Outsourcing is an Outdated Term

Forget the cliched labels - ‘outsourcing’ is about building highly effective teams.

Accelerance, as a company, is strongly associated with software ‘outsourcing’ and in the world of search engine optimization. It's definitely a term that leads a lot of people to our door.

But in truth, I dislike the word. It’s one that carries 30 years of heavy baggage. It evokes layoffs, budget cuts, dysfunction, and mistrust, all the disadvantages of outsourcing. That’s why I don’t mention "outsourcing’" once I start a conversation with a prospective customer. Outsourcing has changed massively, particularly in the last decade. It shouldn’t be defined by a tainted term.

For over 25 years, I’ve been helping companies build globally distributed teams and strategic alliances. I’ve never written a line of code in my life, never shipped a new software application. But I’m a problem solver and I understand intimately what makes for effective software development teams, for the kind of outsourcing relationship that builds greater efficiency and productivity. That is ultimately what is at the heart of software outsourcing.  It is people working together in an environment of mutual understanding, trust, and respect. It doesn’t fundamentally matter where those people are located or whether they are given labels of employees, freelancers, or independent contractors. With the right approach, all those kinds of team members can work together, no matter where they're located.

John Lennon’s famous lyric plays on a loop in my mind:  "Imagine there's no countries; It isn't hard to do"

The defining trend in my lifetime has been globalization. We are more interconnected than ever. Technology has made borders and time zones mostly irrelevant. I can show you dozens of examples of companies that have built globally distributed software development teams and achieved incredible business success in the process.

Outsourcing Strategy: Trust is everything

But there are many more senior IT leaders who have become hung up on all the negative stuff outsourcing has come to represent. It’s too often used as an excuse for failure.

“That’s what happens when you shift development to the other side of the world,” they’ll say. “Outsourcing was never the right answer.”

That’s a complete fallacy. When you start from a position of low trust, you have a huge job to dig your way out. My philosophy on team building is heavily influenced by the three years I spent in the Peace Corps in the early 1990s as a microenterprise volunteer consultant in Costa Rica. I quickly learned that there are three key tenets to being a successful Peace Corps volunteer - you need to understand and appreciate the culture of your host country, appreciate and uphold the culture of the country you’ve come from, and be open to a truly collaborative approach to the duties you are there to perform.

Only then can you build the trust that allows a team to thrive. In the case of the Peace Corps, that could mean for example, teaching crop planting techniques to host country nationals or teaching kids STEM skills preparing them for a career that will lift them out of poverty.
 
When you put in the time to optimize a software development team’s dynamic, you can shed the baggage that drags down a collaboration or project spanning borders and time zones. Outsourcing is too often treated by CTOs as simply a quick way to ‘build capacity’. I get it, a lot of people are just leapfrogging to the next lily pad, trying to make it to the next quarter, with deadline pressure and looming launch dates. We are still in the midst of a severe tech talent shortage so recruiting skilled staff in-house is tough.

Reasons for Outsourcing: Evolve or Survive?

But do you want to stay in survival mode, or enter evolution mode? At Accelerance, we help you evolve your approach to building software. We teach customers to operate fundamentally differently when collaborating with international software development partners. It delivers results because the best software development service providers around the world who work beyond their own borders, have reinvented how they operate. They have embraced hyperspecialization, offering deep expertise in high-growth areas of emerging technologies. As small businesses in offshore outsourcing, they know how important it is for their own success to stay on top of what's new in outsourcing trends.

These best-of-class service providers have optimized how they collaborate with customers to share knowledge and operate as a team, breaking down the ‘us and them’ culture that defined outsourcing for too long. They have developed better, business processes, KPIs, and measures of success to reflect the common goals shared by the customer and development partner alike. 

Labor cost savings from outsourcing are obviously expected (however, not as much as before), but other quantifiable benefits of outsourcing increasingly overshadow it, like technical expertise, delivery quality, reliability and stability, speed to talent and speed of product to market, innovation, security, scalability, and post-deployment support.  

It is increasingly the norm for businesses with ongoing software development needs to maintain a network of tech partners spread around the world, scaling their input as required. That is, assuming they have evolved their approach to global partnering.

When we take customers to meet software partners around the world, we always arrange the trip so that they spend 50% of their time together on business, the other 50% just getting to know each other. They go sightseeing, share meals of the local cuisine, and talk about the history and culture of the place.

Types of Outsourcing and Examples of Outsourcing

The North American Free Trade Agreement made outsourcing manufacturing attractive to American companies, with the goal of boosting the economies of our near-shore neighbors as more Americans moved into the tech industry. The advantages and disadvantages of offshoring and near-sourcing became apparent quickly and expanded into other industries and certain tasks, starting with customer service, technical support, and eventually software development.

Today, we simply don't have enough highly skilled software developers available to meet the demand of U.S. companies. And they might be located in a geographically advantageous area. It can be hard for human resources to even find the right people and it takes a long time to get them onboarded and producing. That's why enterprises of every size have turned to outsourcing providers more and more to meet their business objectives. While we still offshore a lot of our manufacturing and customer service in the U.S., software development is becoming ever more common as a business model, especially when it comes to new areas like artificial intelligence.

Advantages of Outsourcing: It’s About People.

It adds a new dimension to the relationship. Life is about more than business practice and outcomes. There has to be a personal payoff in terms of experiencing the world, learning new things, and getting a different perspective. So if not outsourcing, what do we call it? There are lots of other terms thrown around - strategic partnering, resource augmentation, and talent acquisition. But when you accept that software development is really about people, and building an effective team, the labels fade away. It doesn’t matter what you call it. And it works when done the right way.

Three decades on from when software outsourcing really became a thing, the game has changed. We talk a lot more about outsourcing partners, and the benefits of outsourcing, emphasizing the strategic and truly human nature of the work being done. I like to think Accelerance has played a part in that change and, as Lennon put it:

• "Imagine all the people, Sharing all the world
• You may say I'm a dreamer, But I'm not the only one
• I hope someday you'll join us, And the world will live as one"

Get in touch with Accelerance to find out how we can help you build an effective software development team, drawing on the best skills and most competitive rates in the world.