Lean agile methodologies such as Test Driven Development are mainstream; as Software Development Times famously declared last year. So is outsourcing or offshoring, as we all know. So, marrying the two should be a no-brainer, right?
Strangely, industry has been reticent to combine the two. The reasons are not far to seek, but far from convincing.
One reason is that many consider, wrongly, lean agile software as an alternative to offshoring in terms of cost savings. What many fail to see is that this is not an “either…or” situation. There is nothing stopping somebody from embracing both and enhancing the gains.
But the key reason, in my opinion, why many still are reluctant to outsource lean agile software development arises from a flawed understanding that Test Driven Development and the broader agile methodologies do not lend themselves to outsourced processes. The truth is: Many aspects of lean agile methodologies and Test Driven Development (e.g., continuous integration, short iterations, people over processes), curiously enough, are ideal for outsourcing processes, and many more have been successfully adapted to bring home offshoring gains.
In fact, this is why an expert such as Scott Ambler of IBM believes use of agile methodologies in software development and business process outsourcing is “inevitable, particularly if the buyer of such services wants to optimize its resources spent on such efforts and the seller of such services wants to compete effectively against lower labor cost countries!”
To press home my point, I draw your attention to independent, and more rigorous, studies by academia, not just industry research or case studies.
The first is a study by researchers at the University of Texas at Arlington, who specifically evaluated the effectiveness of agile software development when offshored to countries such as India. Here is what they found:
“The focus on customer collaboration, continuous testing/integration, short iterations and test first development seem to be the most important agile practices which are (already) used in OISD (Outsourced Information System Development) and show clear benefits to companies.”
Vishal Sachdev and Kishen Iyengar, the authors of the study, say the experiences suggest that some agile practices such as Test Driven Development are actually very useful for offshore development.
“While some communication and documentation overheads are required to compensate for the distance…the end result is more efficient and cost effective than traditional development,” the researchers conclude.
Also, “contrary to popular belief that high structure methods will help reduce the uncertainty in offshore projects, the experiences…show that people issues are the most important,” the study says, reiterating a mantra of agile methodologies – people over processes.
The second seminal finding comes from Rajiv Sabherwal, the University of Missouri System Curators’ Professor and the Emery C. Turner Professor of Information Systems. Sabherwal, who has brought pioneering new insights into outsourcing of agile methodologies, identified four levels of trust required for successful outsourcing. Of them, two – identification-based and performance-based trust – mirror agile lean methodologies, besides reducing the need for structure.
On other aspects of Test Driven Development, researchers and experts note clever adaptations to address factors unique to offshoring. A big difference arises from geographic distance. This has been overcome by the use of Wikis to replicate the intense consultative process that is key to Test Driven Development, and increased documentation.
Such adaptation is “more than offset by the improved productivity” arising from outsourcing of lean agile methodologies including Test Driven Development, as the study by University of Texas at Arlington found. The improved productivity, and lower costs, find an extra resonance in the context of the present sluggish market and lean budgets.
Yash Talreja, Principal, The Technology Gurus
As I noted earlier, remote and virtual work force (also called the Human cloud) where people collaborate and offer their services using the internet is growing much faster than onsite employment, where a “permanently employed” personnel (as if there is really such a thing) reports in person every day to a physical location. I found an interesting article on Virtual Workforce Communications by Melanie Slaugh which talks about how such a virtual work force, which includes not only folks working in creative and IT positions but also technology and financial executives – stay in touch with each other. The article covers the full spectrum of communication vehicles ranging from old-fashioned snail-mail to older electronic means (wire and fax) to ultramodern Instant Messaging, Smart Phones, Skype and web based sharing.
Yes, while rarely used, snail mail is still useful when you need to send 100s of pages of un-digitized documentation, and nothing beats talking over phone – be it a landline or a wireless call and hearing another human voice though it’s more and more supplanted by mixed media electronic tools such as skype, GoToMeeting and other websharing tools and Google Docs.
The Human Cloud. The phrase conjures up many images—skydivers interlocking hands to form a net as they free fall, a cluster of women in an overly crowded bathroom coating the air with a fine film of hairspray, or the technological wonder of Cloud City as it drifts above a gassy planet in The Empire Strikes Back. While all of those things could pass as a human cloud in some way, the true definition tends to be a little more complicated and much more based in reality than any scene from a movie. Indeed, the very concept of the Human Cloud would have once been considered pure science fiction, a type of technology that might occur in some far off future. But the future has arrived, bringing a virtual technology workforce that is fast becoming a booming industry.
What is a Human Cloud?
So what exactly is this Human Cloud thingy everyone has been squawking about? It’s a virtual world where people are hired via the internet to do all kinds of tasks. These tasks include everything from freelancing for a magazine to technology management for people based in the IT world. With our economy the way it has been the past few years and jobs being cut, employers are forced to find ways to curb their in-house staff but still have productivity. Gone are the days of the regular 9-5 job. As a technology workforce, people can work their own hours and do it from any number of locations. Social media like Twitter, Facebook, and LinkIn make it possible to communicate and check email from almost anywhere! Remember the common place sight of office chatter around the water cooler? Picture that water cooler as a portable laptop and your office space a coffee shop or an airplane. Now you’re getting the idea of what a human cloud is really all about.
Where do employers find their virtual workforce if they aren’t hired in the traditional way? Elance and websites similar to it act as a virtual middleman, bringing the employer and employee together in a human cloud scattered across the globe. On Elance, an employer lists what kind of project they have available. The potential worker can view it and decided whether or not it’s a good fit for their skills. That means that in addition to hiring one individual for a project, it’s also possible to outsource projects to a team of people located as far away as Bangalore or Shanghai. Due to the long reach of the human cloud, you may never meet this technology workforce team face to face but you can still expect and receive effective results.
How does this affect business?
While most outsourced development shops provide on-site management, a software company requires a person on-site or near-shore who is more familiar with the US business environment and current technology trends. They should also have prior experience as an executive and be comfortable overseeing a remote team. After all, just how does a company go about supervising its workers when they are not even in the same building, the same state, or for that matter, the same country? Simple. They hire a technology executive on a time sharing basis. A technology executive manages projects for a company virtually. Here’s why: for small companies, it might not be cost effective to have a full time technology executive in the building. The cost of office space, benefits, and salary can all take a toll, but hiring an individual from the human cloud to handle IT matters has the potential to make the business process run more efficiently and save money.
For the technology executive, this allows you to time share your abilities and work with more than one business, expanding your contacts and earning options. Another nice plus for IT workers is that working in the human cloud gives them the opportunity to hone in on all the latest trends occurring and really develop that ability. This can only make a technology executive more highly sought after and more valuable to many companies for their varied skills.
IT hiring has been definitely picking up in 2011, with an interesting twist – the growth of hours of work contracted via the internet is far outstripping the growth in traditional full time employment. The so called Human cloud – where projects are negotiated via online marketplaces such as eLance, guru.com and odesk saw a year over year growth of more than 50% whereas traditional IT job posts grew about 30% vs. last year.
Let’s first talk about the traditional IT hiring. Enterprise Software veteran, Dennis Moore who periodically assesses the job market by looking at the job posts in Dice.com across different keywords found that in traditional IT jobs, fast-growing skills included iPad, HTML5, Amazon, Android, Twitter, and Facebook; categories with the greatest number of jobs posted included SQL, Oracle, Java, Windows, Unix, and Linux. He discovered that the number of jobs posted increased about 30% compared to year ago. Among the database skills, demand for people skilled in MySQL led the growth with a 52 percent year over year grown, with number of jobs targeting people with experience with DB2, Oracle and SQL*Server growing 28 to 35 percent. In the enterprise application arena, the demand for SAP related skills gained 59% year over year, but the demand for people with Oracle eBusiness suite skills actually declined 36% just over last 3 months!
Dennis also reports that he saw a surge in the demand for programming language skills, which grew almost 60% year over year with HTML5 demand leading the pack with a 1000% growth year over year. In demand for platform skills, growth in demand for Android skills led the pack with a 270% growth year over year. Based on his trends, Dennis predicts that demand for Linux skills may surpass demand for Unix skills very soon. Another surprising finding was Microsoft Silverlight developers surpassed demand for Adobe Flash developers.
In virtual resource hiring, eLance, which publishes a quarterly report about online employment, reported seeing a 52% growth in job posted by businesses on the eLance marketplace and a 51% growth in earnings for service providers. It also notes similar trends in skill set demand; with demand for iOS programming skills growing an unprecedented 115% year over year and demand for HTML5 programmers seeing a 46% increase vs. last year.
One thing is quite clear, social commerce is gaining traction and will only get bigger and more profitable as the years pass. However, in order for social commerce to truly take off, online payment solutions need to get more effective, safer, faster and easier to use.
From the point of view of customers, one of the main benefits of social commerce is the ability to buy a product quickly. Or, in other words, pay without having to visit a whole range of websites and webpages and fill out forms upon forms. The latter is still a huge bottleneck for many social commerce, and other e-commerce sites.
Incorporating PayPal as a payment option is a huge step towards making paying for items, or services much faster and simpler. It is also a payment solution that too few online retailers take advantage of. And it does require that the buyer have a PayPal account, which not everyone does.
Another great solution is the One Click Check-Out, as the kind used by Amazon.com. After making the initial purchase, customers can simply choose a passphrase that will allow them to make all the subsequent purchases without the need to enter all the payment and billing information, and even without the need to sign in to their account. Obviously such a payment solution requires very robust and infallible security. It does, however, also give an added incentive to buy, since paying for the items is so simple.
Visa, the credit card giant, is also busy developing their so-called universal digital wallet. They recently announced that they plan to introduce a new, one-click payment solution that will enable Visa users to get a set of personalized credentials allowing them to buy things online with a single click. Visa believes that such a payment solution will guarantee their future growth and enable them to keep their good market position in the future, once social commerce and e-commerce really start to take off.
One of the biggest obstacles to creating more user-friendly online payment solutions right now remains the behind-the-scenes battle of all the companies trying to control this market, along with the digital wallet. They do, however, need to come up with an agreement soon, or they will be left behind in the dust of the newer and more modern online payment solution companies soon.
The number of professionals hired virtually is drastically increasing. Online marketplaces, such as Elance.com and Guru.com, are reporting a 50% increase in the number of people who have become part of the Virtual workforce in the last year. Elance also reports that the earnings of their virtual workforce increased by almost $10 million in the last year, and now amount to $30.7 million. The Information Technology sector remains the leader in terms of the growth of the virtual workforce. In addition to the demand for programming jobs, which has grown 100% in the last year, fueled by demand for iOS, android and HTML programmers, we are now also seeing offerings for technology management positions as part of a company’s extended virtual workforce. Companies such as the Technology Gurus are, for example, offering Technology Executive timesharing.
This is obviously a result of the slight improvement in the global economic outlook. As the effects of the financial crisis are finally beginning to subside, business owners are once again looking for resources on a contractual basis. In place of hiring full time employees, they are hiring consultants and contractors on a project by project basis. This avoids adding a permanent burden to their payroll. Looking for employees through the Virtual workforce Marketplace, also has the additional advantage of finding a more exact fit to the project requirements. And this does not only apply to specialized technical skills such as a Database Administrator, or a Java Programmer, but can now include even a Vice President of Engineering, or a technology executive.
Yash Talreja, President of the technology executive timesharing company, The Technology Gurus, explains, “When the Technology sector recovered from the last recession, we saw a boost in the outsourcing of software development. Now that companies have become comfortable with outsourcing virtually – whether the outsourcing is conducted by a software team located in Bangalore, or an individual programmer working from home in Minnesota, I see the outsourcing of technology management function as the next logical step. Having a full time Technology executive or VP of Engineering in house is cost prohibitive for many small companies. It is just a lot more economically sensible to get a Technology Executive on a time sharing basis”
The virtual workforce continues to grow, and the technology that helps the recruiting, verification and tracking of it continues to get more sophisticated as well. Instant messaging and social networks allow professionals to be connected to each other, and affordable solutions for background checking and a general increase in transparency, achieved primarily via the rating, reviews and recommendations over both general purpose professional networks such as LinkedIn and specialized marketplaces targeted at Virtual workforce such as Elance.com and Guru.com. One could see this as a natural extension of the trend over the past few decades where people’s relationship to places and belongings, such as homes and cars, and even other people, have gotten more and more transient. The average American moves every five years, only now instead of people moving for a job, there has been an increase in looking for jobs virtually, meaning that now the job moves to them. And this now includes technology executives, sales and marketing chiefs and even C-level officers.
As advances in technology and the Internet have brought down the costs of data communication while continuing to increase its reliability and bandwidth, everyone in the world is now closer to each other.
Today, anyone anywhere can be reached with just the click of a button. Social networks have not only opened new communication channels between individuals, they have also provided a new platform for both businesses and independent professionals to reach one another across the globe, to negotiate and deliver services.
Using a virtual marketplace such as eLance, Odesk, Guru.com, or People-per-Hour, a skilled professional – be it a graphic designer, a marketing copywriter, or an Android programmer – can now easily bid for a project at the other end of the earth.
This venue for the search, negotiation, and delivery of professional services over the Internet has been dubbed the human cloud. It provides to businesses benefits very similar to those of cloud computing: elasticity and the flexibility of pay-as-you-go and pay-for-what-you-use as these businesses hire skillful professional from anywhere around the world.
The human cloud is a natural evolution of the ongoing virtual workforce trend, where an increasing percentage of workers are performing their work duties from home.
Researchers have found that work-from-home arrangements not only give flexibility to workers, they also increase the workers’ productivity and efficiency while saving costs for the client or employer.
Tapping into the human cloud is especially beneficial for small businesses who can’t afford to pay for skilled professionals on a full-time employment basis, because it allows these businesses to find and engage skilled professionals and get the job accomplished in a very cost-effective manner. Similarly, talented professionals are no longer confined to a narrow geography for delivering their services; they can work on projects in faraway lands, getting the best use for their talents without having to travel abroad.
As one would expect, creative work such as writing and graphic design were the first categories to benefit from the shift to virtual workforces. The technology sector was the next to catch up, with a 50% year-over-year growth in jobs outsourced to the human cloud. (This figure becomes especially significant when one considers the fact that the U.S. unemployment rate increased to 9.7% in the year 2010.)
The leading subcategories for human cloud outsourcing in the technology sector are mobile applications development and social media programming. Today the professional service requirements being served by the human cloud also include technology management and technology executive services.
Yash Talreja, president of the Technology Gurus, a Silicon Valley based boutique consulting company which is a pioneer of technology executive time-sharing, explained, “When the technology sector recovered from the last recession, we saw a boost in the outsourcing of software development. And now that companies have become comfortable with outsourcing virtually, I see the outsourcing of technology management function as the next logical step.
“Having a full-time technology executive or VP of engineering in-house is cost prohibitive for many small companies. It is just a lot more economically sensible to get, on a time-sharing basis, a U.S.-based technology executive who is familiar with the U.S. culture and is up-to-date with the latest technology trends.”
Indeed, as the human cloud is making collaboration among people who live in different time zones possible, business owners have more options on who to employ, and for what cost. In the same way that cloud computing has given us new, more efficient, and more cost-effective solutions, so has human cloud model – and it is advancing at an unimaginable rate.
At least, that seems to be the conclusion that Sucharita Mulpuru, a researcher at the Forrester Research firm seem to have arrived at, or at least Social Commerce that is utilizing the Facebook platform. In her report she indicates the reasons - first, only a handful of small retailers are seeing a double-digit percent of their sales coming through their Facebook stores. Second, she found that the number one advantage of Social Networks, namely the ability to target a very precisely defined market, is not being taken advantage of by retailers to the full extent. And the last, Social Networks such as Facebook are plagued by constant unresolved privacy and security issues. This problem affects both the buyers and the sellers. The former do not trust Facebook with their credit card information, while sellers are wary of implementing a payment solution through their store.
But is all this enough to claim that F-Commerce is doomed to fail?
To put it quite simply: No, it is not. Social Commerce is new – companies, as well as customers are still getting used to it. The solutions for Social commerce, such as the facebook store, are not yet perfected, while retailers are still in the process of learning how to use them.
Also, since it is all so new, people around the world are still not thinking about Social Networks such as Facebook or LinkedIN when they are in the mood to do some online shopping.
This is of course, not equally true for all types of products. The sale of digital products, such as eBooks, renting movies and even virtual gifts is already picking up on Facebook. Selling hard goods, such as printed books, electronics and jeans, will have a way to go, but we believe it will get there.
Once Social Commerce takes off, retailers will also become more efficient at utilizing Social Network’s main strength, namely the ability to very precisely target people, whether it is based on the traditional qualifier such as age, region or gender or the more specific qualifiers such as college, major, employer, relationship status or interest.
Between who they are friends with or connected to, where they went to school, what eGroups they belong to, which companies they worked for, what companies, or “pages” they are following and so on, there is a wealth of very valuable information on Facebook and LinkedIN for both B2C and B2B marketers.
As for privacy and security on Social Networks, those are two of the biggest challenges to overcome in order for Social commerce to take off. But as interest in Social Commerce grows, and as direct and indirest sales through social network channels such as facebook stores begin to take off, this challenge will be addressed swiftly and effectively. So, all in all, there are many more reasons to believe that Social Commerce will succeed than that it will not.
Yash Talreja, Vanja Kovacic
There is no denying that Facebook is an excellent promotional and social commerce tool. It is, after all, the most popular social network in the world and the most visited website in many countries. With the introduction of Facebook Deals and the F-Store, they have also made selling through Facebook almost as easy as creating a social network profile. However, Facebook is not the only social commerce tool out there. And a prudent entrepreneur, or business owner should use all of them to maximize the benefits of social commerce.
Other social commerce tools include adding reviews of your products by past customers to your website, encouraging customer discussions, adding social media and other sharing buttons, and so on. These are almost completely free and carry all the benefits of increasing your customer base organically through recommendations. These tools can also save you a lot of money on advertising costs, while raising your profits at the same time.
F-Commerce is also not free. According to some reports, Facebook is charging a minimum of £50,000 (approx. 80,000 USD) from brands for the Facebook Deals tool. And that is quite an investment, especially for a smaller brand or business. So, if you already have a well-established website, it is perhaps better to use Facebook for promotion, while incorporating easier ways to pay, such as mobile checkout, PayPal and so on.
And for those who do their business globally, leveraging the positive benefits of customer reviews just got much easier due to the invention of a new translation software by the British company Reevoo. This new software enables you to automatically translate existing reviews into many different languages. Sony recently piloted this new software across eight of its websites in Europe. They report that it has helped them immensely in overcoming the lack of an established reviews culture in Europe.
Currently F-Commerce seems like the best solution to cover all of your social commerce needs in a single package. However, people are nothing if not fickle. MySpace once held the spot Facebook occupies now and has since fallen quite low. Who’s to say the same won’t happen to Facebook in a year or two? Rather than risk this, it is best to spread your social commerce efforts across a series of social networking sites, namely Twitter, LinkedIn, and others. And do not neglect the new comers, such as, for example, Plurk.com. Who knows, any one of them could be the next Facebook.
Yash Talreja, Vanja Kovacic
Lately it seems that everything is making its way online. Physical stores are closing in favor of eCommerce websites, and if you were to believe the hype, social networks have taken over all human interactions, at least in the western world.
Is it really true? Have Internet and Social Networks really become the primary vehicle for advertising and marketing?
well, not really, but ….
According to a report recently published by eMarketer, in 2010 the average US consumer spent 11 hours each day using one of the major media outlets, namely the Internet, TV, Radio, and so on. Out of these 11 hours, half was spent watching TV, only about a quarter was spent surfing the web.
BUT, according to the recently conducted survey by Goldman Sachs people’s online buying behavior IS primarily influenced by search engines.
Sounds convoluted? It’s get more confusing when we look at results around influence of social networks – only about 5% of the people who took the survey said social networking sites influenced them to buy something.
Based on these figures it can be concluded that social media advertising still has a long way to go before it will pose a threat to the more traditional forms of marketing and advertising.
With the projected growth of social commerce in the next few years that could well change soon. However, before you forsake the other kinds of traditional advertising in favor of social media advertising, there are a few things you should consider.
Social networks serve more as a vehicle to reinforce brands, rather than build them. For example, if your brand is not already well known few people will organically fan your Facebook page, which is something that does happen with larger, more popular brands.
But that does not mean social networks can be ignored, on the contrary, they add a very valuable layer to your marketing and advertising communications path. For example, people are becoming less and less tolerant to marketing messages via emails and choosing to either unsubscribe or worse, filter them out by flagging them as spam even when they like a product or a company. On the other hand, newsfeeds and status updates provide a more acceptable alternative – the recipient has the choice of paying attention if they have the time and interest and have a built in aging since they move down the list.
Television ads cost a fortune. For a small business owner, social media advertising gives a viable alternative by allowing them to target a very specific audience. It addition to targeting your ads to a specific age, gender or geographic group, facebook and linkedin let you target people based on what their college major is or was, when did they graduate, what type of special interest groups or societies they belong to, and more. And it is this that sets Facebook, LinkedIn and other social media advertising programs apart from the other Pay-Per-Click ad programs, such as those offered by Google, Bing and Yahoo.
Needless to say, this gives you access to your very specific target market segment without having to try to “guess” the keywords for context based display ads (As provided by Google, bing and others context based advertising systems) or basing it on what movie, or TV show people are watching, Of course, this is lot more valuable to a small business owner who does not really have the option of buying a TV ad spot.
Yash Talreja, Vanja Kovacic