In speaking with CEOs and heads of product or engineering for smaller high-growth companies, they often ask me about outsourcing. The question is usually whether or not their company should consider expanding beyond their in-house development talent to include outsourcing models. 

In my experience with high-growth companies, outsourcing has always been a question of when―not if. 

A leadership team’s ability to augment in-house engineering teams with contractors can have a direct impact not only on volume and quality of product output, but also on the effectiveness of available budget. For example: outsourcing with a trusted partner gives companies the ability to spin up and spin down resources responsively based on business demand. Outsourcing can also give the ability to easily expand geographic coverage for an international customer base, and distribute operations centers around the globe. These flexible augmentation capabilities are often accompanied with the promise of lower costs too, right?

Yes and no. 

There are direct costs and indirect costs that need to be considered. We all usually look at the direct costs, but some examples of indirect costs include overhead for managers to coordinate workloads and handoffs to the outsourced teams, as well as training and check-ins to ensure the level of quality is consistent and employees on both the outsourced and in-house side feel they’re being effective. Add in the distribution of teams across time zones, and that adds additional complexity when it comes to communication and project coordination.  

Remote-work has closed the gap between in-house and outsourced teams

During my time at Adobe, I saw and experienced their global infrastructure and managed teams of hundreds of engineers in distributed locations like Beijing, India, Romania, and more. Having done this for so many years, I’ve learned to prioritize our distributed teams, whether in-house or outsourced, as part of the larger, unified team. 

We put a lot of thought into the time of day we schedule all-hands meetings, leverage Zoom to bring people together, and try to consider the holistic experience for each member of the team. We celebrate when they are successful and share their frustrations, just as we would with in-house teams. 

Before the pandemic turned millions of people into remote workers, management of in-house teams and contractor teams sometimes felt different. But now with more people than ever working remotely, any location-driven distinctions between the two groups has all but disappeared. From my perspective, the key to success is knowing how to leverage both in-house and outsourced talent to enhance your entire organization. 

I have found a few capabilities to be critical differentiators in the levels of success with both groups.  

The first is how strong the organizational muscles are for a team to work well with groups who sit outside HQ. It takes a full team commitment to make it work. Every team member and leader will have to develop new skills for this new normal. Regardless of whether those groups are employees or contractors, there is a weight on communication when crossing time zones. Communication is crucial: the onus will be heavily on the product and engineering leaders in all locations to understand, interpret and navigate differences. We don’t have shortcuts to do this, we simply must be observant and ready to act quickly. 

Creating autonomous workloads with well-defined scopes are also a critical component in the success of your outsourcing efforts. Not all workloads are the same and identifying those that contain clear measurable deliverables will greatly improve the final outcome. Examples may include running your regression tests, executing standard operating procedures for systems monitoring, and producing bolt-on enhancements to your product offering. When your outsourced team has real ownership of a discipline, success rates will increase. 

Remote work makes teams more competitive

The second differentiator I’ve found is the level of trust and partnership with the outsourcing team: Creating a culture of inclusivity is a challenge when both corporate and geographic cultures may be different, but I urge all leaders to take the initiative, as that diversity is a strength when we are intentional about how to cultivate a vibrant, thriving environment.  

Utah has many fast-growing companies that provide essential products and services to a global market. Often these companies are continually bumping against their limits, requiring them to develop new skills that will let them provide a great customer experience around the clock. Leaders may feel challenged by the pandemic essentially forcing them to adopt the outsourcing model before they may feel ready, but it will benefit the company in the long term. 

Managers who are comfortable with remote work―whether that means people working from home or a team of engineers halfway around the world―will absolutely be more successful and in demand in coming years. 

The final differentiator I’ll share is one that has become more apparent than ever in our post-2020 world: an organization’s prioritization of agility. What we all experienced as the pandemic escalated was a rapid set of changing conditions that forced each of us as leaders to make responsive decisions, ideally informed by the right data at the right time.  

At Domo, we focus on not only getting access to the necessary data, but using that data to guide decision making. When it comes to outsourcing, the model we use includes consideration for agility and speed, ensuring we are building product knowledge with our outsourced teams, and automated processes.that provide data on throughput and quality.

I believe it’s a distinct advantage for companies to adapt to a world where distributed work―whether it is in-house or outsourced―is now the new reality. As leaders, we care deeply about the customer experience as well as the employee experience. Our ability to embrace new work models can positively transform both the customer and employee experience as we continue to adapt.