September 12, 2022 • 6 min read
*This article was first published in Frederic Joye’s LinkedIn newsletter, Culture-Focused Outsourcing*
A lot of people freak out at the idea of outsourcing. They think the loss of control, communication barriers, onboarding hassles, different timezones, poor output quality… Honestly, I could go on and on.
And I don’t blame them! As long as we’ll keep hearing outsourcing horror stories, these myths will persist.
Now I’m not here to wag my finger at who’s to blame for these stories. I’m here to recognize the common fears that business owners have about working with remote software teams — and how these are unwarranted when you’re in the hands of the right outsourcing partner.
Mark Nimco, the co-founder and CTO of Australian fintech startup Payment Logic, had those fears too when we first met five years ago.
Today, as Payment Logic continues to enable businesses to make payments while earning cash flow and rewards points, it has become one of the fastest-growing companies in the country, advancing from $100M to close to $2B in payments processed when it started working with Arcanys.
Skip all the way to this part of the video to know their story:
Let’s be clear: no business owner is immune to the anxiety of handing over the vital responsibility of their development process to an outsourced software team provider.
So let me break down the common fears about outsourcing and the reasons why, if you’re in the hands of the right provider, you really shouldn’t worry at all.
I admit, there is no communication tool that can replicate the level of interaction and engagement of a live conversation.
But how many of your interactions with your internal team happen in person these days? Location is a thing of the past. Remote work, either partial or full, has become the norm for most tech companies – and working with an offshore team should work the same way as working with a local team in WFH mode.
I believe that managing remote teams of devs is easier and more efficient if these elements are present:
Our teams are adept at online teamwork with their clients. This includes communicating over Zoom and hosting virtual Sprints, daily Scrum meetings, and retrospectives.
Chances are, the longer the team provider has been in the business offering the remote type of setup (we’ve been in it for 12 years), the more assured companies are that their offshore staff will be an equally effective global extension of their workforce.
This is one of the greatest apprehensions that business owners have: outsourcing may hamper the quality of the output.
This fear of losing quality is particularly understandable in fixed-price engagement models where developers' mindset often is to tick the boxes on the feature list.
Time and material agreements, on the other hand, let clients fully manage their teams and everything else that is expected of them. So without the limitations of a fixed-cost contract, a team that is treated and managed as an extension of your own will present solutions and ideas just as in-house members would, making your operations just as seamless and efficient.
Of course, these expectations need to be set with the outsourcing provider during the planning stage, including the standard of work quality. Details like coding standards, if peer reviews need to be done, etc. also need to be laid out beforehand.
Having both parties as actively engaged as possible would be with your in-house team is the only way to see your outsourcing process succeed, even with well-oiled processes and a distributed team that already follows industry standards and best practices.
Quite the opposite! The offshore team extension model, in fact, helps businesses become more flexible and agile in fast-paced, rapid-changing environments.
With an outsourcing partner, clients get full transparency and control, and have direct access to team members and manage them as they do with their in-house team.
The only time we step into managing a team is when clients need us to. Other than that, our project coordinators help with assembling requirements, project planning, and tracking communications.
The mere mention of cost reduction as a benefit of outsourcing is definitely an ear-grabber for companies, but it is only one of many.
As Mark Nimco explained in the video, outsourcing gave them access to the talent (at lower cost) they could not find locally, some particularly on an on-demand basis like CTO consulting and UI/UX design.
Outsourcing also safeguards companies from the hassles of looking for, hiring, and retaining resources as this responsibility mainly falls on the shoulders of the outsourcing partner.
Short-term outsourcing is a riskier move as transferring business-related operations between teams can be complicated. Interruptions that affect daily activities, could cause more operational disruptions than needed.
Long-term agreements (or open-ended agreements as we call them) will allow the outsourcing partner to gain deeper insight into the business and act as a genuine partner and adviser.
In turn, a company gains flexibility, develops a solid edge over competitors, and paves the way for more innovative collaborations, just as explained by Mark Nimco in the video.
Did I miss anything on this list? I would like to know what you think, so feel free to share your thoughts.
Fred had been working on IT and operational projects in the finance and software industry in Switzerland for 10 years before co-founding Arcanys in 2010. With nearly 20 years of experience in the industry in Switzerland, Hong Kong, and the Philippines, Fred is now leading the worldwide sales and marketing efforts of Arcanys.