Guide to Outsourcing Development

Let’s say you’re a rookie business owner launching your first tech start-up, but you don’t have a technical background. Or maybe you’re a serial entrepreneur on your third or fourth company and have a basic grasp on understanding technical languages. Maybe you’re even at the head of an enterprise company that employs thousands of technical professionals.

Whichever category you fall under, once you begin to seriously consider the most strategic method to scale your business you’ll probably at least want to consider outsourcing as a long and/or short-term solution to hiring technical professionals.

The fact is there are hundreds of horror stories of outsourcing gone wrong, and without a finely tuned understanding of how to manage an outsourced team, your business could be finished before you even start. So how do you hire the right team to make sure you’re building something that won’t collapse in on itself?

Luckily we’ve got your back.

In the following post we’ll describe some of the best hiring practices for onboarding outsourced talent, what a hiring manager should know about setting up a project pipeline, and how to pay your team (including advice on whether you should hire an outsourced development team for an hourly wage or on a fixed contract). Let’s get to it!

If outsourcing from a different country, you should have a deep understanding of the country’s culture, and if at all possible visit it

This may sound both like a distraction and a totally inefficient way to spend your company’s time and money, but in the long run this kind of forward thinking could bring your company some of its best-outsourced work.

Entrepreneur, Rebekah Campbell learned this the hard way when she started out with an outsourced team of developers from a country whose culture she was unfamiliar with. Initially her team was value driven and professional, which was good, but she always seemed to lose her best team members as they were constantly being moved from project to project by their home managers. In the end she never worked with anyone who really cared about what she was doing.

Campbell states, “These employees all ran hundreds of projects at once. And I never spoke to the […] team, which had no clue about the business problem the app was intended to solve; they simply received instructions from guys who didn’t really care about my project. The result was a buggy product that crashed constantly, a disaster we had to scrap.”

Later she decided to research outsource-teams in Manila, and, as part of her research she included a trip to Manila. By going there in person, she was able to learn about the culture, find out what people were passionate and curious about, and then think about how those values would be reflected in her own business—and more importantly, the way she planned to manage her outsourced team.

By connecting one culture to another, Campbell ultimately created a team that was loyal, excited, and inspired by her business.

Bottom line: by learning about an outsourcing team’s country and culture you will ultimately better understand the fundamental differences in learning styles, communication, traditions, and even their sense of humor—all of which are hallmarks of being able to work efficiently with employees.

If you’re going to commit to building an outsource pipeline, you MUST be able to accept, embrace, and accommodate cultural differences for your company to be able to best take advantage of an outsourcing strategy.

Hiring Process

As a general rule you never want someone who’s only working for the pay—they’ll never give your company the best work it deserves. The only way to get around this is to be extremely comprehensive in your hiring practices—so don’t short sight this aspect when hiring outsourced talent.

The first thing you’ll want to do is to create what is sometimes referred to as an Outsourcing Steering Comity which is made up of employees from each section of your company as in the legal staff, HR, and business department, etc. This team will be in charge of vetting each potential outsource firm, and their primary goal will be defining your company’s objectives and goals. Have your team answer these questions in order to define your company’s goals in outsourcing:

• What do you want to outsource?
• Where are the offshore outsourcing locations your company is interested in?
• Why does your company want to outsource now?
• What services do you need?
• How much should your company spend?
• What are the risks?

After answering these questions you’ll then want to find out all the information you can about the potential outsource firm(s) you’re interested in utilizing. You can do this by creating a request for information, or an RFI. This is exactly what it sounds like, you issue a questionnaire to the firm(s), then match the answers to your company’s needs.

The last step in vetting an outsourcing firm is to administer a test project—especially if you have two firms in mind. Have the firms execute a project and then have your core team evaluate it. Has that project been completed within the guidelines and timeframe?

Once you have a framework in place for vetting an outsourcing firm, the path to integration becomes objectively more clear.

Management

Whether you’re a CEO who wants to manage a small team of outsourced talent yourself, or would like to hire a project manager, there are many things you can do to make sure your team is working effectively—even from thousands of miles away.

First make sure everyone is working on the same files. Randy Chou, CEO of Panzura, states that you should “Enable globally distributed teams to collaborate as if in the same office by ensuring that there is a single authoritative version of a file. […]” This, essentially, allows teams to work on the same file at the same time without overwriting work of others.

The next thing is to have excellent management software. We at Icreon are in the business of building custom software that helps companies manage projects, but we also use tools like Asana which work well too—and which are relatively inexpensive off the shelf solutions.

If you decide to hire a project manager there are several things to be taken into consideration. Project management requires a highly specialized skill set—specifically it means a person who is able to see your company’s big picture, while still keeping an eye on the finer points. In addition your PM will have to juggle many balls at once: motivate a team’s morale, manage schedules, and keep everything within the scope of your business.

A good project manager can be an excellent moderator between clients and the team—not only can he/she make sure all needs are translated accordingly, they can do so in a way that makes sense for both parties.

Fixed rate or Hourly Wage?

Now when deciding whether to go with a fixed rate or an hourly wage there are some important things to take into consideration: is your project long-term with constantly changing requirements in need of a resourceful team? Or, is it a project with a well-defined scope that features established goals and methodologies for achieving them?

If you picked options 1, then it sounds like you would need a transparent but flexible pricing model—one that can accommodate the project’s changing needs.

If you picked option 2, then a fixed rate may better suit for your needs.

Outsourcing opens your company up to investing its time and resources on its core needs, which allows for much more growth and development. However, in order to avoid an outsourcing nightmare you have to invest time and energy into deciding what the best hiring process is, how to communicate efficiently and clearly, and even what the best way/amount to pay the team is.

Remember: an outsource team is not a blank resource providing you a service for fee—if you look at the team that way you’ll never get the work your company needs. However, by recognizing the talent of your team, and then monitoring the working process, while allowing for flexibility—you will get the best out of an outsourcing opportunity.

How to Maximize Outsourcing

Even the greatest app idea is useless without an effective road-map for development. While full-time developers and designers may be outside a founder or entrepreneurs budget, there are other options. Outsourcing development to a third-party consulting firm or a freelancer is an economical and effective means for building a go-to market app quickly.

Below please find a list of the top ways to manage outsourced development that results in a quality application:

Collaboration

Few successful apps are developed without a cross-collaboration between business leaders and technical experts. Without a unified vision of the back-end engineering’s impact on the front-end experience, an app can quickly veer off track.

Developers should consider the end-user experience. And designers should understand how to present features in an intuitive way. Collaboration is key to an end product that looks great on the outside and functions smoothly internally.

Requirements

Prior to deciding on a final choice for a development partner, your team should list pertinent requirements that are crucial to the app. With those basic necessary requirements defined, the quote provided by a development partner will be much more precise.

Once a project is formulated, both teams should segment the process into phases. Devote time to wire-framing, design iterations, and user acceptance testing (UAT) towards the end. With a well-defined road-map for achieving business requirements in place, projects are less likely to fall off the rails.

Timelines

Setting deadlines and envisioning a clearly defined scope is crucial for launching a product on time. Timelines are also crucial for ensuring that processes were followed accordingly. Once a set deadline is chosen, development teams and internal leadership can plan for iterations, feedback discussions, and other proactive means to refine the app.

One of the biggest drivers of budget overruns stems from missed timelines. By setting feasible yet stringent deadlines for each phase of a project, development teams are given specified guidelines and business leaders can plan accordingly for launch dates, marketing, and eventual updates down the road.

Iteration and Feedback

Business leadership should invest their time into providing feedback and assessing progress, even if they lack any technical knowledge. While developers may see the logic in a certain design or feature implementation, the impact on business processes will not be clearly understood.

Championing buy-in from leadership and incorporating their feedback and insight into the development process is critical. The more time that leadership invests in communicating with the outsourced team, the less likely a project is to move ahead blindly.

Some Points to Keep in Mind During Outsourced Development

Although outsourcing is an impactful means for building an app, there are caveats to managing outsourced app development. Be sure that the firm in question adequately understands the vision and strategy behind the app. By investing upfront in thorough communication and strategy, the development process will roll out smoothly.