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Should You Outsource? Guest Post Erik Wind.

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Should You Outsource?

I was at a recent industry event and was talking about application development teams with a fellow tech company when it came up that part of my development team is overseas.  The person’s response was “Oh, we tried to outsource once, they didn’t work out, so we stopped.”

I didn’t pursue the matter, but part of me wanted to ask a question such as “Do you know why it didn’t work?”  I was proud of myself for keeping my sarcastic side quiet and not asking “Ever hire someone that didn’t work out?  So why do you keep hiring people?”

Having been working with an overseas team for nearly six years, and having seen a strong amount of success, I realize that there are many scenarios where outsourcing isn’t going to work, but other times where it will.

While the definition of outsourcing simply means to purchase or subcontract to an outside and often foreign source, there’s also a further implication that the outsourcer relinquishes all ownership of the task to the outsourced.  For example, if I bring my car into the dealership for an oil change, that’s an outsourced job to me.  I have nothing to do with the task other than paying for it.  But in the case of software application development, why is there an assumption among some that it works the same way?  How could it?  Perhaps that’s one reason outsourcing fails at times.

We all know the reasons why outsourcing is attractive: The possibility to save money, time, and/or improve efficiency.  But if it were that easy, it would be mainstream with more success stories.  Let’s explore the harsh difficulties involved with outsourcing, and see if you have what it takes to do it.

Time Zones:  While there are countries that are on a similar time zone as the United States, many are not.  One of the more common countries to outsource software development to is India, where there is a ten and a half hour difference between there and the East Coast. If you want to be able to communicate regularly, someone has to shift their hours.  If you’re going to start your day in the middle of the night to communicate with your developers, the reality is you’re probably not going to end it just because your development team goes home – now you have to deal with the operation stateside.  While you may be saving money, you’re certainly not saving time or improving efficiency.

The time zone challenge can be overcome with some compromise.  Do you need to be working the same hours together every day, or just at certain cycles of the project?  Can you shift a few hours back and the foreign team shift a few hours forward?  It will probably cost you more to do so.  Just remember, as long as you and your outsourced team aren’t vampires, long periods of absence from the sun can cause fatigue, depression, or outright grumpiness.  Find your balance.

Communication Challenges:  Most of us are savvy enough to know that thanks to modern technology such as email and voice over IP, you’re not going to rack up massive long distances charges communicating with foreign parties.  But, is there a loss of translation with an outsourced party?  Many complain about this, but I haven’t experienced it so much because requirements are never issued verbally, but instead precisely put to ink (figuratively). If there’s anything unclear in the requirements, they’re discussed and clarified early on.  Testing is performed to ensure that requirements were adhered to, and testing is also the opportunity to realize that perhaps poor requirements were followed, and revision to the requirements is necessary.

Everything I wrote above implies that you have the technical acumen to issue precise technical requirements.  If you don’t, then outsourcing becomes that much more challenging.  Having a software engineering and real estate background, I find it easy to bridge the gap between these two groups, letting business rules transform into their equivalent technical requirements.  If you don’t have a person who can do that, the deck is stacked against you whether you’re outsourcing or not.

Here are two objecting sentences I hear once in a while when it comes to outsourcing, and my reaction to them:

I’ll have to go there, if I want this to work:  Maybe, but I’m not sure you know why you think this.  This is the age where telecommuting has taken off.  Nearly every large enterprise has some work from home policy or accommodation.  I don’t hear managers saying “I need to sit in Bob’s living room if I want his employment to work out.”  So why is this any different? This brings us back to issuing precise technical requirements. If you can’t do that, talking over Skype or in person isn’t going to make much of a difference.

It’s taking jobs away:  I’m much more sensitive and understanding on this point, as I once wrestled with the same thoughts.  By outsourcing certain tasks overseas, am I hurting the economy?  I now say with confidence, the answer is no.  By successfully outsourcing, my company’s development costs are less than they’d be otherwise. That savings gets passed to our customers.  Furthermore, our company’s success has led to growth that has created and sustained numerous jobs stateside.  We wouldn’t have the quantity and quality of employees we do now if we didn’t make smart financial decisions elsewhere.  I would hate to see the next million dollar job-creating startup fail because they didn’t consider outsourcing for this reason.

In summary, you can never outsource accountability.  Whether your team is 10 feet away from you in the same office, or on another continent, it’s on you to ensure that you’ve put together the right people to succeed.

Should You Outsource? Guest Post Erik Wind.

Connect with Erik: @ebwind

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  • Tanya

    Outsourcing has its up and downsides. So some companies do it and some don’t. We have found a model that allows to save more and retain control over the offsite team – Outstaffing. It’s more cost effective and gives more management control. You can comunicate with each member of your team and be sure it’s not a bunch of grads working on your project but actually skilled developers.