Outsourcing Development and Engineering in Tight Markets

It is the perfect storm. High quality, experienced talent is difficult to find. Prices across industries are ticking higher. Pressures to deliver on-time and on-budget innovative capabilities to your customers and internal stakeholders continue to pile up.

The result according to the CIO.com article, “5 Tips For Surviving Outsourcing Inflation”, is “While outsourcing partnerships have become more strategic, getting costs down remains a significant draw of the sourcing model. But outsourcing costs have been driving higher for months.”

However, the potential for these partnerships to help you weather these challenges exists if you rethink the foundational purpose of outsourcing.

3 Critical Conversations to Have with Your Outsourcing Partner​
  1. Align with your outsourcing partner on business value

    Most outsourcing partnerships unfold based on technical and timing needs. You turn to an outsourced partner as an extension of your team, or for a startup to deliver an MVP in lieu of an in-house team. The measure of success in these partnerships is delivery at budgeted cost.

    However, being open about the business objectives you are trying to achieve allows your development partner to take these considerations into the architectural and development process. For example, if a business initiative is to contain costs while at the same time accelerating development, your outsourced partner can look for automation opportunities that may eliminate time and resource needs that typically drive up costs. Similarly, if future scalability is a business priority, your outsourced partner can use their expertise to recommend engineering and architecture decisions that best position you for future growth potentially helping you avoid costs of undoing or redoing development work only to meet immediate needs.

    These conversations that extend beyond project needs and delivery are extremely important when a market is tight because they position engineering and product development as a strategic business partner.

  2. Explore hybrid on-shore/near-shore/off-shore delivery methods

    When building outsourcing development partnerships, most organizations take a one-size-fits-all approach. However, your outsourcing partner may have a variety of team structure options to help you achieve your development goals while controlling costs.

    That said, the primary concern when companies start thinking about nearshore and offshore development is consistent quality. This should never be assumed, and the burden of responsibility to explain the strategic logic of how hybrid work falls on the development partner to communicate in a way that is acceptable to you.

  3. Think long-term value vs short-term projects

    One of the greatest budget sink holes is change. When you change engineering and development talent, even if it is due to an expansion, you absorb the cost of onboarding and time to get up to speed.

    Identifying an outsourcing partner that you can trust offsets the onboarding costs of bringing on a new hire by truly extending your capabilities instead of expanding your team. Doing so, you get the same (or better) boost in resource performance from a developer or engineer that is already up to speed.

    Unfortunately, some organizations have a start and stop relationship with their outsourcing partner from project to project. This disrupts the continuity of understanding and can stretch project delivery timelines.
Pulling Back Vs Reinvesting

With the rise of the hybrid IT team, we are seeing companies using software engineering and development partners as an EXTENSION OF their current team’s capabilities and experience without incurring the financial and professional commitment of a new full-time team member. In other words, you get the development talent you would like to hire without the salary, benefits, infrastructure and on boarding process to it takes to recruit and retain top-tier talent.

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