Guide to Sourcing

ViceSoft is a leading provider of dedicated developer teams. We can hire the right people for your projects and we are proud that you can reach your goals. But before we start helping you first you need to know what you need.

Our 5 advises to a successful sourcing:

As with so many other things, starting something new can be difficult, the distance, a new language, skills and not least lack of control!

Define clear vision, objectives and strategies before entering into sourcing

Too often companies start sourcing without knowing clearly what to source, how to source and with whom they want to engage. As different areas may have different complexity it is essential for the vision to succeed that the goals have been defined and the strategy to achieve it outlined. It is like when you take your car you don’t start driving, before you know where you are heading, or do you?

Involve your home organization

It is no secret that often sourcing fails due to resistance from the home organization. Jobs may be lost, employees feel insecure and key persons lose their position. While it may be easy to get management support while the jobs impacted are on lower lever, it may be completely different when the reductions also impact management positions. The best way to avoid resistance, is to ensure a clear communication from the start, why are we doing it, what are the goals, what will be sourced, what will happen to the people at home, will there be reductions or reassignment and what actions will be required.
Another important part is to involve the organization by sending them to the off-shore site. Often people feel insecure when they don’t know the other side, but visiting the off-shore site does not only allow for knowledge transfer, it also creates the personal relations which are required for it to succeed. The initial costs may be high but my experience tells me that it will be your best investment towards a successful sourcing.

Partner with a local provider

Bulgaria, as well as other sourcing countries, are in many ways countries which have a high focus on sourcing. They are however also countries where things may not work quite the same way as in Denmark. Partnering with a local provider will ease your setup. They know the rules, they have the contacts, they have a local brand and mostly they know how to get things done, also when it seems impossible. In Bulgaria we also say, “Everything is Possible in Bulgaria, but it may not be easy and can take a long time”, so having a local provider just makes it a little bit easier.
I know many companies debate if it is best to setup an own subsidiary (captive center), or use a sourcing partner. Due to the often high overhead you will have, as many local processes are still performed manually, the recommendation in general is that the setup should have at least 100 employees before you get the financial benefit of an own captive center. This is debated by many, but my recommendation is why try if you don’t have to.

Make the sourcing setup accountable

80+% of all sourcing performed in Bulgaria is done as Service Sourcing/Delivery Sourcing. The Bulgarian providers often create the revenue by focusing on the efficiency in the delivery process. To obtain the best possible productivity it is generally known that this goes along with a delegated responsibility, but even more accountability. My recommendation is to go with a model where the provider is responsible for what is being delivered out of the setup, and your responsibility is to ensure that the provider delivers what they are responsible for.

This is Bulgaria – Incredible Bulgaria

There is no doubt that Bulgaria has many opportunities, while still having cost lower than Denmark. Many companies come to Bulgaria, with a mindset on how things work in the home country, this will fail. Laws are different, expectations are different and local conditions are different. People applying for new jobs often asking for 20-30% increase, the highest I have faced was 110%, expect promotion every second year while they would also want to have the conditions and benefits of that of the foreign company. To succeed you have to find a balance between having a setup where you operate a setup aligned with the company policies and CSR but also where you cater for the local market in respect to salaries, conditions, bands, titles, promotions, insurance, local compliance and the list is long. Many employees in Bulgaria would like to work for Danish companies, we treat people with respect and we create a good level of work life balance, so instead of increasing salaries and benefits, use some of the Danish leadership style, such as open dialogue, involvement and delegation, to motivate people, and you have a good chance to reduce the attrition.