When it comes to outsourced software development teams, getting your management approach right is vital. The right approach can help deliver key business benefits like accelerated development timelines, dramatically improved scalability, and lower costs (whether you’re employing staff augmentation or a fully-managed team). 

But without the right management approach, an outsourced team can create risks. Miscommunication can create delays. Crossed-wires on key project requirements can result in a final product that doesn’t deliver on its intended function. 

In this article, we focus on some practical tips for managing an outsourcing relationship that creates as much value as possible for your business. This guide offers a higher-level overview of managing outsourced development teams while providing links to some more detailed resources on related topics along the way. 

Here are the five tips; we break down each one in more detail below. 

5 Tips for Managing Outsourced Software Development Teams:

  1. Establish Clear Product Ownership
  2. Focus on Function and Avoid Micromanaging Developers
  3. Implement Consistent Communication Practices
  4. Deploy a Cross-Functional Team
  5. Ensure Teams Maintain Flexible, Agile-Friendly Project Documentation

Cruisebound Case Study

Software Outsourcing Tip #1: Establish Clear Product Ownership

The first step is clearly identifying a “Product Owner,” an internal leader with clear overall responsibility for the product(s) being developed by outsourced development teams.

For larger firms, this leader is likely to have “Product Owner” as a formal title. For smaller companies, this owner can be a CTO, a CIO, or even a technical co-founder.

The important thing is that they have the time and perspective to function as a liaison between business and technical personnel.  

The Product Owner needs to ensure that a clear definition of success is in place as you start the development cycle. As development moves along, the team should periodically check in with this definition, a key method for keeping the project aligned with its ultimate business goals. This definition should be as concrete as possible (e.g., “We want half of our internal user-base to be using this app every day within 2-weeks of launch.”) to encourage careful consideration of how to build a product and product strategy capable of making this vision a reality. 

Losing sight of success is just one ever-present—but avoidable—risk that comes with developing custom applications. 

You can read more about mitigating some of the most important risks to successful development in our article here. 

Software Outsourcing Tip #2: Focus on Function and Avoid Micromanaging Developers

Excessive micromanagement can prevent your development teams from doing their best possible work. 

This micromanagement often takes the form of overly prescriptive project specifications. However well-intentioned, they can limit the ability of professional software engineers to use their own judgment and creativity to come up with the best possible method for fulfilling product goals. 

We think development teams work best when they’re empowered to take an experimental, R&D-like approach to discovering the best path to accomplishing a software product’s end-goals. 

Product owners should focus on high-level planning and oversight. During daily stand up meetings and demos/sprint reviews, product owners can provide the most value by evaluating development progress from a functional, end-user perspective. They generally shouldn’t be focusing on specific coding decisions, but on the user stories, the key tasks users need to be able to accomplish. Regular reviews should incorporate a working prototype on a real device—even if it’s still a black-and-white wireframe—to help provide a tangible point of evaluation. 

The goal is to avoid overly specific specifications of the method and focus on the software’s ultimate function. This gives developers as much room as possible to be creative and implement an efficient solution. This approach will maximize your developers’ effectiveness—and preserve their sanity. 

The specifics of execution should be left to a “Process Owner,” whether that’s a Project Manager, Agile Coach, Scrum Master, or Solution Owner. While the Product Owner is typically an internal figure, the Process Owner is often part of an outsourced development team. 

The Process Owner needs to provide the best possible development environment to keep the team highly productive, efficient, and well-aligned with end goals. It’s their job to catch and eliminate waste, plan tasks, maintain best practices, and ensure any needed tools are in place. They need extensive knowledge of different development processes so they can pick the right one based on relevant organizational restrictions. 

Software Outsourcing Tip #3: Implement Consistent Communication Practices

They don’t need to be overly formal, but your team needs some well-defined procedures for communicating over the course of the project. The underlying purpose of this communication is to ensure that day-to-day development work stays as closely aligned to product goals as possible. 

Daily standups are a great practice, for instance, for keeping the team on the same page. Frequent check-ins, however brief, help avoid wasted effort and prevent any surprises for product owners: they’re getting an update every day. 

It’s also effective to institute retrospective meetings after each sprint, colloquially referred to as “sprint retros”: these retros are a great time to identify lingering issues, discuss potential product improvements, and consider any changes that can help the development process work better for the next sprint. 

Consistent communication is one of the most powerful ways to de-risk new product development.

We take a deeper look at communication mistakes and how they can harm the effectiveness of your outsourcing relationship here.

Software Outsourcing Tip #4: Deploy a Cross-Functional Team

Launching an effective software product today requires cross-functional expertise and a team consisting of people from different functional areas of the business, including UI designers, UX specialists, back- and front-end developers, QA engineers, and even Business Analysts and Marketing. Some companies have an ingrained cultural habit of creating “siloed” teams that occasionally interface with one another or “hand-off” the project wholesale between development phases. 

In our experience, it’s much more effective to organize a truly cross-functional team that can collaborate on the product on a daily basis. 

Key benefits of a cross-functional software development team include:  

  • Elimination of conflicting priorities and incentives: Instead of different teams pushing to get their deadlines met, team-members have a shared timetable and set of priorities.
  • Greatly improved communication: A close-working team is less prone to communication problems while all team members get  a more holistic view of the product they’re working to build. 
  • Faster product timelines: Cross-functional teams can avoid departmental bottlenecks and iterate new versions faster and more responsively. 
  • User-centric development: Daily input from UX, design, and graphics experts helps align development decisions with user end-goals

Software Outsourcing Tip #5: Ensure Teams Maintain Flexible, Agile-Friendly Project Documentation

There isn’t any single right way to do project documentation, but the right approach can help ensure success while avoiding unnecessary, time-consuming documentation work. 

Effective documentation helps keep your project on-time and on-budget while acting as a  resource for onboarding new developers and preserving knowledge about key development decisions for the future. 

Even in an Agile environment, documentation shouldn’t be ignored. It’s a vital step for maximizing your software’s value over the long-haul. And it’s an essential tool for keeping a tight focus on dynamic project requirements. 

For a much more detailed look at a practical, value-driven approach to Agile software project documentation, we recommend our article here.

Employing an Outsourcing Approach That Reflects Your Business Challenges

It’s easy to become overly focused on crafting the “perfect” process. Should it be Scrum? Should it be Kanban? Should it be Kanban for Scrum Teams? LeSS? Scrum of Scrums?

Meanwhile, trying to perfect process-planning development details can become just as overwhelming. 

How many people should be on a team? What if the team can’t be cross-functional due to organizational restrictions? What if we have several teams and several interdependent products? 

Ultimately, every outsourced team is different. That’s why there’s no “by the book” formula for every engagement.  The best approach is to adopt an experimental approach to learning what works best for your team: try the process that seems most appropriate to the context, and change as needed. 

Distillery supports clients with models ranging from targeted staff augmentation to fully managed outsourced project teams (you can read more about choosing the right outsourcing model for your business here). 

We find it’s most effective to move away from abstract processes and focus on assessing the goals and resources at-hand.

In many cases, we’re customizing our project management practices to reflect a unique mixed team of internal and external resources. 

Our ultimate goal is to create a team that operates like a natural extension of our client’s organization. 

If you’d like to chat with Distillery about how we can build a team that’s ready to get to work on your software project, you can get in touch with us here