Outsourcing part of software engineering is not for everyone. Outsourcing requires a lot of micromanagement and software engineering background to make sure that what you ask for is what you get.

What follows is my own experience over the last 10 years in many outsourcing contracts working across India, China and Eastern Europe outsources both independent and agencies.

Are you sure it’s for you?

Never “palm off” the job in the form of outsourcing. Otherwise you will be heading down a spiral. Because the important piece of outsourcing is both micromanaging and understanding what the fuck is getting delivered. This way you can either pull the plug on crappy code or influence the right sort of implementation.

If you outsource too early or the core IP you lose the power to radically change the design of your product. Early design is constantly changing especially if you are building something which has never been done before. You want the flexibility to change fast. You need to be under control and know what is going on with all the moving pieces. Read more on this how bad outsourcing impacted Boeing’s Dreamliners (787’s).

This leads me to some key points on what skills you should have if you are going to outsource. Mind you I said “you” because it cannot be someone else you palm it off to.

1. Have a strong background in software engineering.

Loose coupling, Less code, Don’t repeat yourself (DRY), explicit is better than implicit, Test-driven development (TDD), Distributed Version Control System (DVCS), and what .Net develops is all important. Did you understand any of those? If not then you are going to get a piece of crap code. Why is code important? Because it determines the type of engineering culture you build out internally & future maintenance (this is where the hard costs nail you down) and local hiring – quiet frankly great engineers do not like working in a pile of mess.

If you do not know how to code move on or go and learn to code. Anyone with the right attitude and time today can learn to code. See http://www.codecademy.com/, http://www.udacity.com/, https://developers.google.com/university/, etc… plenty of resources online for free. No excuses.

If the outsources delivers crap code you tell them to fix it. If they continue to deliver crap code. You break the contract and provide constructive feedback to them.

Detail detail detail. “The devil is in the detail.” my previous biz partner stressed this to a point where it is now embedded into my psyche and into how I work.

If you are outsourcing make sure that you or the person working 1:1 with the outsourcer are very detail orientated. This way errors are caught fast and stopped at the front line, and where appropriate move fast and fire the outsourcer.

2. People skills

If you have a background working with people (we all do right) and managing those people (oh here we go) then this part will also get smoother. You need to understand you are working with people who have their own lives, family, goals and ambitions etc… so don’t be an ass because you outsourced a piece of work to a “cheaper” labor country.

If it helps, review (even if you have already read it) How to Win Friends and Influence People by Dale Carnegie. The 3 basic principles:

• Don’t criticize, condemn, or complain.
• Give honest and sincere appreciation.
• Arouse in the other person an eager want.

Look, you are going to have to micromanage them. Yes micromanagement ain’t ideal for your immediate employees but for contractors it is a must. They are paid to do a certain job and usually move on. You need to receive quality (refer to point 1 on engineering) and also make sure commitments are completed on time and within budget. Hence the micromanagement.

I also like to emphasize to build a good relationship so you can work with them again. Obviously pending the results of your encounter. Results is all that matter at the end of the day. But, never lose sight of maintaining that level of expected quality. If it drops, give them a chance to correct it by providing constructive feedback. If nothing changes again, then cut the tie immediately.

Remember: “Once shame on you, twice shame on me” (in 1st person)

Right so you have the necessary skills to get moving. Here is where the harder stuff begins.

The checklist!

1. Automate.

As much as you can. Outsourcing isn’t just relationship management. There are a number of balls in the air from managing the relationship to code review & feedback to product questions that need to be answered and/or fleshed out.

Use DVCS (ref my previous blog post) with email alerts enabled for code checkins, comments and issue tracking. Have everyone involved with the job on email alerts so you know when code is checked in or issues logged. I like using Bitbucket for all of this.

I also recommend you put them on HipChat for Private group chat and IM, business and team collaboration. This way you will maintain all communication in the one place.

2. The standards list.

Send the contractor your “standards list” of what you expect out of the engagement. Use Google Apps to write one up & share it if you do not have now. Put a line in the sand. A bar in front on:

• Expected quality – DRY baby!,
• Naming conventions,
• Daily status updates – email or via HipChat,
• Use of standard industry engineer practices like TDD else you will get code without unit tests!!
• How everyone can reach each other for questions on product spec or similar ie. Skype, emails, cell #, HipChat etc. Include timezones everyone is working on.

3. Requirements.

Fuck sake man. More detail. Stipulate any API calls, use cases, designs, standards as mentioned above etc.. If you have an engineering background you will appreciate and say “fuck yeah” to what I just said.

No one likes to document things but this small initial investment will weigh in its worth when the final product is delivered to spec. Do not leave anything for misinterpretation.

• Have a Balsamiq design illustrating all the screens you expect and how they should look.
• Where applicable provide designs for every screen. Do not let the contractor try to work out for themselves what you want. Never ends well and you get billed for that time.
• Technical detail around API calls (request & response) with examples, use cases, high levee flow diagram etc..

4. Understand it before you open your mouth.

If you are developing for a channel you have no experience in, ie. Android. Then spend time learning it from at least a “high level” understanding so you can speak the lingo and know when you are getting lied to in the face. If you level out with the lingo then you will get respected more and the contractor will not be able to pull a “shifty” on you.

5. Hiring.

Never straight forward and always requires a ton of work. But this pays off when you have the right contractor on board working with you.

• Spend time writing up a detailed job spec and list it on oDesk/eLance and wait for the flood of offers. Immediately decline those that have not met all 5 stars criteria.
• Setup a spreadsheet of all those that applied to keep track of who you short list, their contact details, your last communication with them etc… From the 100 narrow it down to top 20.
• Interview the top 20 via Skype video (yes you need to see them) and listen for something that will differentiate one from the rest. For me it was getting asked questions I did not have an immediate answer to. Smart switched on engineers are like that and you know you got a winner there.

Remember that at every point in the interview/communication you need to be prepared with a series of questions so you can use those as a base for quality and comparison.

Tip: And when you do engage the outsourcer make sure you stay working via oDesk or similar tool. As much as you may be conned into believing working outside oDesk is worth 10% discount it isn’t  oDesk provides great tools to track your contractors time (with videos) and in the end you get to provide feedback on them. Bad business means bad comments means no future business. So it is in everyone’s favor to be on best terms and get the job done right.

6. Have fun!

Not a long-term strategy

Outsourcing is great when you first kick off a startup and need to fill in skill or time restraint gaps like kicking off a new channel which will interface with your in-house platform (your IP – which you built and are evolving) or design work. But that is where it stops.

Remember that outsourcing is work for hire. Your own company / startup is a labor of love which only you and those that live and breathe it each day share in the office. So if you have high expectations of the outsourcer to care and be on the ball with something they are building or have built then you most likely skipped the crucial part. The part where I told you to own the whole process and be laser focused on the work getting outsourced. You fucked up. You’re at fault not them.

Never outsource your core business. Only channels. Those that are not what I call IP (intellectual property). Your IP always stays in-house managed by you and your cofounder.. and ultimately a kickass in-house team. For example; a business that’s attractive to investors typically has some sort of IP that’s hard to clone by competitors. That thing that makes it unique. It could be a unique algorithm or even data. You’d never outsource that. Stuff that can be outsourced might be a channel eg. a mobile app as long as the IP (say that algorithm) is in the API your local team manages. For a smoother system consider using SD-WAN software as it gives you a better application system and more efficient business operations.

Final note

You are not looking for a “sweat shop”. Find rock stars! That have a history of delivering quality code on time while communicating effectively. Communication decides if you get an apple or an orange when all you wanted is an apple.

If you have any stories (good or bad) please share with me them below in the comments.

Happy outsourcing!
~ Ernest