Outsourcing often fails and often succeeds. You choose.

First of all, there are thousands of opinions and never-ending debates about outsourcing. Outsourcing being a trend at one point of time was replaced by insourcing, then to some extent followed up by nearshoring and remote in-house development centers. The practitioners usually base their positions on personal experience. Being a network of professional software companies we have seen or got to know much of both: failure and success cases.

The reality is that a significant proportion of outsourced projects fail (~50% according to Aberdeen Group) and, yes, the skeptics have solid grounds for their conservative position. The bigger examples include Digital Production System (abandoning 100m GBP project) by BBC or even ObamaCare website (significant hang-ups).

However, inside the whole clutter of failure you may find very solid success cases. The examples include Kayak (outsourcing), Linkedin (offshore dev. centres) or Wix (offshore dev. centres).

The bottom line is that you may say both “outsourcing doesn’t work” and “remote teams is the way to go” and be right at the same time. As in many business cases, it’s all about people and execution.

Outsourcing

There are many success factors in fruitful remote software development, yet let us start with a shift in fundamental mindset. Outsourcing is usually associated with passing low skill tasks, top-down approach and strict control. It’s accompanied by a habit of choosing cheaper providers. Now can you stop for a while, breathe-in, breathe-out and simply think. What would happen if you applied the same principles to your recruitment strategy? What would you get if you strived to hire the cheapest candidates? What would occur if you did not trust them, micromanage and most importantly “motivate” them by giving low priority tasks? I think it’s probably safe enough to say that it would contradict many modern HR practices. This is where we come to outsharing as opposed to outsourcing.

Outsharing

Outsharing is a mindset of having an equal partner, who understands your (business) case, reads between specification lines and develops solutions, which drive real value as opposed to cooking features one by another. An outsharing partner is like your external CPO/CTO. He analyses your case and constantly provides with optimising development solutions to achieve more by doing less. Such partner is capable of solving complex problems and developing scalable solutions. Outsharing development companies are empowered and motivated by trust, solid responsibility and decision making. The term itself was elaborated on the term offsharing proposed by Audrys Kazukauskas from the Kayak builders NFQ.

Outsharing is based on dealing with everyday challenges of remote teams and most importantly ability to build value.

Key challenges and quick tips

A quick overview of the key obstacles in managing distant teams would include physical distance, different time zones, cultural biases, language barriers, the network speed and others.

The answers to these challenges are worth separate and in-depth analysis. Yet, in a nutshell the physical distance creates miscommunication, which is at the core of many failures. To counterpart it personal commitment of team members, daily standups, proper tools (Skype, Slack, video conferencing) and especially temporary relocation are recommended. You will not do too much about the time-zone difference except temporary relocation or choosing partners, which are in similar time zones or actually match yours by their personal effort. Similar story goes with cultural biases and language barriers. Even though there are some tactics to grow together, the core solutions lay in choosing someone with proper experience and an “Erasmus alike” employee exchange. 🙂

Value orientation as a true differentiator

Being able to solve the challenges above is just the first step towards outsharing. It’s core is still the value added mentality and ability build more value to the customer with less time and resources. A solid partner will often argue you to remove the features, stay lean and agile as well as to properly extract and act upon user feedback. The basic fundamentals for developing are proper choice of partner, trust, empowerment and commitment to cooperation.

The road to an outsharing-based relationship is like marriage – long, demanding trust, dedication and commitment, yet very rewarding and fulfilling in the end. We will cover more of it in our future posts.