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Why outsource software development?

Software development is outside your core business. Would you start a project in the area that is not part of your main expertise, or would you rather focus on growing your business and let experts do the job? Do you repair your own car or do you pay a technician to do it? Do you prepare your own tax returns or let tax professional do it?

The experts are hard to find. Building enterprise software requires specialized knowledge. The right expertise can mean a difference between success and failure. But finding, hiring and training is expensive and takes time. Instead, you can hire an outside firm to complete your project themselves or include their experts into your team.

Variable workload. Different stages of the software development require different number of people with different skills. Outside firms specializing on software development tend to have more flexible and scalable teams, so you will avoid costs of non-productive staff and keep up the morale of your team.

Jumpstart the project. While it make time to free in-house engineers from other projects and integrate outside consultants into your team, highly skilled staff of outsourcing company is always ready to start.

Internal politics. The outside companies are free from intra-company politics and will be able to focus on delivery of great product. After all, Kanoi Services, for example, gets roughly 80% of its business from referrals.

Risk management. Software development is one of the most riskiest endeavors. It is known that every third project will be cancelled before it is completed. Further evidence suggests that every second project will cost twice or even trice the original budget. Call it "The Murphy laws for software development" or "Chaos Theory", but it's science. You can minimize your risk and maximize your success by selecting the right outsourcing firm.

Advantages of outsourcing with Kanoi Services

High ROI. Our goal is to provide highest value, not the lowest cost. A project that is accurately estimated and carefully managed will end up costing less then a bid that would start low but but creep up dramatically as the project goes on.

Accountability. We achieve high transparency and accountability by providing you with evidence that your engineering dollars are well spent by delivering source code releases, milestone checks and status reports.

Communication. The most often sighted reason that the software project fails is inadequate definition of the requirements. In addition, internal projects are rarely adequately documented. Kanoi Services will dedicate the time and effort necessary to research the project requirements and prepare thorough scope document on which you can sign off. Once we have completed preliminary arrangements, Kanoi Services will focus on clear communication for the remainder of the project: maintaining a consistent information exchange increases the quality of the end-product and reduces delays and confusion. Honest communication will ensure your project will proceed smoothly and without surprises.

Team work. We will ensure that access to source code, bug lists and documentation are hassle-free. Also, we maintain a shared repository of code with versioning support, so team members around the world have seamless access to the code while providing ability to retrace the code changes and to backup the older versions of code . All team members are reachable through phone call, e-mail or instant messaging software.

Flexible cost structure. We offer our services on both time-and-materials contract basis or offer a fixed bid. Fixed-price (flat-rate) contracts may result in reduced functionality if the firm is forced to cut corners to meet the budget. That can also be the case if initial requirements for the project are vaguely defined. Though Kanoi Services has the right expertise to analyze the customer's business requirements, on large-scale projects it is almost certainty that requirements are going to change during the course of the project. We will do everything to find solution that satisfies our customers, but in general fixed-bid projects tend to be a management headache: even if the flat-rate project is re-estimated to include new scope, valuable engineering time is lost. Most often the time-and-materials contract leads to a better relationship between you and your software engineering partner. It provides the flexibility needed to complete the project in the face of changing requirements.

Some engineering managers express concern that a time-and-materials contract only benefits the outsourcing firm that would purposely drag the project in order to increase billing. But Kanoi Services is highly motivated to finish your project on time and on budget for the sake of repeat business. Again, Kanoi Services gets 80% of its business through referrals.

How much can the customers save? Can customers do it on their own?

Of course they can. There's plenty of offshore companies offering their services. I bet you also are being "spammed" with"developers offering their services for $8/h". Well, we actually tried one of these offers in our early days. Unfortunately we got exactly what we bargained for: bunch of coders working from a garage - completely incompetent, no representation in the U.S., no liability, poor communication skills, poor management. If only it worked out we could offer our customers more then 80% savings! Bad experience... But can organizations really save that much on outsourcing, or are these savings a myth, a product of wishful thinking?

According to major research firms specializing in offshoring/outsourcing analysis, on large projects lasting several years the average savings barely reach 25% in the first year. Savings of up to 50% are achievable in the second calendar year of the project. And the reason why the first year delivers twice smaller savings then the second is startup costs, poor communication during contract negotiations, gathering of the requirements and lack of experience of the offshore team in working with customer's tools.

Luckily, Kanoi Services already has the infrastructure set up: our servers, shared code repository maintained with seamless access for customer's, local and offshore teams to work together. So, if done right, Kanoi Services can help the customers achieve much greater rate of savings, and ultimately, deliver higher ROI. Also, to improve communications, we use instant messaging, email and internet teleconferencing tools so no expensive long distance phone calls are necessary. We also use VPN access to our server and our customer's network (with their permission), or remote terminal server software.

So again, customers can do outsourcing offshore on their own, but at higher cost and with longer start up time. It's all about experience and existing infrastructure.

Is outsourcing new to your company or project? We will make you an offer you can't refuse!

So you are interested in outsourcing, but can't make up your mind. You didn't have experience with offshore developers yet. Who knows, what if these developers on the other side of the Earth are incompetent? How will you efficiently communicate with them? How will time zone difference impact the project? How will we share source code and perform builds between the local and offshore teams? Those are absolutely fare questions. And we have got the answers.

I'll start from the story of the project we did for one of our large customers. The project began during 2001-2002 recession, and the customer was literally counting pennies. Though they had a very talented team, the skill set just wasn't align with the task. That's when we came in. I must mention that this customer did not have a single consultant on the team before: their perception of the consultant was of a person who comes to fix a problem and goes. In fact, the only type of consultants they worked with were people they'd hire for a day or two to install and configure a new product or service. When we came aboard, we have completely changed that perception - in a way that changed the entire business model of that customer when they discovered the new more efficient ways to do business.

For one, we proved that consultants are not always people who come and go and take their experience with them. We demonstrated that consultants can be part of the team for very long commitments, they are highly proficient in their area ofexpertise and they will execute an adequate exit strategy before they leave by mentoring the customer's team and transferring necessary knowledge.

Secondly, when the times were tough, Kanoi Services had delivered twice the experienced workforce for half price. Two of the customer's team members were downsized, instead we got 5 people offshore, and a server, and new licenses. When the project was finally delivered and customer could finally realize the return on their investment, they started hiring again.

Many customers have heard about our services, and about the benefits of outsourcing development offshore, but are afraid of outsourcing: either they never tried it before, or already had a bad experience. So we decided to make our

Trial offer: give us a week worth of work and try our offshore outsourcing services. Check our communications, our expertise and experience how offshoring really works. And it's really low risk, or no risk at all. On top of that, the first consultation if free.

Kanoi Services Ltd.
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