Aderson Oliveira: I've spoken with Ruby Mehta. She is the VP of Sales at Netsmartz. We have spoken about the fact that her organization has over 1,000 professionals, and they focus on multiple niches, multiple technologies, the channels that go around doing that kind of thing, and also about the pros and cons of working with a freelance professional as compared to an agency or an organization as big as Netsmartz.
Hello, hello, Aderson Oliveira here. This is another interview for the OuchSourcing Podcast, and I have with me Ruby. She is Vice President of Sales at Netsmartz. Ruby, thank you very much for being here. Welcome.
Ruby Mehta: Thank you so much, Aderson. Thanks for having me today.
Aderson: My pleasure, my pleasure. Ruby, let's start by you telling where are you located. Where are you?
Ruby: I am in Toronto.
Aderson: Very good, very good, so you're local to me. Very good to have a local interviewee join me. Today, I wrote down that we would be talking about outsourcing in the larger scale. Why did I pick you to talk about outsourcing in a large scale? Tell me why?
Ruby: That's a good question. Last week, we spoke about outsourcing and Netsmartz provides a lot of outsourcing models to the clients. So, we spoke about Build Your Team. That's a very interesting model that Netsmartz supports. I think that's the reason.
Aderson: I caught you out of guard. That's fine. The reason is because you guys have a pretty big - a huge team of professionals and people that you allocate for outsourcing. So, talk a little bit about what goes on on outsourcing with that size of a team. I know that you have 1,000-plus resources out there. Talk a little bit about the size of that organization and the challenge that comes with that size of organization.
Ruby: Okay, let me tell you a few statistics about Netsmartz first. Netsmartz is a 17-year-old company headquartered in Rochester, Upstate New York City, and we have eight global locations. Out of these eight locations, we have four very huge development centers, and those development centers are there in India. So, yeah, no doubt there are multiple locations and there are 1,000-plus technology people working with the organization. But, this is not a challenge I would say.
When it comes to small-scale, or startups, or very small kind of organizations, Netsmartz actually provides very good services to all those -- I mean, starting from startups to already small-scale organizations to large-scale organizations. So, Netsmartz has been able to fulfill the requirements of all types of industries and all types of scales. I would say, even for these startups and for the small-scale industries, we have beautiful models to work with.
As I said, we have a Build Your Team model. That is very, very interesting. Startups, they're normally faced by challenge building their own team. All of the costs, the hiring costs, the retention costs, and then as a startup, you have one product, probably, and you need five different technologies, and those may not be full-time engagements that you need for all particular technologies.
So, Netsmartz's plays are very, very interesting and a very good role when it comes to startups. We help startups to basically hire resources or build their own team with Netsmartz at lower costs. So, you are not paying those full-time salaries as you pay, probably, in dollars, U.S. dollars or Canadian dollars. You don't pay that much. The operation cost is not that much. This model has really been helpful and successful with startups.
Aderson: Got it. So, I can only imagine that. I don't want to put that generally towards large scale, but I'll push a little bit, because I'm quite sure that you are in a very unique position. I don't know if I will be talking a lot with other organizations that have this size of team as you guys have. You don't need to disclose the name of the clients, but if you pick one current engagement that you have with another company, which one has the larger amount of resources allocated to that project or that client?
Ruby: I would say when a company needs something to get done at the development front, there are two models that they can pick. One is fixed price. You have your requirements ready, and we can estimate the requirements, and we go ahead from there. The second model is when you are not sure about the requirements, they keep on changing. In that case, you hire those resources and you build your team with Netsmartz.
So, not only people engage one or two resources at the beginning, but with the experience, I would talk about the current assignment that you spoke about, I will talk about that as well. Before that, I'm just saying that people, normally companies, they start with one or two developers at a time, and we have seen, in our experience, that we have clients with 15-plus team members with Netsmartz currently.
I have one of my Canadian clients, he started with us last year, and it was a fixed project because the requirements were very, very upfront, very clear, so we estimated the efforts and we gave the fixed price for the project. But then, later on, if it is a product for the client, you always think of upgrading the product. You always think of releasing upgrades every month, every quarter, every six months, up to you. But, you have those upgrades in mind.
At that point, once we release the product, customers, when they like the experience dealing with our developers, dealing with our project managers, they like the experience, they like the association with Netsmartz, they'll retain their team. So, when they retain their team, it's like a BYT model again. You are building your own team for the upgrades, for the maintenance, for the support, for the new features. It's a product. So, you keep on increasing the features, you keep on upgrading the product.
I have a client who started the association last year with a fixed cost, and now he has hired three developers full-time and one customer support executive, and he's Canadian-based.
Aderson: Got it. So, what you are actually telling me is that, usually, engagement starts small and it grows over time, correct?
Ruby: Yes, yes.
Aderson: Got it.
Ruby: You know, there is one more thing. I'm sorry to interrupt you here. There is one more thing. Sometimes people have an in-house team. For example, you have two developers already and you have a small project or small tasks coming up within the product. You hire one more developer from Netsmartz, and eventually people start shifting from in-house to Netsmartz's BYT, because it's cost-effective, it gives the same feeling as you are dealing with in-house team, we have all the tools and techniques wherein we use JIRA for project management, and we have all the communication tools available. So, eventually, when you get the same feel, you don't want to pay extra.
Aderson: Let's flip this large-scale outsourcing to you having a large-scale team. So, again, you have a large-scale team. You have 1,000-plus professionals out there. My question now is - we mentioned last time that we have spoken - usually, companies, they specialize on something. It's tech knowledge, it's design, it's the tech knowledge, it's mobile, whatever it is. They are usually specialist in a particular niche, in a particular vertical, in a particular technology. This is not your case because you have this number of professionals. You have so many areas that you work with. How do you organize that on your organization to be able to tend to so many different audiences?
Ruby: I'll give you one example. For example, you have a mobile-specialized company, you have one design-specialized company, you have one web or any custom web development, and then you have one CRM. You can think of probably combining all those companies into one. What I'm trying to say here is we have structurized, we have structures for every department.
For example, it's design. I won't say that we have a blend of everything at one place. No, it's like specialization for one technology within one department. For example, we have one digital marketing department, or together, that's a different department, and it's a different building altogether. As I said, we have four development centers, and those are huge development centers in India. So, one development center is dedicated for digital marketing. For digital marketing, we have junior teams, and then the hierarchy is their managers, and then we have the director of that particular department.
So, we are managing as if there are multiple companies specialized in those particular technologies. Whatever you get, it comes out as a specialized thing, because we have that hierarchy implemented in the organization for each and every technology. If you talk about, probably, ERPs, or Microsoft Dynamics for example. We have a different team for Microsoft Dynamics. Even the director is different, even the operations head is different. So, that's how we bring in that specialized technology to our customers.
Aderson: Got it. That answers the question very well. Let me run through this point here with you. As I said, we have discussed last time that we spoke about working with an agency with an organization like yours as compared to working with freelancers. I've been a big proponent of freelancing and working with freelancers. But, run with me through comparing one versus the other one. Do you want to run down that comparison again?
Ruby: First of all, freelancing is like you are outsourcing to someone you have never met, number 1. Number 2, whatever he is, that person is showing to you on various portals for example, any of the portals you take a name off. So, whatever that person is mentioning, even if you interview that person. You don't whether the same person is working on your project or not. The credibility, that's the most important, because you are hiring somebody for your work, whatever cost it is. But, you want to make sure that your work is done with 100% satisfaction, and if anything goes wrong, you don't know. That's a virtual thing. You don't know whom to talk with, or probably if that person will be available at the time of prices or not. So, you don't know where the person is located. You don't know how to catch that person if something happens.
When you work with an organization, there is a credibility so you know what the company is. As in the case of next March, we have multiple locations. We even have a local locations. We are in Canada as well. So, you can come down and meet me any day. If anything goes wrong, you can pick up your phone and call me, for example. That's the difference. That's the very important thing to consider. The freelancer thing might come a little cheap to you, but paying a little extra for your peace of mind is a considerable point.
Aderson: I'm going to try to make this point clear, and I'm not sure if I'm going to be able to do a good job here, but whenever in the past that I've dealt with organizations instead of single individual freelancers, I usually felt that there needs to be an extra overhead in terms of communication with an organization. Because, I'm not dealing with the decision-maker there. I'm dealing with an individual that will be working on my project, but he or she really works for Netsmartz, your organization. Is that a con in terms of working with an agency, an organization compared to a freelancer, just that overhead communication is a little bit higher? Not that it's too bad, but just a little bit higher. What do you say about that?
Ruby: I can only talk about Netsmartz how we deal with clients, right? So, in our case, as we said, the BYT model, Build Your Team with Netsmartz. When you are building your team with Netsmartz, those resources are working for you. Sitting at Netsmartz's office, they're using Netsmartz's infrastructure, but they are working for the client. The communication has never been a problem, because whatever a client says, or whatever task is being assigned by the client, the resource is working on the client's project only. He is not working for any other project.
I don't see the communication as a challenge, or as a con, I would say, in the comparison. It is rather pro, I would say. It is, rather, a very, very comfortable communication, because when you are dealing with Netsmartz, I would say you have that hierarchy, again. So, in case you are not happy with the resource, you have the next person you know that, "I need to speak to Ruby." That's the second level communication. I have to speak to Ruby that this resource is not working as per my expectations, or I need one more resource, or whatever.
So, you have the escalation metrics with you when you're working with Netsmartz. Your first level is your resource, your second level is the second person in the metrics, and the third level and the fourth level contact. That resource will not take permissions from their project managers or from their higher management, because he is working for you. So, whatever he is supposed to do on the project, you can probably assign the tasks on JIRA and you can do the direct communication with the resource.
Although he is sitting in the Netsmartz building, although he is working for Netsmartz, but eventually, he is getting paid for your project. So, he is kind of a full-time employee for you.
Aderson: Perfect. That tells a lot because usually, the situation I described, it was more with shared resources. But, I think that you covered that well. I think that you did a great job there. I really liked that. Let's talk a little bit about cost-effectiveness, because one of the main reasons why organizations and professionals they outsource work, when it's time, they need to speed things up in terms of their launch process. But, the other one is also cost, you know? So, where do you see, cost-wise, what Netsmartz offers, as compared to, on one end, I have to hire a local professional, on the other end, I'm going to go on the web and I'm going to find a freelancer? Can you talk a little bit about cost within that range?
Ruby: Sure. Okay, so the first thing I will talk about, hiring a local resource. Hiring a local resource is expensive and time-consuming. When I say expensive, it's the HR cost, I would say, first of all. I mean, screening the candidates, shortlisting, interviewing, and then bringing the candidate on board, and then obviously the fixed package or annual package, and that is obviously on the standard rates we have here, and then the operational cost, the infrastructure costs, and all other costs: licensed software cost, license cost, and then the retention cost. Obviously, you have to pay extra perks to the employee if the resource is good to retain that employee for the long term. Then, if you are short of projects or something, then you have to layoff. That's additional costs, right? So, I'm just talking about all the costs those are involved for a local resource.
Now, I'll take you to the Netsmartz's cost-effectiveness, which we normally -- we talk a lot about cost-effectiveness and we leverage that cost-effectiveness. We leverage that part. The reason is we have our development centers in India. So, first part is this. This is not a pure outsourcing, I would say. This is a blend. You are dealing with a local, you find your contact is local. For example, you're dealing with me, so that's easy. You can call me anytime, I'm also in Eastern Time Zone. So, you don't have to wait for your morning, or for your evening to talk to a person who is sitting overseas.
This is one thing, and let's come to the cost-effectiveness. So, in the next months, we don't charge you anything. We don't charge you HR, we don't charge you retention. Even if we are paying higher perks to the employee, we are not charging you. What we are charging you is we are charging you a monthly cost that is a combination of the salary of the employee, the operations, the infrastructure, and the licenses that we use, software licenses, tools and techniques and everything. And that monthly cost is probably, I would say, 50% lower than you usually pay to an employee.
I mean, half. It's probably half, and that includes everything. That includes everything: operation, infrastructure, HR, maintenance, perks, everything, and there is no -- whenever you can give 30-day notice if you want to lay off, if you want to decrease the team size so it is not a burden on you. So, when you know that the project is getting over or you do not have sufficient work to probably keep more employees, you want to come down to three, you give us 30 days' notice, and that's all.
Aderson: Got it, okay.
Ruby: Again, if you want to ramp up your team size, it's just two weeks.
Aderson: Okay, that addresses that, and of course, it's more expensive than a freelancer, but for the reasons that you've already stated, of course, there are lots of benefits as compared to freelancing. That's great. You have addressed that. Now, my role here is to poke you, so I'm going to keep poking here. Let's talk a little bit about cultural differences, which I think is a major aspect. It cannot not be mentioned about cultural differences from organizations of Americas compared to Europe, as compared to India. Whichever country you're talking about, there will be always some cultural differences. My point being, how do you handle that? Do you think that this is major, this is minor? How do you address that?
Ruby: I would say no doubt, there are differences. I'm not shying away with the fact that there are differences, the cultural difference that we are talking about. But then, our project managers are very, very senior resources, and they keep on visiting the clients in North America. They are familiar with the culture, they are familiar with the working style, and they try to bridge the gap as much as possible. The second thing is our clients also -- I mean, some of our clients we are working with, they visit their team in India once a year, sometimes twice a year. They visit their team. So, this really helps in bridging that gap when you know your client, when you know their style, when you know their workings. You kind of adopt that, because ultimately, you have to work for them. That's how we try to bridge that gap, but it's not a major thing. It's not a challenge but we really work hard for that.
Also, for the communication as well, whenever we hire a resource and he spends one year with us, we start preparing our resources for this BYT model. So, we give them language trainings, we give them trainings for certifications, technical certifications so they're kind of prepared when we bring them for the client, so they are well-prepared and they are trained in such a way. We try to bridge that gap as much as we can, and that kind of association, this model has been successful over the years. We have been doing this kind of partnership with the clients. It's been successful.
Aderson: Perfect, very good. Coming towards an end here, Ruby. There is one thing I would like to ask about. We still have companies that don't outsource much, and from your experience, based on the clients that you have worked with, approached, over the years, you have many, many years of experience there. What is the number one reason that people might be hesitant on doing some outsourcing not only with your organization, but in general, about outsourcing in general? What is one of the main reasons why people are still, "Outsourcing? I'm not sure I'm right for that"? What would you say?
Ruby: No, you have actually asked the right question. Many people hesitate to answer this because when you look for cheaper resources. I mean, internet, you Google it and you find resources everywhere, freelancers, right? So, when you hook up with somebody who is not right for the project, I would say, not the right skill set - probably the person is very good technically, but not right for this particular project. But, you are looking for a cheaper resource, so you hire a wrong resource for your project sometimes, and that happens many times. So, if you are hiring the wrong person or the person is not understanding your project well, and for whatever reason, you have had bad experience outsourcing, right?
There could be many, many reasons I would say. Looking for a cheaper resource and the person is not a right fit for your project, or probably there was a problem in communication. Because, there is a difference in time zone as well. So, sometimes a person understands the resource, understands the requirements, but the communication is a challenge. Sometimes the client is not available, the resources, because he is a freelancer. He must be doing many other projects as well, along with this one. A little lack of those kinds of considerations while hiring a resource will make your experience bad.
Aderson: Got it. So, they had previous experience and they were left with a bad taste in their mouth, correct?
Ruby: Exactly, exactly.
Aderson: Okay, that's good. That's a good one. Coming to a conclusion here. Ruby, is there anything that we haven't mentioned - and I want to be cognizant of your time here, you have something to go for - but anything that we left that was not mentioned and you feel that it's relevant, not only for Netsmartz but for the outsourcing topic in general, anything else?
Ruby: Yeah, it's my opinion that people outsource, they only consider price while outsourcing. I know it's a big thing to consider. But, considering only price sometimes ruins your experience. It's my opinion that the communication, the process that a company follows for this and the technical abilities or technical skill set, the right technical skill set required for your project. So, we must consider all those aspects before going for outsourcing. Outsourcing is a broader concept, so look for minor things as well.
Just price, price is one of the components. But, other than price, there are many other things to consider, like communication: the person you're talking about, the right skill set, the nature of your project, and the person whom you're hiring, his experience with that kind of project. There are many other things that needs to be considered, and that, I think, one should consider all of these things other than price.
Aderson: Perfect. How can people get in contact with you if they need more information? If they need some assistance with Netsmartz, how can people contact you?
Ruby: My Skype is very simple. It's Ruby, R-U-B-Y M-E-H-T-A, my last name, Mehta. RubyMehta is my Skype name, so anybody wants to get in touch with me, just send me a request or look for me on LinkedIn by typing "Ruby Mehta Netsmartz" and connect with me. I'll be very happy, very glad to assist if anyone is looking for any suggestions
Aderson: Perfect. Ruby, thank you very much for your time. I really appreciate you, the openness of answering those questions, and again, thanks for the time.
Ruby: No problem, any time. Thanks a lot, Aderson.