Global Software Development Outsourcing Becomes Practical for SMBs

Don Tennant
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It’s always been something of a conundrum. Plenty of midsize companies would certainly value being able to take advantage of software development resources that have emerged all over the world, but they simply lack the global footprint or resources of the Fortune 500 companies that have created the market for global outsourcing. However, it seems that conundrum may be a thing of the past.

A key change agent appears to be Accelerance, a global software development outsourcing services provider in Redwood City, Calif., that has created a global network of software development teams to work with SMBs. I recently had a fascinating conversation with Accelerance CEO Steve Mezak, and the company’s president, Andy Hilliard, and I got a first-hand account of how it all started. Mezak took me back to when he was working with a software development company in St. Petersburg, Russia:

In the early 2000s, I started looking at these other [software development] companies, and realized that some of them were good, but not all of them; and that the challenge my clients had in looking at using my firm, was that it was a very crowded market, which made it very difficult for them to decide who to choose. So I thought, let’s go out into the world and find great companies and vet them and make sure that they’re good, and then offer a variety of services to clients.


That’s the basic idea of the company—the basic value proposition: Do that for free, and then the offshore companies pay us a referral fee and get deals out of it. Because they suffer from the same problem, trying to get heard above the noise. That was the genesis of it—we started with a company in India, and then Argentina, and then Costa Rica, where I met Andy. And it went on from there.

For his part, Hilliard explained that he and Mezak became business partners in 2010, but that they had known each other and worked together since 2003:

In 2003 I had founded a company in Costa Rica to provide software services. Steve’s genesis of the idea to find great companies around the world that are specialists in certain types of software development, and that have certain attributes that would appeal to the U.S. market, addressed the same problem that we were having. We were in Costa Rica, we had good quality for the American market, but we were actually very specialized in technology—Microsoft technologies, for example.

So I had the problem that a lot of people liked certain qualities that we had, but they really needed other qualities, as well, and we weren’t able to service them. So the perfect solution would be Steve’s greater idea of finding similar types of partners that are stable and are good development centers that can serve the U.S. market and that have slightly different qualities, whether it’s time zone or price points or technology focus. They all have certain good, standard qualities in delivering to the target U.S. market, but they were all different in their own ways.

So just how do Mezak and Hilliard go about finding these great companies around the world?  Mezak indicated there’s nothing magic about it—just a lot of hard work:

LinkedIn is a wonderful thing—it has connected all of us professionally, and that’s one of the tools we use. There’s also doing basic research on the Web. And then the third way is we receive a lot of emails from companies that are offering software development services. So we’ve created a database of 6,000 companies around the world. In going through those, we’ve looked at about 1,500 very closely, and then selected 50 partners. In that process, we’ve been able to uncover some real gems.

Hilliard said what’s really helped is that he and Mezak, and others on the Accelerance team, have been on both sides of the due diligence and procurement equation—both from a client perspective, and a service provider perspective. But, he said, there are no shortcuts:

There are tools that we can use remotely, like LinkedIn, doing Web searches [of the prospective partner’s] referrals and their clients—certain things that can tell you whether or not a service provider will pass muster. The other thing that we do is we’re constantly on the road. Steve and Hugh [Morgan, vice president of marketing and sales] are about to take off next week to Armenia and the Philippines; maybe Bangladesh. Next month, I’m going to five or six Latin American countries with another managing director.

So we spend a lot of time on the road, visiting these shortlisted, remotely vetted companies that we feel will fill a specific niche that’s in demand in the U.S. marketplace that we haven’t filled yet. And those niches are always changing. So we’re constantly shortlisting, validating, and then at the appropriate time, when the demand is there in the marketplace, we do onsite due diligence.

Hilliard went on to explain what happens when a customer comes to Accelerance:

We go through a Q&A that gathers a lot of hard data on very specific requirements with respect to tools and technology stacks; things like industry experience, the size of the team, their cost factors, maybe certificates and awards. Those are really easy to nail down, and to weigh and scorecard. Then we ask them for stories about their experiences, preferences, and cultural awareness, on both personal and professional levels, because that really starts to give us some idea of who they might collaborate and align with from a relationship perspective. The hard scoring of requirements and matching is the easy part; building relationships is what makes a good project, and a good deliverable in the end. So when we combine the scorecarding of the hard stuff with the soft feedback, then we start to really boil up a target list of prospective partners.

Hilliard also explained that a key trend that Accelerance has seen unfolding is the emergence of the user experience as a specific area of focus:

It’s not just design anymore. In fact, we have added some partners, and all they do is UX research and design. They will work with a software development partner of ours to provide a cohesive set of services to the end client. The market is very competitive, and just good design work doesn’t cut it these days, whether it’s for B2B or B2C, internal or external audiences. That’s a huge trend, and we’ve been pushing our partners to take the courses and hire the people, to establish these specific centers of excellence around UX.

Hilliard wrapped up this portion of the conversation by stressing that the global outsourcing world is wide open for SMBs:

Small-to-midsize companies can leverage the benefits of outsourcing, and they can mitigate the risks. Everyone is walking around with these horror stories—I hear it, even with clients, all the time. I’d see these managers who said, ‘Oh yeah, I outsourced 10 years ago, and it was a disaster.’ Yeah, it was an immature industry back then. But it’s evolved quite a bit. What we’re trying to do is educate people on how to build a strong, viable relationship with a company that can be an extension of their own development efforts, in a risk-mitigated way. Universally, when our clients interact with us, they say, ‘Wow, we really never approached it this way. We thought outsourcing was only a Fortune 500 thing.’ The world is a global marketplace now, and people understand that.

Mezak and Hilliard also shared some keen insights on the nature of that global software development marketplace. I’ll cover that topic in a forthcoming post.

A contributing writer on IT management and career topics with IT Business Edge since 2009, Don Tennant began his technology journalism career in 1990 in Hong Kong, where he served as editor of the Hong Kong edition of Computerworld. After returning to the U.S. in 2000, he became Editor in Chief of the U.S. edition of Computerworld, and later assumed the editorial directorship of Computerworld and InfoWorld. Don was presented with the 2007 Timothy White Award for Editorial Integrity by American Business Media, and he is a recipient of the Jesse H. Neal National Business Journalism Award for editorial excellence in news coverage. Follow him on Twitter @dontennant.



Add Comment      Leave a comment on this blog post
May 17, 2016 2:29 AM startechup startechup  says:
I was not aware of Accelerance. I will definitely get in touch with them. Our team has provided great services to clients all over the World. Looking forward to extend our network. Reply

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