Finding great offshore software teams for agencies, software shops, and other resellers is one of the toughest challenges we face at SourceSeek.
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When we refer to a ‘reseller’, we are talking about any client who wants to outsource software development to an offshore company, then resell that work to their own clients.
These clients are typically independent/freelance developers, small web shops, big software companies, or advertising marketing shops that don’t have their own technical teams in-house.
Reseller clients can be great, but they can also bring a lot of pressure and constraints to vendors and stress the relationships. Resellers usually offer very favorable terms to their clients, for example fixed-bid contracts with hard deadlines. When they hire an offshore team, the resellers like to ‘pass through’ these requirements to the offshore team – obligating the offshore team to deliver on the schedule/deadline expectations that they set with their clients. This can turn into a pressure cooker for the technical team, who may not agree with or have been consulted on the scope, budget, or schedule that is demanded of them.
Another issue with reseller clients is the inconsistency of work. So many reseller clients are constantly chasing jobs and may not be able to support full time, ongoing work. This poses a challenge for the outsourced team, as managing resources is one of the biggest challenges in running a software team and piecemeal or inconsistent work makes that very difficult.
To succeed with this kind of arrangement, we always start by digging deep into the inner workings of the client. How do they manage clients? How do they do estimations? How do they manage QA and release? How will they manage the expectations of the client and be reasonable with the vendor?
Once we understand how they work, we can usually find a vendor who can roll with the challenges of that client.
On the vendor side, we generally counsel teams only to consider this kind of work if they are extremely clear about how these clients work. We advise them to raise their rates a bit and to try and engage the client in a way that will allow them to help with the estimation process and with setting client expectations. We make sure that they are on board for the sometimes-chaotic world of reselling and web services.
Despite the challenges, we see a lot of success with these types of clients and it can be extremely profitable, but it’s definitely the hardest type of matchmaking we do!
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