Outsourcing during recession times looks much like a casino. There are two types of players (think of them as clients of your outsourcing firm):
– Players that play everyday
– Random casino visitors
Everyday regular players will continue playing during crisis times and their playing strategy won’t change – just like probability theory won’t change in recession.
First- or second-time (non-regular) players will still exist but their strategy will become more careful, they will try to spend less and only when they are likely to win.
That’s what we see now: there’s a category of customers that chooses doing technical specs first. They need everything carefully described, estimated and planned. No risks, long-time commitment.
However, there’s another type of clients: they opt for fast and flexible weekly iterations with no set budget and plans decided on the go. Some risks exist and you can quit at any time.
Sounds familiar, doesn’t it? In any casino you can meet highly technical players with lots of statistics in their heads and (as well lucky and successful, too) passion-hungry enthusiasts ready to grab their money after next game.
None of them are welcome in casinos.
Why? They love their money too much. Why you, an outsourcer, should care about it?
Because in other words, behavior of your clients depends not on how much money they have but on their attitude to that money.
So sell expectations. Create value for your price. Use their attitude to reach your goals.
And don’t take part in recession.
Wow this is the most interesting analogy I’ve read so far on the crisis! One question: What do you think the trend will be in outsourcing? Growth? Decline?
Thank you, Greg. I think that people who outsource large volumes will keep outsourcing to their remote teams. Although we notice light reducing of volumes on large projects, it’s hard to tell whether it’s due to recession or because we move to a new milestone.
Alex