The analysis of the feasibility of Global Sourcing projects is based on assumptions. The completeness of the relevant factors and the accuracy of the quantificationa of these factors determines the quality of the asssessment.

For the customer the use of the module provides the following benefits:

• Verified and validated model as a basis
• Ensuring the completeness of all relevant factors
• Immediate availability and lowest cost

As already mentioned here: Building on the extensive experiences with offshore/nearshore SW / DevOps projects and other initiatives involving distributed teams, we identified building blocks for success, formed a network of experts and tools and defined a new service.

Thus, we are excited to have launched our new offering “Virtual-Teams as a Service “ (Virtual-T):

Whether an employer, employee, freelancer or …. Kindly have a look at virtual-t.com and give us your personal feedback. We are keen to improve on our concept and also look for further fitting colleagues and partners to shape this exciting new way of work: info@virtual-t.com.

[contact-form-7]Launch of Virtual-Teams as a Service (Virtual-T)

Numerous initiatives demonstrate the importance of innovative start-ups for the economy. Besides a good business idea and a solid financing, the growing lack of highly qualified professionals is getting the limiting factor for growth.

The German business news WirtschaftsWoche (bit.ly) writes that nearly 27 percent of young tech start-ups claim the recruiting of skilled professionals to be the biggest challenge – 10 percent more than a year ago.

The lack of skilled professionals (“Fachkräftemangel” in German) is nothing new. Still, from the pliXos perspective start-ups have a benefit due to their typically flexible and modern structures. This benefit, those start-ups should take advantage of, is the use of Remote Work / Virtual Teams by use of fitting online tools and processes for communication and collaboration. The WirtschaftsWoche article writes start-ups do more and more offer jobs as fully remote and this is manifold increasing the number of suitable applicants. But a challenge remains in integration the remote colleagues into the team.

A successful integration of remote colleagues into the team needs to include a high productivity of the team as a whole. This requires the respective high level of motivation and commitment of all, but also the use of fitting processes and tools. Exactly the area addressed by the new pliXos offering “Virtual-T”.

Building on the extensive experiences with offshore/nearshore SW / DevOps projects and other initiatives involving distributed teams, we identified building blocks for success, formed a network of experts and tools and defined a new service.

This offering also supports the requirements experienced by the increasing demand for Home Office / (New Work) in general.

Comments or interested in digging deeper?

Contact us directly to info@plixos.com.

German Economy: Shortage of Skilled Workers Hinders Growth of Innovative Start-ups

The recently published European Venture Report by Pitchbook

(https://pitchbook.com/) is an interesting read. Being in the tech sector myself, I think we are lucky to benefit from similar effects as seen by the Pitchbook authors: “The pandemic hit various sectors quite hard, but tech-based businesses traditionally linked to venture capital have demonstrated promising growth.” In a later evaluation of the deals, the pitchbook analysts write “As industries have shifted online, established tech-based companies have been able to ride a wave of growth during the past 18 months.

With people spending greater amounts of time online—rather than commuting, entering offices, or visiting physical stores—tech companies have had more users, which has translated to increased monetisation potential.” This is all good news to us

Further good news, although for sure no surprise to anyone in this market, is the graphs showing the venture capital deal value or deal count by sector:Further good news, although for sure no surprise to anyone in this market, is the graphs showing the venture capital deal value or deal count by sector:

Software is the key sector and even on the rise. Thus, there is an ever-increasing need to good software developers. But even more important is for companies to have teams of those SW engineers working closely together in a DevOps mode and with a high productivity.

This, combined with a remote team set-up, is the heritage of pliXos. And it will be one of our key focus areas for the coming years. Our take, as published some time ago (www.plixos.com/plixos-blog): Software is – and will remain – eating the world – win with global delivery teams.

An extension of our offerings we currently work on is to cater for the implications of New Work models, staff being in home office most of the time. Due to our offshore/nearshore heritage, we know how to deal with remote teams and want others to benefit from this expertise. This will be under the services brand “Virtual-T”.  Interested to dig deeper? Some hints are at www.plixos.com/en/news/ We are happy to receive a direct email to info@plixos.com and a request to discuss our ideas in a videoconference.

This fits very well to the statements by the Pitchbook analysts “As daily routines and working have evolved during the pandemic, we believe modern, efficient, and integrated workplace software solutions will be a core growth area over the next decade as we grow accustomed to living with COVID-19.”

Want to share an interesting article or an idea on IT, Software Development, Web Development Outsourcing? Just click on share with us and we will get back to you

Comments or interested in digging deeper? Contact us directly to info@plixos.com. Or follow us @pliXos_com, LinkedIn, Facebook, Google+, Youtube, Slideshare.

The current pandemic increases requirements for remote work and home office. It seems commonly accepted that remote work from home will remain a popular option in a post-Covid-19 future. Combining this change within the company (intra-organizational) with typical outsourcing scenarios, involving a client and a service provider (inter-organizational), we expect lasting implications.

Fig. 1: Working from home is getting the new normal due to the pandemic

For example, a Pew Research Center report “How the Coronavirus Outbreak Has – and Hasn’t – Changed the Way Americans Work” shows how the current pandemic has pushed employees to work from home and how they use modern virtualization techniques. The authors of the study highlight that even after the pandemic will be over, a significant part of the work will remain being done from home.

The report states “and more than half say, given a choice, they would want to keep working from home even after the pandemic” – all this being said while having learned that “meeting deadlines and completing projects on time” was “very easy” or “somewhat easy” (confirmed by 80% of respondents).

Fig. 2: Views of American workers on home office as presented by Pew Research Center

To the best of our knowledge, all the studies investigating Covid-19 and the rise of remote work focus on the effects of employees, freelancers, or consultants working in and for one company, i.e., most studies so far have concentrated on intra-organizational scenarios (INTRA-org).

Fig. 3: Intra-organizational scenario, all remote workers belonging to the same company

We at pliXos as well as HCL are involved in managing distributed teams for application development/DevOps in global outsourcing scenarios. Teams are usually spread over countries and continents in offshore or nearshore outsourcing arrangements. The effective use of virtualization, collaboration tools such as videoconferences, chats, is business as usual, as is the use of agile processes.

Historically, measuring and optimizing efficiency, relationship quality, or other critical aspects for improved project delivery have mainly focused on the interaction between the customer and the service provider, i.e., at the inter-organizational relationship.

Fig. 4: Inter-organizational scenario, a customer interacting with a service provider

As expressed before, due to the pandemic, managing this client-vendor setting becomes more complex by a full distribution of staff to home office, on both the customer side and the service provider side. While the inter-org relationship has already been – to a greater or lesser degree – virtualized, particularly in nearshore and offshore outsourcing arrangements, this virtual outsourcing management now gets stretched by the virtualization of the intra-organizational structures within the partners.

While we know from other studies, that this virtualized setup per company alone already has significant effects, it will have even more, and different consequences in a “two-dimensional” (i.e., INTER-org and INTRA-org) virtualized outsourcing scenario. In an upcoming study, we intend to analyze and better understand both the positive and negative implications and the necessary adaptations of outsourcing management at a strategic, tactical, and operational level necessary to make these scenarios successful and mitigate the newly arising frictions and risks.

Fig. 5: New combination of INTER-org and INTRA-org virtualization in sourcing scenarios

2 Hypotheses

We have developed a few hypotheses about how outsourcing management will (have to) change in a virtualized world of work and collaboration.

2.1 Two-dimensional virtualization will increase the acceptance of global sourcing

The current pandemic has shown to have a substantial effect on what people believe to be the right mode of working and collaboration. Managers and staff have learned about the potentials (and limitations) of virtualization – many have experienced that it is much more effective and efficient than anticipated. In congruence with many studies published in these days, we believe that the post-pandemic world will show a substantially higher level of virtual work than it used to be before 2020.

This increased level of virtual collaboration both within and between organizations will make the perceived differences between “us” (internal colleagues) and the “others” (vendor staff) smaller. It will reduce barriers in collaboration and exchange at all levels and thus eliminate perceived organizational boundaries. This will increase the acceptance of outsourcing in general and of global sourcing (since it is no longer relevant where a person is located) among managers and staff. Higher acceptance of outsourcing, in turn, will at least facilitate – if not drive – the establishment of new forms and models of sourcing arrangements.

A contradicting effect might come from the search for resilience. Firms have learned about the potentials of virtualization and the criticality of digital and institutional infrastructures as well as the importance of strong business continuity capabilities. Firms have also learned which countries are competent in managing crises and which are not. Thus, we might even see a shift away from offshoring to more nearshoring, at least. Our focus and argument is, however, on the, presumably positive, impact of virtualization of work.

2.2 Outsourcing relationships will benefit from two-dimensional virtualization

As described above, perceived differences between internal and external collaborators will diminish due to intra- and inter-organizational virtualization. Although overall virtualization might negatively affect personal and (purely internal) team productivity, it will also lead to an increase in outsourcing collaboration performance. The “equalization” of cross-organizational teams (involving members from client and vendor, or even from multiple vendors) will reduce the level of “formalism” in a team (if well-governed) and thus increase communication quality, trust and openness, and team productivity.

For instance, it will also increase agile work approaches’ effectiveness because a daily standup will now be purely virtual and not make a difference between people standing in the room and external developers being hooked up from remote. Therefore, while the INTRA-org effect of virtualization on productivity might be (slightly) negative, the INTER-org effect will likely be positive – depending on the project setup, this might lead to a positive aggregate impact.

These effects will, of course, be contingent on time and individual experience. The Pew reports mention: “On the downside, 65% of workers who are now teleworking all or most of the time but rarely or never did before the pandemic say they feel less connected to their coworkers now. Among more seasoned teleworkers, only 27% feel this way.” From this, we can derive that the adverse INTRA-org effects might improve over time.

2.3 Two-dimensional virtualization will require a new blend of formal and relational governance

Good outsourcing management requires a well-adjusted balance of formal and relational governance mechanisms. Of course, clients have to monitor the performance of the vendor to some degree and ensure that contractual agreements, such as SLAs, are met (also IT Security aspects will likely become even more crucial and in-focus). On the other hand, outsourcing relationships can only be effective if both parties put considerable effort into relational governance or what we call the management of the “soft factors”, such as fostering an informal collaboration culture, knowledge exchange, open and trustful communication, or applying motivational incentives and gestures towards staff members on the other side.

In an earlier research project together with Prof. Beimborn from the University of Bamberg, we have developed a toolset for defining and measuring the quality of this relational governance (e.g. refer to www.uni-bamberg.de or www.plixos.com/news.

We believe that to manage outsourcing relationships successfully in a two-dimensional virtual setting will require a re-balancing of formal vs relational governance. As internal and external collaborators will sit together at the same (virtual) table, the use of formal governance mechanisms (such as screening reports and discussing individual (non-met) responsibilities), will become less effective, even risky, for creating a thriving project culture. Therefore, formal governance has to move to the background and new/more relational governance mechanisms (and appropriate leadership skills) will have to be put in place.

Further, we hypothesize that for successful outsourcing management, the relational governance has to be stretched to include the parts of each organization that have not been directly and too closely in contact with the respective other organization. For example, the business side of the client organization is now and, thanks to virtualization, can be taken into the loop more intensely. They become more part of the collaboration, which in turn can create new frictions if relationship management does not cover this new spot.

2.4 Sourcing agreements will be impacted

In line with the change assumed on governance by the two-dimensional virtualization, we expect a need to change sourcing agreements accordingly. Separation of concerns or obligations, e.g. deliverables by the service provider or the customer’s obligations, are to be replaced by objectives and results of the team as a whole. How to define this from a legal perspective and ensure proper parameters (KPIs) to have every team member focused on the joint goal will be essential.

2.5 Two-dimensional virtualization will affect the use of collaboration tools between vendor and client

Tools for virtual collaboration have reached maturity over the last few years and they have received another boost during the pandemic, particularly in unified communication including video conferencing. While outsourcing teams have worked very professionally with collaboration tools for many years, many teams have more relied on asynchronous tools, or different messengers/chat services. During the pandemic, the overall work culture has experienced a strong surge in the use of synchronous communication services, mainly of those for video calls and meetings. As collaboration in sourcing arrangement will further stretch to include more parties within the respective organizations (and even more than just one vendor), we expect to see a higher use of synchronous collaboration services in outsourcing than before the pandemic.

The new virtual work culture within organizations might change the old (virtual) inter-organizational work culture. Whether this has positive or negative effects on the productivity of teams and the quality of the projects’ outcomes is open to an investigation (and debate…). In any case, it will be of high interest to investigate how the pandemic has changed the usage of tools compared to pre-Covid-19. Besides the change in the use of standard communication tools such as videoconferencing, chat or shared directories, we are especially interested in what requirements are not yet met by the tools that are currently available. What else is needed for improving the overall performance of large, globally distributed teams, e.g. in a DevOps environment?

3 Your opinion and expertise are highly valued

Your opinion and expertise concerning the assumptions and questions as described in this article are highly valued. Please contact the authors at joerg.stimmer@plixos.com, daniel.beimborn@uni-bamberg.de, frank@wolfsteiner.com or w.fritzemeyer@gmail.com.

To empirically investigate the hypotheses and questions raised above, a neutral and scientific survey will be issued soon by the University of Bamberg – Faculty of Information Systems and Applied Computer Sciences. We would appreciate receiving your email address allowing us to share this survey with you.

Are you interested in participating in this initiative? We would be delighted to get in contact (E-mails see above).

4 Sources

Pew Research Center
Images from pixabay

5 Keywords

Covid-19, Corona, pandemic, teleworker, remote worker, remote team, home office, digital nomad, virtualization, intra-organization, inter-organization, efficiency, governance, tools, agile, SW development, application development, DevOps, outsourcing, sourcing management, service provider, relationship