Rural Sourcing, Inc.

 

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March 23, 2015 Issue

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Cost Effective Software Development and Maintenance

 


Monty Hamilton

CEO

 

Rural Sourcing, Inc.

www.ruralsourcing.com

 

Interview conducted by:

Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – March 23, 2015

 

CEOCFO: Mr. Hamilton, what is the concept behind Rural Sourcing Inc. or (RSI)?

Mr. Hamilton: The concept is to provide a cost effective alternative for companies looking for software development or software maintenance for their systems. Instead of going offshore, we offer comparable costs, and we offer a superior experience by doing that here in the US. We have software development centers that are in smaller tier-two cities where there is a lower cost of living but a high quality of life. We then create this “Google-esque” environment where we hire talented software developers and software engineers enabling them to work in their hometowns.

 

CEOCFO: Do many companies equate outsourcing with second-tier cities or do they see it as something done overseas?

Mr. Hamilton: Most companies today do not think of tier 2 or tier 3 US cities when they think of outsourcing. Most of the time they immediately think of the Philippines, India or maybe Eastern Europe, which have traditionally been the largest markets for outsourcing for US based companies. However, the outsourcing model has matured to the point where there are many locations across the globe for sourcing IT professionals. The US is somewhat new to that mix of outsourcing locations. Rural Sourcing was one of the early pioneers in the early 2000s that began thinking about how we could keep that work onshore in the US but still do it at a cost that was competitive with offshore labor. The way we have done that is by finding these low cost locations where we have a concentration of talented IT people and nearby colleges and universities where we recruit. They are smart, creative and highly dedicated professionals. However, for a variety of reasons, usually lifestyle reasons, they have decided to remain in smaller cities.

 

CEOCFO: Do you find that people who are choosing to live in the environment might relate better to their customers or have a different sense of how to conduct business than some of the big city people?

Mr. Hamilton: Of course, I think what comes with our US-based solution is the inherent ability to act in a client-service type role working collaboratively with our clients. In our business model, RSI is looking to take ownership of our client’s problems and quickly find a solution for those problems. The other advantage that RSI has over offshore alternatives is the understanding of the US business processes and how the software supports that specific process. When you have the business and industry contextual understanding it makes it much more efficient to build software that elegantly supports the business needs.


CEOCFO: Are you surprised that companies are still looking or is there still the cost factor that trumps everything else?

Mr. Hamilton: There is certainly still the cost factor component. However, rather than just looking for the lowest hourly wage, more and more companies are looking at the total cost of ownership and/or outcomes based pricing model. What I mean by that is that procurement groups and CIOs are adding up the total cost to develop and deploy a software solution that includes productivity factors, quality factors, risks, travel time, down time and a host of other factors as they weigh the true costs for software development. When companies do this they quickly see the value of RSI’s low cost domestic model. The other model that is growing in popularity is an outcomes based model. In these models, for instance, companies are willing to collaborate with RSI to share in the cost savings generated by the software solution or to share in the profits of a commercial solution.

 

CEOCFO: What types of companies are coming to you for services and how do they find you?

Mr. Hamilton: When I wrote the business plan for the company and thought about whom our clients would be, it seemed logical that they would be mid-size manufacturing companies based in middle America who had yet to outsource IT, but I could not have been more wrong. Today we conduct about 85% of our business with Fortune 1,000 companies or large multi-billion dollar privately held companies. These large companies have many alternatives in terms of how they solve their shortage of qualified software skills. Yet they come to Rural Sourcing because they want to eliminate the offshore risks, want a lower total cost of ownership or they have a driving need for speed to market. As for how they find us, it tends to be a lot of word of mouth and referrals between the C-level executives or industry analysts with whom we have worked. Additionally, we speak or present on the unique advantages of US domestic sourcing at a number of industry conferences throughout the year.

 

CEOCFO: How do you handle a business where you have a number of locations and people working somewhat independently? What is your business strategy and philosophy of how to make that work well?

Mr. Hamilton: One of the key things is having a strong culture that is common across all of our locations. The way we talk about this is that we have a set of core values that everybody in the company adheres to, believes in and really takes to heart. Those values drive how we treat our clients, how we treat our colleagues and how we give back to our communities. After that, however, we know that each office is going to have a little bit of its own unique personality based on the people who work there and the leadership in those places which is perfectly fine. Culture is a huge thing we think about and work on and is what really sets us apart from other companies.

 

CEOCFO: How do you know when you are hiring someone or one of your people is hiring someone that they have the intangibles and really understand what the culture is and are in sync with it?

Mr. Hamilton: It is a large part of what we do during our interview process, and it is a lengthy process. When potential RSI colleagues apply for a position, we go through at least six interviews. The easy thing is assessing the technical capabilities. The more difficult and esoteric thing is the cultural fit. We have the candidate spend time with their peer group; less experienced and more experienced RSI team members. Then we bring together all those RSI colleagues at the end of the day and make sure that every single one of them is comfortable with that person being a member of their team. The other way that we ensure cultural fit is through our internal referral program. We know that a candidate who comes from an internal referral already understands and “gets” the culture and our value system. Our existing RSI colleagues want to make sure that any new hire referrals from them are well received by the rest of the organization.

 

CEOCFO: How is business these days?

Mr. Hamilton: Business is great. We opened up a new center in Mobile, Alabama less than a year ago now, and by the end of the year we will have 100 people in that location. By hitting this milestone, we will kick off our internal process to identify our next location. So by the end of this year, we will know with a high probability where center number four is going to be located. We will continue aggressively scaling up the business largely through organic growth as we have the infrastructure, processes and the sales and recruiting engines in place to execute our plans. We will also look at non-organic opportunities as they present themselves.


CEOCFO: Do your clients care where your people are working? Do they look for someone who is near them or do you decide where the projects go?

Mr. Hamilton: They really do not care since they know all work is completed from one of our software development centers. All of our offices employ a common methodology and a common set of software development processes so that our work whether done in Alabama or in Georgia works the same way. As long as the work meets or exceeds the client’s expectations they are not concerned which development center is doing the work. While some of our facilities have centers of excellence, say for SAP, Salesforce or LabWare there is a core set of skills that are common across all of the centers such as Java or .NET development.

 

CEOCFO: Would you give us an idea of the range of projects?

Mr. Hamilton: I would be happy to give you a couple of examples. We are currently helping a client migrate an ERP system that is very specific to their industry from an old Visual Basic technology platform over to a newer .NET technology platform. We are taking what they had in place and then migrating that to a much better, more scalable technology platform. A little more out of the box project is a company that owns a popular TV series based in medieval times. We have been working with them on developing a mobile application where their viewers could interact with that application and with other viewers while the series is playing on TV. That is an exciting project for several of our colleagues who get the chance to work with that app. If you ever want to talk to them, they would talk to you for days about the work they are doing and how excited they are to be doing something that cool. Finally, we are working on a big data analytics project that will enable our client to optimize the resell value of their assets based on consumer demand.

 

CEOCFO: How do you help a client in providing the best possible solution today knowing there will be new technology, systems and ideas that might trump what you have planned? How do you plan for today and for the future?

Mr. Hamilton: One thing for sure, you cannot let the fear of perfection get in the way of progress. Six months down the road, there may indeed be a better and newer technology that you wish you had. However, if you continue to wait on that, you will never get anything done. The best way to help clients with those kinds of decisions is putting our best technology architects with diverse points of view in the same room with the clients to understand the business requirements and the overall IT strategy. The outcome of this destination mapping session is an agreed upon solution and the roadmap to reach that destination. The dialogue and the back and forth between our solution architects, the clients IT staff and the business owners results in an optimal solution that meets the clients collective needs.


CEOCFO: Put it all together for our readers. Why choose Rural Sourcing?

Mr. Hamilton: I consistently see three major factors why our clients choose Rural Sourcing. The first major driver for a client is the need for speed to market. The domestic sourcing model enables RSI to assemble a team and get them to a highly productive state in a matter of days not the months associated with offshore teams. Further, RSI offers our clients an agile development methodology allowing us to be responsive and nimble to ever-changing business needs and priorities. The second driver is the desire to minimize the risk of working with software solution providers. By keeping work onshore, many of the risks associated with offshore are eliminated altogether. In addition, RSI’s comfort level with the regulatory requirements in certain industries further reduces the risk of developing software that complies with US regulatory requirements. For instance, we work extensively in the pharmaceutical and healthcare industries where experience and knowledge of the regulatory environments is a requirement for software development and testing. The third key driver is the total cost of ownership. In the past, there was a very simple mathematical exercise to say this piece of work cost me X dollars per hour in India. Today, that equation is much more complicated. Companies understand the overhead associated with offshore software development, and have begun to factor that into the total costs. When companies now look at Rural Sourcing and take into consideration all the costs of going offshore, RSI offers a cost competitive solution with other global destinations.

 

CEOCFO: Final thoughts?

Mr. Hamilton: When you look at the overall maturation process of outsourcing work, offshoring is a mature model. Domestic sourcing or rural sourcing, on the other hand, is the new kid on the block. Being a disruptive player in a $300 billion outsourcing industry is an exciting, fast paced, fun place to be. In today’s IT world of agile cloud-based solutions where change is the only certainty the domestic sourcing model will continue to win our fair share of converts from the old offshore model.



 

“Being a disruptive player in a $300 billion outsourcing industry is an exciting, fast paced, fun place to be. In today’s IT world of agile cloud-based solutions where change is the only certainty the domestic sourcing model will continue to win our fair share of converts from the old offshore model.” - Monty Hamilton


 

Rural Sourcing, Inc.

www.ruralsourcing.com

 

Monty P. Hamilton

404-873-9500

mhamilton@ruralsourcing.com


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