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Five secrets of outsourcing success

By on May 12, 2009
Flickr CC by Nicholas Raymond
Flickr CC by Nicholas Raymond
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The “best practice” for outsourcing is well known: Define scope and requirement clearly; invest in planning an communication; be aware of cultural nuances; etc. In this guest blog, Beriah’s Director, Kevin Hassall, picks out five less obvious secrets to success.

This is a guest post from Beriah Director, Kevin Hassall

Beriah sets up 2-6 development projects or part-projects each month, which makes us, apparently, an expert on “outsourcing”. Now, I might take exception to this, as I find formal outsourcing is a rather restrictive way to harness the potential of external partners. But, at least we all know what we mean by the term, and Beriah has recently completed a study on the costs of international development, so both from an operational effectiveness perspective and also from a cost perspective we have a fairly clear idea of how to make outsourcing work for our clients. On the basis of this here are five less obvious tips to making outsourcing a success:

1) Never lose sight of the Emergency Exit

When you start your first project with any partner, always have a contingency for it going wrong: make sure it isn’t critical path work, and ensure you have a back-up plan if you run into major problems. When the first project has gone well, and the second, and the third, don’t relax – don’t take your eye off quality, and always have a backup plan. The worst situation you can be in is where you’re dependent on a partner who isn’t delivering any more. But the most important part of this? Make sure your partner knows that you’re prepared to walk away if they drop the ball. If they know that you have an exit, you shouldn’t need to use it.

2) There is no such thing as a man-month rate in China or India

Man-month rate is a convenient fiction that you and the business development guy at the outsourcing company have invented as the basis for a discussion. In established development territories, salaries are predictable, and rise at a moderate and well understood rate, but in some emerging development territories a hot-shot artist might expect his salary to rise five-fold in under a decade. That would never happen in the west – twenty-something year-old British senior artists don’t expect £90k salaries – but that sort of massive salary variance can occur in emerging Asian territories. So, before you get hung-up haggling over artificial numbers, make sure you and the outsourcer know who you need and what they’re supposed to deliver.

3) Don’t be surprised if they don’t want the work

Especially if you are a small company, and especially for art, be prepared for some very good external studios to either turn the work down or to charge you much more than they charge their regular clients. The logic is simple. They don’t want to pay for downtime on their staff any more than you want to on yours. If they already have regular, well-scheduled work on prestigious projects (which may be exactly what attracted you to them in the first place) then the last thing they want is scrappy, unpredictable work from someone they don’t know if they can trust. Oh, and one last point here – it’s a big world, but a small industry: word gets around if you start treating partners badly, and that can cost you.

4) Your profit comes from making the game, not making yourself comfortable

If you’re an external developer then often, a publisher will have signed with you because of reasons unrelated to the efficient delivery of the game – the acquisitions guy could sell you to his stakeholders, a director championed you because of your last game, whatever. And if you’re a fairly large developer you will start getting the same emotional entrenchment inside your own company – your code team doesn’t want to work with anyone who doesn’t feel like one of them, your MD saw that this studio did the art for such-and-such a game, etc. Resist this. Your return on investment is highest if you pick a partner based purely on their actual effectiveness, and diminishes the more political criteria they have to meet. Concentrate on working with people who will deliver what you need, not the ones who make you feel fluffy and comfortable.

5) Poundland is not Waitrose

There are advantages to shopping at both, and the clever shopper picks the shop that will give him what he needs at a good price. In your day to day life you go to the appropriate shop or buy the appropriate brand depending on what you want to achieve. Using external companies for game development is the same. Just as no one shop has everything you’d want at the best possible price, so no development resource is perfect for each project – no one Chinese art house, no one Eastern European coding team, and no, not even your existing internal team.

A summary of Beriah’s recent report on international development costs can be downloaded from http://www.beriah.net/IntDevCostSummary.html

About Kevin Hassall

Kevin Hassall is Director at Beriah. Beriah builds better developments for a variety of video game companies: simply, Beriah frees developers from their resource constraints.