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IT outsourcing management faces plenty of challenges today: underpowered supplier management and the Covid-19-induced global recession. When the Chief Technical Officers (CTO) are looking for new contractors, they fear falling out of the competition and losing time for a completely irrelevant project.
Outsourcing, on the other hand, can help your business in the following ways:
- Steady growth: having more staff, you can distribute tasks effectively, and if you don’t need this many people, you can cancel the contract
- A top talent advantage: outsourcing agencies are the ones who can provide the best specialists, without the need to hire them and pay significant incentives
- Increasing brand loyalty: because of well-trained support staff, your customers will keep coming back.
However, sometimes outsourcing staff is not a suitable option. It’s not a money-saving home run and can be a risky option for small businesses or startups with a limited budget.
At Devox Software, we can take this burden off your shoulder. Our dedicated team of professionals will pick an engagement model and help you attract the best people. We take control of the development process and ensure no bugs will pass through.
However, let’s slow down a little bit. How does outsourced IT management look? What services should you keep office-based, and what tasks can you transfer to remote workers? In this article, we will discuss the skills a Chief Technical Officer (CTO) should have to pick an outsourcing vendor.
Remote CTO Management in Software Development Outsourcing
In the overarching IT industry, the services like application development or network management are one of the fastest-growing segments. The outsourcing demand grows for companies belonging to energy, healthcare and pharmaceuticals, retail, travel, and transport industries.
According to the statistics on outsourcing, around 78% of businesses worldwide outsource at least one department (and ca. 40% of the companies outsource IT services), with development costs reaching $1.28 billion in 2022.
The three main reasons for outsourcing IT department include:
- You need developers on short notice for an immediate project
- You need to maximize flexibility
- You have a tight budget
Collaborating with outsourcing vendors is cheaper than hiring a new employee, but it may not appeal to investors of startups and eCommerce businesses as a suitable option. As a result, it’s essential to carefully consider which services need outsourcing candidates and which ones will stay in-house.
Remote management is about taking care of the development cycle: from an onboarding process to supervising software teams. For a CTO, remote work should be no different from the one carried out at the office. You have the same responsibilities and employees, depending on your business decisions.
Managing Remote Work: Real-Time Practices
An effective CTO can follow up with team members under any possible circumstances, whether in different time zones or changing the project’s landscape.
Here you can find the crucial factors for choosing a reliable vendor:
How to Implement Remote Management
The Covid-19 situation forced us to consider physical distance as a harmless way to keep working. IT-managed outsourcing implies the same principle of remote work so that you can find developers in different parts of the world.
For many enterprises going remote turned out to be a weak spot. Because of limited face-to-face interactions, managers start asking questions: “How do I transfer tasks? How can we discuss project details? Should I call every time if there’s an issue?”
Let’s highlight the main factors for successful remote management.
Communication
First, we want to clarify that reaching out whenever an issue is unnecessary. Remote communication is more about ensuring someone has your back in case you need professional support.
Choosing to outsource, CTO must embrace it as an opportunity to expand their professional network. People from such companies still need guidance: sending them a task without explanation won’t work. You have to schedule a call and discuss the details.
Personal Value
Managing teams need to have their routine. But don’t forget you’re hiring people, not AI products. That’s why contributing to every employee’s satisfaction is one of your indirect responsibilities.
One of the key factors for smooth project flow is showing empathy and active listening while at work. Be attentive to “red flags”: if a co-worker is often absent, if they don’t turn the camera on during the calls, or if they keep missing deadlines.
Combine an individual approach with your professional senses. Sometimes asking “Are you okay?” means much more than praising someone’s performance.
Work Experience
The Gartner statistics show people are likely to resign if they are dissatisfied with the quality of projects. Almost 41% of entry-level specialists said they intended to leave their current employers in the nearest time.
These numbers indicate that your co-workers expect something more than a paycheck. Especially outsourcing employees: they value diversity and the impact organization has on their hard skills.
People need projects to grow professionally; they need development opportunities and a work-life balance to feel in control over their private lives. That’s what they value beyond the salary expectations.
Incorporating Remote: CTO’s Step-by-Step Instruction
IT outsourcing can be pretty straightforward and predictable (if using the right communication channels). A talented candidate may be a game-changer for your team, but how do you find the right person for a startup? Let’s review the critical steps every CTO must take.
1. Research your industry connections
If you’re not new to the startup community, you must have a friend (or a former colleague) who’s looking for a job. Checking out LinkedIn recommendations, or a web development agency files are also reasonable options when looking for developers.
If you feel you’re still going in the wrong direction, check the recruiters’ profiles or the services, like GoodFirms, that provide an overview and rank the IT staff.
2. Define the right match
Now that you have candidates in mind, it’s time to figure out who suits you better. Any ideas?
We recommend splitting the job interview into two parts: technical and product. The candidates demonstrate their development experiences during the first one, and the second interview is meant to define motivation and product knowledge.
If you’re finding a vendor from a development agency, ensure this person has impeccable skills and can provide a portfolio or previous projects. Check the recommendations from the previous employer, and browse through the candidate’s social media posts.
3. Ensure a smooth communication flow
When outsourcing IT department, CTO must think about the proper communication between team members. Choose one channel for quick calls and chats (such as Slack, Microsoft Teams, or Zoom), which will make it possible to cooperate over project details.
How Does Remote Management Help to Save Money?
Even though working from home has its drawbacks (like addressing security issues, complying with employment law, and tax implications), it has way more benefits than disadvantages.
When practicing IT-managed outsourcing, ask if the developers have everything they need to start working from home. You may rarely face this problem as a CTO for an IT company, but it’s good to ensure the staff is all set to meet expectations.
Different projects may have different budgets: depending on the financials, allocated time, and a candidate’s prior experience, CTO can propose a specific rate.
Take a look at the comparison of rates for Ukrainian and Polish development teams.
For example, an annual salary for a Front-End Developer in Ukraine equals 14 834,07 USD; working in the same position in Poland, the candidate may earn up to 18 377,09 USD per year.
Remote management has a positive impact on taxes and reduces costs for office supplies. It offers plenty of opportunities because you may find vendors from different countries. As an international IT outsourcing company, Devox Software has offices in Ukraine, Poland, Romania, Azerbaijan, and Georgia.
The average rate for hiring a web developer in Ukraine is $6,35 per hour. Here are the average rates for other countries:
Skill Set of the Best CTO
The position of CTO has moved on from infrastructure management. Nowadays, these specialists take part in leading product development and driving technological innovation.
Let’s overview the must-have competencies for CTO to advance in their careers.
Leadership
Every CTO: remote or office-based, should have a clear vision of how the company grows. And to imply that vision, the technical officer should be a strong leader who can set goals and motivate the employees.
Strategic Thinking
The project managers, designers, and developers should focus on product details, but a CTO should keep in mind a global picture: anticipate every step, running ahead of emerging trends.
Coding
As Chief technical officers (emphasis on the “technical”), CTOs will have a hard time with the project if they don’t code at all. No need to know the programming languages from scratch, but understanding the code will guarantee you appreciation from developers.
Active Listening
A good CTO doesn’t have all decisions beforehand: they listen to their peers and the other company leaders, and make sure projects fit the market needs.
Decision-Making
CTO can either work on a strategy alone, balancing teams, tasks, and deadlines, or work as a trusted advisor for a technical co-founder and other stakeholders. CTO should be able to distribute resources and ensure a smooth workflow for remote workers.
Time Management
The job of a technical officer spans many verticals, making every day too short to finish work on time. And yet, you have to plan carefully without causing yourself emotional burnout.
The business Analytics
CTO is responsible for market research and technology trends to know what’s best for a project. CTOs don’t sit alone, waiting for orders; they drive change and participate in launching new products.
Mentoring
As a true leader, every CTO should establish a culture of mentorship: not just for regular workers, but for an outsourcing staff too. That way, you’ll pursue new ways of communication, and gain trust as a manager.
If you urgently need an impeccable CTO, let Devox Software assist you! Our specialist will lead your team through daily operations, aligning the tech side of a project with your business expectations.
Responsibilities of CTO: Inside and Out of IT Outsourcing Management
CTO’s position overlap with other IT jobs: the chief information officer (CIO), and a chief science officer in particular. CTO might act as a primary customer relations liaison in some corporate environments.
Chief technical officers are the ones included in the so-called C-suite: they embrace the newest technologies that help organizations achieve higher efficiency. So, what else is in the range of the CTO’s responsibilities?
Building a Long-Term Technical Strategy
Taking into account marketplace challenges, technical officers build and periodically revise the company’s strategy to make sure it aligns with business goals.
As a leading software company, Devox Software can provide you with great IT specialists, and contribute to a technical strategy. Our portfolio has cases of web development for the following industries: healthcare, finance, retail, etc.
Implementing Technologies to Reach Corporate Advantage
CTO is responsible for researching the content management systems, as well as maintaining information about compliance regulations.
Ensuring a Scalable Agile Execution in Development Operations
A strong technical leader has to be good at transforming organizational integrity. Working remote, CTO has to manage the business risks and opportunities, taking responsibility for the results of the strategic roadmap.
Monitoring KPIs and IT Budgets
CTO is the primary face of contact for assessing technological performance. One of their daily tasks is managing corporate metrics and eliminating the project’s weak spots.
Taking Part in Outsourced IT Management
Defining a business strategy takes only half the road: the other part goes for hiring the right people to achieve great results. That’s why CTOs make decisions about which services stay in-house, and which ones they will transfer to a remote basis.
Checking if Internal Processes Comply with Security Standards
CTO doesn’t have to let important information slip away: no matter if it’s a graphic design or a coding language. It’s another challenge for remote teams: making sure, they keep secret information inside a corporate environment.
The Main Challenges CTOs Face
Now that we went through the responsibilities and key skills needed for CTO in outsourcing, let’s take a look at the pitfalls they have to deal with.
Alignment with Outsourcing Companies
If you think that CTO, remote team, and an outsourcing company have the same goals, you’re wrong. Outsourcing companies may have way too different principles for reducing costs. For example, they may not care enough about product quality, and, thus, offer you less qualified developers.
So, that’s where the roads split: because CTO wants to hire the best developers for an appropriate price, and a company wants to “sell” the people they have in mind, sometimes even skipping an interview process.
High Turnover of Developers
Besides questioning development expertise, CTOs face a high turnover of tech specialists. Many outsourcing companies struggle with developers, who want to leave the country and work for a more high-profile software company.
CTOs should be aware of such developers, because even if they get a chance to hire someone, it’s a high possibility these employees will not really dig into a product strategy, performing the bare minimum.
Time Zone Difference
It’s very common but also crucial for a project. If one or two turnaround times during a project might be okay, with a time zone difference, the missed deadlines occur on a daily basis!
Find an Outsourcing Vendor: Key Takeaways
Being CTO is about constantly making choices. You have to look for a vendor; you have to make sure they do a great job and can generate competitive results. As a technical specialist, you have to find the best match for an upcoming project, by evaluating portfolios and conducting the interviews.
At Devox Software we know, how hard is to find the right match for your project. But we have an experience in remote managed services: we can take this burden off your shoulder, and pick the right engagement model.
Just give us a call to hire dedicated IT specialists. As a leading outstaffing agency, we will provide you with skilled employees, who have proven expertise in web or mobile development.
