The Software Outsourcing Show, Episode 3: The Software Outsourcing Lifecycle... What is it?

The Software Outsourcing Show is your #1 source for information, lessons learned, and exclusive insights into outsourcing. The show is produced by Accelerance, the leading consulting firm dedicated to helping companies reduce risk with software outsourcing.

The Software Outsourcing Show is on a mission to explain best practices for strategies, partner selection and ongoing management of outsourcing your software outsourcing development.

Episode 3 is when our hosts, Jim Marascio, Chief Delivery Officer of Accelerance and Bobby Dewrell, Vice President of Delivery with Accelerance, really delve into what Accelerance deems the ‘software outsourcing lifecycle.’   This lifecycle covers effective outsourcing from beginning to end-- it's all about planning, partner selection, launching, getting off on the right foot, and then continuous management. All of these combined create the high-performance outsourcing engagements we all strive for.

Transcript:

Bobby: Welcome to The Software Outsourcing Show. Brought to you by Accelerance, the global software outsourcing authority. Hello everyone, and welcome to the show. I'm your host, Bobby Dewrell. And joining me again in the studio is Jim Marascio. Jim, how are you doing?

Jim: I am fabulous. Hope you are too.

Bobby: Yeah, I've been doing pretty well. Been a couple of busy weeks out there, but it keeps it fun, right?

Jim: Absolutely, absolutely. Looking forward to episode three.

Bobby: Yeah, yeah. You know, moving on down the road, we've had a couple of episodes under our belt now and really, I thought what we would talk about today is really dive into a little more of software outsourcing and really, you know, what a life cycle to that is. You know, one of the things we've talked about before is really the approach to software outsourcing. And it seems like a lot of people kind of have a standard approach and they probably don't get the best performance that they expect. Would you agree?

Jim: Absolutely, absolutely. I think like many things in life, people just underestimate what they're getting into and it's sort of a half-baked solution sometimes and as a result, they stumble.

Bobby: Well, and, you know, it's one of those things that it is kind of a half-baked solution, but, I mean, let's kind of break it down. Let's talk about how does a typical person approach software outsourcing? What do we most often see when we get involved?

Jim: Well, more often than not, it's one of two things that happens. Either somebody knows somebody and they had a good experience or an okay experience, and as a result, they get introduced to their friend's partner where they might be. And, that's obviously a common one. The other one we see is RFPs and a lot of times with RFPs, it's three, five, seven partners that somebody found online through internet search. They weren't really…you know, they might have just searched for software development outsourcing or maybe they limited it to a couple of countries or something like that. And they came up with a short list and they put together an RFP and in a way, it goes that way. So in both of those cases, the challenge is really around being a very narrow scope of what they're looking into as well as depth when they actually dive in.

Bobby: Right. And so that's…really, it's in how they pick the partner, right? And the one thing that they're looking at when they go to outsourcing is they're only thinking about choosing a partner. Finding a partner, finding someone to help them, correct?

Jim: Absolutely. So there's generally very little preparation or readiness before things go in and then they look for a partner and generally assume that they're just handing off something that becomes very transactional. And again, narrow in scope when they're looking at what they're trying to do and they don't think about the process holistically.

Bobby: So it's kind of the 1998 way of doing it, right?

Jim: Yeah. Well, and if you think about anything in life. If you're building a house, you're having your kitchen remodeled or something like that, you're probably going to underestimate the scope of what needs to be done. You might ask one of your neighbors, how did you do this? They say, "Oh, I've got this contractor," and you call a contractor and, you know, away you go. And it's a similar model that we encounter here and sometimes, it works okay, other times, we find out the horror stories later.

Bobby: Yeah. There's nothing like asking a guy that built a really good deck or does a great fence to do your finished carpentry work, right?

Jim: Exactly.

Bobby: It's just not gonna happen. So really what…you know, when we see people who take this approach and things like that, what would you gather the performance ranking is? I mean, what do you think the success rate is there? You think it's a...

Jim: I think it's low. It's on the 30% or less. You know, we like to talk about high performance and low-performance outsourcing and what we've been talking about for the last few minutes is low performance. And a lot of that's based around, you know, again, not being ready, not looking at the full scope, and as a result, there's a lot of variables that you don't factor for. And so you react and respond to those factors when they happen, and because you weren't ready, the likelihood of not succeeding is much higher.

Bobby: Right. So we could say that improving your performance and outsourcing, right? Moving from what we were just talking about, that low performance. So, you know, it's transactional in nature. We found somebody however we found them, you know, we try to ask them a couple of questions. We think, "Oh, well, they did a really good job for this person. Or they say they can do this really well and they've got a great rate and they've promised that they can get it done in six months and I need it done in six months." You know, you look at those things, that's really kind of what leads to what we were saying, that low performance. I mean, yeah, it might work, it could work, it does work from time to time, but it's not a guarantee, right? And so looking at it that way and thinking about that, how do we move from that low performance to that high performance, right? That's what we at Accelerance try to preach, right? That's what we try to help move people to, is moving from low performance to high performance and I think it's mostly around planning, correct?

Jim: Exactly. So we have something we call the software outsourcing life cycle and we're gonna talk for the next few minutes about that. And for those of you listening, if you go to the show notes, we'll talk about that later. There'll be a download, a PDF that will help explain this as well, but it starts with planning. So we look at the full life cycle of the outsourcing project. Before you even go into partner selection, it's important that you plan, you start looking at, is your business ready to do this? What does it take to do those things? And we have something that we talked about, our 15 risk areas, and we break these up into business management technology and really start having companies reflect upon their organizational preparedness and readiness to actually do an outsource engagement and help them try to find areas where they may stumble and then remediate that.

Bobby: Yeah. So let's back up a little bit and let's talk about when we talk about this new software outsourcing life cycle, it's really across four major phases, right? And that first phase is planning and you go from planning to partner selection and partner selection is really where most people really start, right? They kind of miss that first phase.

Jim: It's where they spend almost all their time.

Bobby: Correct. So we have planning, we have partner selection, then we go into our launch activities, getting everyone aligned, and embarking on the journey. And then it's the management, right? The overall management of it for the entire life cycle of the engagement and what you're working with.

Jim: Exactly. Like anything else in life, it requires some care and feeding on an ongoing basis.

Bobby: Right? Exactly. So, you know, really, let's spend a little time and talk about that planning phase, right? It's because everybody really hits and gets ready to go out to this. Just they're eager, right? They're ready to get there, they want to run, they're trying to hit the ground running and then all of a sudden, you know, just from the start, we kind of start seeing things deteriorate, right? People, there's miscommunication, there's misunderstanding of terms. There's the benefits that really were expected just aren't there, right? And then the next thing you know, the vendor says that the client stinks. The client says that the vendor stinks, right? I mean, how often have we seen that?

Jim: Well, proper planning prevents poor performance. I've heard that my entire career and it applies here as well. So again, very often, if you jump into partner selection and the emphasis of everything that you're doing is on partner selection and you miss that alliteration of proper planning prevents poor performance, then you're much less likely to succeed. So we encounter that a lot. When we look at our sales process, we basically run into two types of clients and either ones that have done this or ones that haven't before. And when I say done this, I mean outsourcing. And a lot of times we run into skepticism within organizations because someone had a bad experience. Very often or almost all the time, it's a factor of not looking at this holistically and considering the entire life cycle.

Bobby: Right? And when we say holistically and we talk about, because we do look a lot of times at, you know…I mean, I know we've identified 15 different risk areas, but that's not just technology, right? It's across the business as far as expectations, across the management, processes. How do you run, how do you operate? And then the technology itself, right? And do we have competent technical people? So it's really a holistic approach when we talk about planning, correct?

Jim: Yeah. And a lot of it's within the client's organization. So before you outsource, you need to make sure that your organization is ready for it. You need to identify…we'll talk, we'll dive a lot deeper into this in future episodes, but identifying where the gaps are within all those three areas you just talked about: business, management, and technology.

Bobby: Yep. Absolutely. And, you know, so let's talk about that. So now we've kind of planned so we know what our expectations are, we know, you know, what some gaps are that maybe we have within our organization as we're getting ready to do this, and then, you know, once we kind of have that baseline of where we are and know what we're looking for to fill the gaps that maybe we don't have, then that's when we start getting into partner selection, right?

Jim: Yeah, absolutely. And the reason it's so critical to do planning first is so that you can select the right partner. All too often, companies select a partner based on predominantly three things. Number one is, do they have experience with the technologies from a software development technology standpoint that the product needs to be developed in? Number two is, do they have industry experience with the industry that the client is coming from? And then number three is, a lot of times, companies start looking at where in the world are they, time zone overlap or proximity, you know? People have different preferences to where they like to be and why. We can talk about that later too. But if you're only looking at those and you're not doing that planning in advance and you're not identifying other gaps in your organizational readiness to have a successful outsourcing engagement, then you're not going to consider other factors within partner selection that will help you fill those gaps.

Bobby: Correct. Right. And that's what it is. It's looking at those gaps there. And what we find is, you know, tech leader sometimes aren't really that experienced in finding a global team, right? Because it's all about the due diligence during this process and it's asking some of the right questions, right? And I mean, what are those right questions?

Jim: Again, coming back to where are those gaps, it's filling the areas that come up in planning, but it's also identifying, is the partner ready to do what they do? What's their retention rate? How do they hire? What are their hiring practices? What are their training practices? What's the environment that they're working in? You're outsourcing, you're not working in your office. So, what are those environments like? How do they collaborate? Because you're gonna be working with them on a regular basis.

Bobby: What methodology are they used to, right? Are they used to Agile, Scrum and Kanban within Agile? Are they used to a waterfall approach?

Jim: And how do they implement it?

Bobby: And what's their maturity compared to yours? Or maybe they're not as mature as your company is or maybe they are too mature. And we've seen cases where the vendor is significantly more mature than the client and they end up kind of dragging the client along, right?

Jim: Yeah, exactly. Exactly. And we went into other scenarios where a client needs a partner who can provide services outside of just the software development piece. So obviously, we're talking about software development, but there's a lot of ancillary components. There's testing, there's software architecture, there's systems architecture, there's deployment, and there's design, UX, UI, and so you need to make sure that those are factored in the process as well.

Bobby: And I know, you know, as we've reviewed the 8,000 or so companies, I think it's up to you now that we've looked out there. I think we've come across, what's our count now on the different metrics or performance indicators that we look at when ranking? I think criteria points, are those...?

Jim: We score partners on around 200 different areas, specific metrics that we're looking at. And then we essentially do the same thing in the sales process with our clients. So anybody who's doing software development outsourcing needs to reflect internally and say, what do we need? How do we fill these gaps again? And then as you're assessing partners, make sure that they're going to be complementary in the areas you need them to be complementary and that they're going to fill those gaps that you just have voids in.

Bobby: Well, absolutely. And I think something that people…I mean, we hit on just real quickly, but I mean, let's talk about employee retention. I don't know who out there would think to ask that, but I know a lot of times, you know, we've seen with some of these that have failed before we were involved. You know, they have these absolute rock stars that show up for the first two months and then as soon as that two months is over, those people, they're showing off as rock stars somewhere else and they're backfilling with more junior people, right? So these are some of the things that you want to look at and you want to make sure of the people that you're getting sold, the team members that you see are the team members you're gonna have for the duration.

Jim: Exactly. Look at it, if you were doing it in-house, what would your expectations be there?

Bobby: Right. So we talked a little bit about the planning, about the partner selection, and now, you know, really, we kind of get into what I think is almost that most critical phase and it's that launch, right? It's that alignment in bark. It's the first three months, and really, it breaks down to even some of the first few days of getting this relationship started.

Jim: Sure. So just like we said earlier, that many businesses fail to plan for outsourcing engagements, what we also find is many businesses think that once the partner is selected, it's hand over some requirements and very frequently, they're fairly incomplete requirements and those get handed over and then they expect it to be essentially the partner's problem.

And if you're not careful and you don't consider the fact that you're going to be working with the software development partner on a regular basis, probably every day for some of your people and at least weekly for other people within the organization, then you're not going to be ready to do that. So as you kick off a new engagement, it's really important to determine, how are we going to work together? How do we communicate? How often do we communicate? What do we communicate when we do? What are the roles and responsibilities of each organization? What you mentioned earlier, talking about assessing partners and looking at software development, life cycles, and methodologies. A lot of people can say agile. Well, what does agile mean and how do you do agile? So you need to nail down a lot of kind of working terms.

Bobby: Well, yeah, it's definitely, it's that working glossary, right? Is that definition of terms. I mean, how many times have we seen it that somebody says…you know, the client says, "Well, it's not done?" And the vendor is saying, "Well, it is done," and the problem is they don't have a definition of done.

Jim: Exactly. Exactly. So, you know, defining done. What is definition of done is important. Defining milestones. Generally speaking, clients do a really good job saying here's what the end result is, but they don't break it down into reasonable chunks and say, "Here are the milestones along the way," so that they can work together toward those and they can hold the partners accountable and the partner can hold them accountable.

Bobby: Well, and it's also the alignment and the agreement on how are we going to communicate? What are some of our standard meeting cadences? What's the ticketing system and how are we gonna use it? And how do we flow things back and forth between the two organizations? This is really that opportunity to become one team that we talk about all the time, right?

Jim: Yeah. There's a lot of places where things fall apart and this is absolutely one of them. If you choose the best partner in the world, but you don't agree on how you're going to work together and how you're gonna communicate what those goals are, then you do create, or you have a probability of creating a somewhat adversarial relationship view. What happens is rather than create the one team that you just talked about, it becomes a client-vendor relationship and that's never a good thing. You want to be operating…we use the term partner all the time, and you want to be operating as partners so that the handoffs are clear, you're working together as one team. You may happen to be across town or across the country or across the world, wherever it might be, but it's critical to define the expectations and agree upon the implementation of that working relationship so that you are operating as one team.

Bobby: Correct. And I think if I were to put a bow on this one, I would say that, you know, those good habits formed at the very beginning of the engagement are what really puts you on track, to that high-performance outsourcing, that one team.

Jim: You would say that.

Bobby: Yes, I would.

Jim: Absolutely, I agree 100%.

Bobby: Yeah, so moving on to that. So we've talked about, okay, now we've planned it, we've found the right partner, we've gone through our launch, we've got alignment and everything and I think now it's kind of that fourth critical and I feel like I keep saying everything's critical, but it's that fourth critical moment and it's that ongoing management, right? It's the way you sort of…I mean, I think, you know, to use one of our terms, we optimize it, right? It's that constant view and watch of consistent attention, assessment and that, you know, to use Stephen Covey, that re-sharpening of the saw over and over again.

Jim: Yeah, absolutely. So again, you can be ready to do the project, you can get the right partner to do the project, you can kick off things, but if you don't monitor it on a regular basis, then you start to drift. And, you know, that's why sailors have always used compasses. That's why…or sail by the stars. That's why we use ways today, and it factors in the things that change. So there was an accident ahead, there's police, there's construction happening, and if you don't take the time to continually monitor, assess, and adapt, and again, with a mind on what those long-term goals are and what the short and midterm goals are, you can very quickly turn around and realize that you're off track and you were heading from the east coast to the west coast, but right now, you're heading towards Seattle and you really need to be in San Diego.

Bobby: Yeah, absolutely. You've got to manage expectations from both ends, you've got to ensure that milestones are hit, and then you got to make sure that software is stable and scalable, right? I mean, it's simply those three things and you've got to stay on top of that at each path, each point of the journey, I guess I should say.

Jim: Exactly. And for each one of those, you need to make sure that you have a process and people dedicated to making sure those things stay on track. If you do, then your probability of success will be astronomically high. If you ignore any or one of those, you will see the exact opposite probability. Can you show up on the other end unscathed? Yeah, it's possible. But, the odds aren't real good. So like a lot of things in life, you want to play probability on things.

Bobby: Yeah, absolutely. So, you know, and wrap up, it's all about planning partner selection, launching, getting off on the right foot, and then that continuous management is what really generates that high-performance outsourcing, that one team, the most successful engagements that we've seen, right?

Jim: Exactly, exactly it.

Bobby: So, hey, listen, that's about all the time that we have for today. We thank you for joining and listening in. You can always find the latest podcast episodes and show notes on iTunes and SoundCloud or at softwareoutsourcingshow.com. That's also where you can find today's show notes, a couple of downloads for you, and some of the things that we've discussed. Software outsourcing life cycle and maybe even the 15 risk factors. So we appreciate you joining, listening in. Tell a friend and come back. We'll see you next week. Jim, thanks for joining me.

Jim: You're welcome. Thanks for having me.

Bobby: Have a good week.

Bobby: Thank you for listening to "The Software Outsourcing Show" brought to you by Accelerance, the global software outsourcing authority. Do you have a topic you'd like covered in a future show? Then send us an email at podcast@softwareoutsourcingshow.com, podcast@softwareoutsourcingshow.com. Show notes, links, and materials discussed on today's show may be found on our website at softwareoutsourcingshow.com. That's softwareoutsourcingshow.com.