Maksym Petruk, Co-Founder & CEO at WeSoftYou, passionate about the power of innovation and balanced software engineering.
The Covid-19 pandemic forced many companies to seek help through outsourcing to adapt quickly to unprecedented challenges. Even during economic downturns, outsourcing is still a viable solution. That’s because companies face an expanding scope of work with a diminished workforce due to massive layoffs.
However, the key question remains: Why do some companies succeed in collaborating with outsourced software development teams while others fail? According to the Deloitte Global Outsourcing Survey 2022, only 10% of organizations prioritize strategic partnerships with third-party service providers, which potentially causes the project’s failure.
The Main Cooperative Models Of In-House And Outsourced Teams
Managing in-house and outsourced teams involves different expectations and dynamics. Outsourced teams usually offer more flexibility in terms of deadlines and communication. However, recognizing different priorities is crucial. An agency may prefer long-term, costly cooperation with decision-making autonomy, while you may need swift, cost-effective collaboration.
The way you engage with your outsourced teams depends ultimately on your principles and priorities. Due to these approach variations, several types of collaboration with outsourced teams have emerged.
Striking The Right Balance With Project Work
Project tasks are completed within set deadlines, based on fixed prices or time and material terms. Choosing the right contractor is crucial in this model to avoid the “Death Valley” scenario.
Success here lies in engaging a vendor with solid project management skills and the ability to handle client expectations. Other critical factors include a proactive approach to requirement gathering and excellent technical expertise.
Key Success Factors:
• Ensure detailed requirements with visuals and realistic expectations for software development.
• Understand software development intricacies to hire a team that won’t make empty promises.
• Select an agency experienced in discovery and business analysis, ready to structure requirements, make estimations and develop a realistic project plan.
To assess an outsourced team’s suitability, focus on their expertise and case-relevant references, not just their overall software development background. Evaluate documentation, reporting and project structuring. Assess their approach to timelines, project scope and customer expectations. Finally, understand how the contractor addresses project failures, missed deadlines and setbacks.
Achieving Alignment In Dedicated Teams
Companies allocating part of their annual development budget to outsourcing often prefer a dedicated team managed by an agency, dealing with both in-house developers and external agency staff. The crucial aspect is effectively merging the processes of these organizations.
Establishing a dedicated team through outsourcing requires careful integration into existing operations, clarity in roles and productive communication.
Key Challenges For Integration And Their Solutions:
• Misaligned Responsibilities And Expectations: Clearly define and communicate individual roles. Use the Responsible, Accountable, Consulted, Informed (RACI) matrix to specify each team member’s responsibilities.
• Inadequate Process Integration: Implement a cohesive process aligning the dedicated team’s software development life cycle (SDLC) with your organization’s SDLC. Use a well-defined version control management (VCM) approach for code synchronization, branching and merging. Leverage CI/CD daily builds and code style guides.
• Communication Barriers: Foster a culture of open communication and establish regular synchronous and asynchronous communication channels.
An external agency takes a large portion of responsibility for your project. Defining milestones, motivating the team and providing them with the North Star Metric (NSM) are crucial steps to making the most of their expertise.
Managing An Extended Team Of Outstaffing Engineers
Outstaffing involves integrating external engineers directly into your team, requiring hands-on management. Challenges here include maintaining interest, fostering a sense of belonging and addressing high turnover rates.
Effective Strategies For Outstaffing Management:
• Maintaining Engagement: Encourage open communication and regular updates on the project’s impact and goals.
• Fostering A Sense Of Belonging: Include external engineers in events, meetings and discussions to integrate them smoothly. Recognize and appreciate their contributions to create a feeling of being valued as a part of the larger team.
• Eliminating High Turnover Rates: Conduct thorough onboarding and orientation to familiarize engineers with the project and team dynamics. Offer opportunities for skill development and career growth to encourage long-term commitment.
• Ensuring Background Checks: Verify that your outsourcing partner conducts in-depth background checks and maintains strong HR support.
All in all, success depends heavily on your unique needs and careful vendor choice.
Six Considerations For Choosing The Right Outsourcing Model And Vendor
Picking a suitable outsourcing model and vendor is the way to avoid failure and make your project succeed. To make a wise decision, focus on the following considerations.
Assessing Project Scope And Scale: Understand project size, complexity and specialized skill needs. Consider whether you grasp the scope and can structure it in the project without heavily changing it along the way.
Evaluating In-House Capacity: Check if your team has the necessary skills and bandwidth to manage software development. Determine whether you can handle the project or need a vendor with strong consultancy skills.
Analyzing Budget And Flexibility: Consider budget constraints and the ability to scale resources as needed. Do you operate a fixed budget or have annual planning in place? Is your budget flexible or based on the “last out-of-pocket” approach? Finally, are you willing to pay monthly or based on project delivery?
Evaluating And Planning For Risk, Quality And Scalability: Identify risks and select a model that addresses them. Assess quality requirements and scalability needs for each model. Ask yourself questions: “Am I prepared to choose motivation and involvement over strict deadlines and fixed prices?” and “What’s my risk management approach if something goes wrong?”
Selecting The Appropriate Model: Choose between project work, dedicated teams or outstaffing depending on your requirements, budget and stakeholder input. Ensure you select one model and stick to it. Trust your partner and work as a team toward success.
Establishing Clear Agreements: Put down all primary arrangements and milestones in email or SOW. Note that creating overly extensive contracts can strain relationships. However, documenting all agreed-upon terms is still vital.
Choose what’s best for you, and good luck finding your ideal vendor. Countless companies have achieved growth in their tech operations through diligent research and professional consultation. To ensure success, continuously monitor progress, gather feedback and be ready to adapt the chosen model for the desired outcomes.
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