Don’t Just Outsource Your Product Development: Treat It Like Your Own External Team
Although there are a quite a few benefits to outsourcing project work in product development, there can also be pitfalls that set efficiency against cost savings, resulting in more work for your firm. One of the most popular ways to counter potential problems is to set the environment in your organization so that outsourced product development workers are treated like an external team.
Here are some ways to approach making changes that can enhance your results on your overall approach:
Focus on synergy:
One successful software product development firm adopted a strategy of keeping team leads in the United States and then outsourcing all development to their outsourcing partner in India. They were able to achieve productivity gains through synergy by focusing on finding a partner that could meet their cost/performance requirements. Once they made their decision, they spent extra time and budget on developing a strong working relationship with their counterparts, introducing the software product development people overseas to their company culture and work processes. They begin to see a return on their investment after the first few months of project work and have not looked back.
An important part of emphasizing synergy can be to have your key managers or executives spend time with the people that you will be working with in advance of engagement start. The more that they can learn about capabilities and tendencies, the smoother the ride will be.
Metrics are important:
If you talk to tech executives involved in software product development you will likely hear tales of partners that worked out and others that turned out to be a larger cost than they might have paid if they were doing things in-house. The curious thing is that although North American firms have been outsourcing for a few decades, finding a partner that meshes well with your expectations in the short term and the long term is not an exact science.
Metrics, therefore become a pretty important part of helping you to establish and maintain control of the development process from a cost standpoint. An important component of project work is looking at integrating ROI into what you do with your outsource team. If you have solid data from previous projects, you should be in a good position to homogenize it and use it to build potential comparisons with your upcoming work. It is a good idea to see if you can separate the data beforehand, keeping any projects that didn’t emphasize building external teams apart from data from projects where you might have. That way, when you run your numbers as your project progresses, you will be able to see precisely how much your synergy efforts are paying off.
Overall, the trend of late among companies that outsource is to continue to look at ways to integrate their partners more. And whether that takes the form of keeping your managers local and managing the teams directly or building relationships with multiple vendors so that you can utilize their strengths, the upshot is that if you do integrate more, treat outside engineers as your own team and use metrics like ROI to help guide your performance, you will get better results.