would offer an average or underaverage employee.

If you have amazing staff, your business has a big chance to grow. If you hire lousy staff members, they could put you out of business in a few years — slowly. Be careful. Your company is only as good as your worst staff member.

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6 strategies for growing your outsourcing business fast

Categories: Marketing, Semi-Popular | Tagged , , , , , | Leave a comment

In real life, growth is partly in your control and partly based on luck, and market conditions. What I learned from looking around is that most companies don’t grow because they have a failed growth strategy. Here are some simple ideas that can help your outsourcing business or offshoring business take off!

(1) Have labor resources
To attract new clients, you need to have some sort of exposure such as a well promoted web site, advertisements, or agents. But, if you don’t have the labor resources to get work done, then you will lose your new client as quickly as you got them. So many American companies are so stupid this way. They go to great efforts to gain new clients, and then don’t fulfill deadlines and lose the client within 30-90 days. Gaining new clients is hard, not to mention expensive. Make sure you retain them. Now, having labor resources is not the same as having quality labor resources. If your workers are all incompetent, that is even worse than not having resources at all. If not all of your staff is smart, make sure that the few who are smart, are regularly watching and inspecting the no-so-smart people’s work like clockwork. Otherwise you can not retain your clients. Having labor resources is key, but they need to be well managed too, otherwise you can not grow your business. Unfortunately, having more labor than you have clients means that you will be paying salaries for people who are not always busy. That is the cost you have to pay for growth.

(2) Give it away?
I just read a blog about a very successful African American. He was asked how he became successful. He responded that he had popular products and just gave them away in the beginning. He was not greedy for money. He gave lots of samples and free stuff to others, and gained the favorable opinion of many future clients. If you give something of quality away, people will get to know you and your company. Most people prefer to do business with someone they know. So, if they can get to know you for free, you will have a very fast way of acquiring clients — at a cost to you. But, how much is the cost to you if you give a little away to qualified prospects? I would screen them to see if they are worth giving a free lunch. If they seem like they have a good chance of being long term clients, then give them something for free, or at least give them some very flexible terms in the beginning. Most companies alienate prospective clients simply by being to rigid in their contracts and terms.

(3) Have a branch office in America
Many Indian software companies and companies from Belarus have an office somewhere in America. This means they are on the same time zone as prospective American clients. It also means that you have an American phone number, and people who speak good English. Americans will trust you more if you have one of your feet on American soil. Having an American office comes at a huge cost, but it can result in fast growth of your operation too. If you can’t afford an office, you can start out with an independent agent who gets a referral fee for introducing business to you.

(4) Have a well optimized website.
Many companies particularly in Gujarat show up all around the world. If you need a programmer in New York, Moscow, or Canada, companies in Gujarat will show up. If you want to get clients, you need to be visible wherever people are looking. If people find you everywhere, they will remember your company name.

(5) Do overflow work for American companies
Most companies in America have a labor shortage. It is hard to find good help in America these days. Many companies might be willing to use your services if you offer very reliable services at good prices. You can get large quantities of work fast this way. But, don’t screw up, otherwise you lose your relationship permanently. Watch your quality control, because you ruin their reputation if your staff makes any mistakes.

(6) Call people with websites
Have someone who is smooth talking call people with websites around the world who speak your language. Those website owners might need database programming or web design. If you get to know them without trying to push your service down their throat, they might not mind talking to you. A pushy salesman will get hung up on. But, if you just call to talk about what their needs are without being aggressive or trying to sell them anything on the first phone call, you might win their affection. Listening is more important than talking on these types of phone calls, and remember to avoid being desperate. You are there to casually chat and see if you can help them — don’t behave as if you are begging for a job. And remember, a little small talk goes a long way with Americans!

Good luck!

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If someone doesn’t need your services today…

Categories: Marketing | Tagged , , , , , | Leave a comment

If someone doesn’t need your services today, they might need you tomorrow!

Don’t be too upset if a client doesn’t need your BPO service today. They might have someone else, or just not have any work to do. But, if you stumble upon people who need one or more type of outsourced services in the long haul, they might be worth chatting with. The key here is to be casual during your initial phone call, and perhaps making very carefully phrased suggestions.

The mistake Indians make selling their BPO services over the phone is that they are often careless, pushy, or desperate sounding. This doesn’t work. The higher level salespeople in India are smooth talkers. They are cool, calm, knowledgeable and collected. Learn to be cool as a cucumber. Remember — you are not attached to the results of your phone call, you are just interacting and seeing what people need.

How to make suggestions
Be careful making suggestions to prospective clients. Let’s assume you are on a phone call with a prospect who doesn’t need you now, but perhaps they might need you in a year. It is still worth talking to them. Talk very nicely and try to be helpful, but not too helpful, because that is being pushy.

Have you considered adding xyz software to your site?
We noticed that your coding might be cleaner if it were divided into smaller modules, but it is not a huge issue. It might be easier to read if it were segmented.
The graphic design on your home page looks nice. How often do you redesign it?

These are gentle questions and suggestions. You are probing the prospect to see what their needs are without shoving your BPO service down their throat. Remember, if they have a pleasant chat with you and find you to be a reliable source of knowledge, they might consider you next time they are in the market. Humans tend to want to work with someone they either know, or have had more contact with in the past.

The next step is to follow up by email. If you exchange emails from time to time, or if you send “we just wanted to say hi” emails every four or five months, people will remember you. Sending emails to strangers doesn’t work, but if you call first, and then email someone who likes you, they will be likely to read and save your email. If you stay in touch with people, there is a chance they will use you in the future, or refer you to a friend. On the other hand, if they either don’t like you or are not impressed by you, you will just be annoying them. If someone from your company interacts with prospective clients, choose someone who is a smart talker who is cool as a cucumber!

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“I refuse to sign”: International Contracts to Watch Out For

Categories: Management | Tagged , , , , , | Leave a comment

Many business people accept the idea of a contract as a given. Sure; you are buying a service, so you need a contract, right? In the case of outsourcing to a foreign country, this seems to be even more of an assumption.

Here’s a question: if you do not know the company at all–except for a few references on the internet and a phone conversation or two– how do you know that signing a contract will head off any problems? And how will the contract work if you are thousands of miles away? Finally– what will you do if you actually need to consider litigation at some point?

Recently, before doing business with an IT company overseas [it was in Russia/ I thought it better not to say where], a U.S. company refused to sign a contract. Why? The IT firm required this preliminary contract just to be able to negotiate with the U.S. company and provide any details about pricing and terms and actual contracts! The U.S. company refused to sign. This idea of a preliminary contract was not a good sign: it indicated that the IT company was highly suspicious and unfriendly, had had several bad experiences communicating with or working for foreign companies, or was either burned out or inexperienced. In short, they did not want to do the work of finding out what the U.S. company needed or working with them on a trial basis for even a small paid project first– without a contract–so they could all get to know each other. If you find out at the very beginning that this is how a company operates, it is a blessing…but don’t think it will get any better because you sign a contract. Run, don’t walk, and find another company–no matter how friendly the sales people seem up front.

Another scenario: an IT company in India wants a U.S. company to sign three separate contracts before any serious conversations about work can begin. One is a “Master Services Agreement” that describes how the three contracts work, includes warranties, obligations…and an entire section that suggests what part of the client’s website might in fact be the intellectual property of the company creating or working on the site. This master contract by itself is daunting, but the combination of the three contracts (including a SOW or scope of work, plus a mutual non-disclosure agreement) makes the relationship–before it has even begun–a maze of unpleasant twists and turns, unknown obstacles, and hidden agendas.

Consider this advice from

Enforcing a contract where the parties to the contract are from different countries is very difficult. The reason is that even if you win from a legal perspective, you still need to collect damages, and in order to collect damages you probably need to file suit in the country of the other party. (enforcing international agreements, 2011,

In other words, with any contract, you need to know ahead of time what court has jurisdiction over that contract; this must be agreed in advance. Otherwise, it is just a friendly understanding between business associates, not an enforceable legal contract. The commentary justly concludes:

Even if you get over that hurdle, and you win the lawsuit and the court says that the defendant owes you $1 million, you have to be able to collect that money from the defendant. If the defendant does not have any assets in the U.S., then the only way to collect money would be to sue the defendant in a country where the defendant has assets, and that country may not honor the judgment of the U.S. court. In summary, if you have a contract with a party in Timbuktu and that party breaches the contract, you should just write it off and move on because the likelihood of collecting any damages is minimal. (

In other words, an international contract may end up being just for show, a club held up in the air to convince you the company has clout. It is at best a power play by the outsourcing company, and does not often benefit the client as much as it benefits the outsourcer. Unless it includes statements that benefit your company, it is a bad start to a business relationship.

In my experience, it is whatever is left out of a contract that invariably becomes the problem. Remember, the contract specifies what service you are getting, for how long, and some liability issues. But the contract does not often control who will be doing the work, and how efficiently the work will be done. It is rare that an IT company will give you a contract that protects your interests as well as it protects theirs. You also don’t know if they are really giving you as many hours as they bill you for.
If you must sign a contract, be sure you have the ability to add or change certain parts, including the level of workers they give you and the quality of the work: be sure these statements are adequate. But you have to let them cover themselves, or they will not work for you. If you refuse to sign a contract, they will most likely not do any work for you at all.

If you are outsourcing, be prepared to think hard about the details of any contract and ask hard questions like ‘Why should I guarantee the hours of work I am giving you–if you can’t guarantee the quality?’ And—if you ask this kind of question ahead of time, you will find out enough about the company so that you will get a better idea of whom you are dealing with, how they really do business.

Ultimately, that is why, if you outsource, you may want to go to the country to meet them…and then be prepared to lose everything you have already put into the relationship. If you find you do not like how they do business, there is no use pursuing a business relationship at all.

In other words, agree on scope of work, penalties and incentives… and try to make a preliminary “contract” or agreement by email, but suggest that you make the contract informal until you have had a chance to work with the company for a short while. If a company will not allow you to have any input into how the relationship will work, and will not do a paid test project for you without an extensive legal contract, chances are that signing a contract with them will not lead to results you will be happy with, and you will save yourself a lot of grief and money if you Just Say No.

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I love giving outsourcers a cash tip

Categories: Of Interest | Tagged , | Leave a comment

I am not the most generous guy in the world.
I have never been known as a big tipper. But, sometimes I will hire someone who is just such a pleasure to work with that I want to give them a cash tip. There have been social media managers, programmers, web designers, and other BPO service providers who were just so good, and also reasonably priced, that I wanted to give them a little more than what they asked for. It makes me feel happy when someone is good enough to tip. Unfortunately, less than 10% of the people I have hired are tip-worthy! But, let’s be positive and look on the bright side!

Give more get less?
Many business people just want to ask for more and deliver less. In theory this leads to higher levels of profits. But, what if you do the opposite and deliver more while maintaining a more modest profit margin? If that is the case, you might get tips of a few hundred extra dollars if I hired you. Sure the tip doesn’t amount to that much, but everybody is happy when a cash tip is exchanged.

What is more predictable that you will gain if you deliver more without asking for more is quite simple — more clients, more client loyalty, more referrals, and business growth. It is hard to grow a business these days. My business took 12 years to grow from being just me to having two assistants, a social media manager and a part time programmer. That is 3 full time and 2 part time people. I never tried to grow overnight. I am in a niche market where growth potential is not easy. I should be happy just to maintain my lead in the industry with no growth at all. But, if you offer great service at a reasonable price, your business will grow in the long run. Sure, there are market fluctuations, problems with employees and other temporary issues. How fast you grow is not guaranteed. You can not control a lot of these factors. The point here is to do your part in the equation which is to do great work and let nature take its course.

Lord Krishna advises that we should take correct action without an attachment to the results!

Although you might not get an actual cash tip if you do great work, you will get appreciation and growth which is just as good.

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