New communication model in software development outsourcing

At Wise, we believe effective communication is the key factor that influences the outcome of any project. Be it collaboration with a client, teamwork on the in-house startup, or the company’s employer brand initiatives. Yet, usually effective communication is hard to measure and even harder to establish.

In this post, we’re reflecting on how communication has transformed in the outsourcing sphere over the last few years. We’ve been developing our clients’ custom software and launching in-house products for over a decade now and observe some distinct transformations. Let’s discuss communication models in today’s software development outsourcing as well as reasons that forced the changes.

Client-manager communication model

Usually, when browsing for an article on communication challenges while outsourcing you’ll read about time differences, cultural peculiarities, and poor language knowledge. These factors are, undoubtedly, important, yet, if you collaborate with an experienced and professional outsourcing team, rarely impact the project outcome that much. What then makes some of the projects succeed and others strive for existence?

Over the last decade, the approaches to building and launching tech startups have evolved significantly. We no longer launch ideally implemented, bug-free products, plan all the functionality we’ll launch 3 years in advance. Instead, we test hypotheses right from the start, showcase clickable prototypes, get users’ feedback, and proceed with those products or features that get the highest evaluation.

At the same time, the communication approaches in custom software development companies often remained the same as if we were still working in the fixed-projects-only reality. Historically, the outsourcing partner was hired for a set scope of work that had to be delivered in a specific time frame. The managers on the client's side used to communicate with a project or account manager from the outsourcing company who kept them up-to-date on the progress. We call it the client-manager communication model.

Client-team approach to software outsourcing

With new approaches to product launch, flexibility became the key success factor for most startups. By flexibility, we mean the ability to pivot the project on the go, adjust functionality based on the client’s expectations and feedback. For this, the old approaches to communication between the client and outsourcing team simply don’t work.

That’s why it is vital for the startups who outsource MVP development to be able to communicate with each member of the remote team individually. Because when an unexpected problem arises, people who are the closest to it can get the best solutions faster. That is what the client-manger model lacks – the ability to talk to the right specialist, the minute you need it.

At Wise, we understood the problem of the communications via the manager long ago and rarely used it within our project. Today, what we advise our clients is to use client-team communication right from the start, no matter if it is a new product that we launch or scaling existing one with the new functionality. It does not mean the team operates without a project manager on our side (though sometimes it does), but that together with the PM the client can talk to the whole team or each specialist directly.

Two models compared

The infographic below illustrates how the business logic behind the startup development has changed. The key difference lies in the project planning and scope. You no longer need to know how to fully realize the functionality you have in mind, or have the comprehensive list of features you need to implement. Instead, you can communicate your business goals and key problems your product addresses, and together with your outsourcing partner decide on the best solutions to make those goals achievable. One condition only – to be able to create a product you’ve envisioned, engineers need to discuss it with you directly.

Self-organized teams in outsourcing

Another phenomenon that was aroused by the change of the business development approaches, is the new paradigm for the outsourcing team organization and the rise of self-organized teams in the sphere.

Usually, when this topic is discussed it is spoken of in the context of in-house teams. Though the covid pandemic has indisputably accelerated the remote-work trend and the way teams collaborate has been changed fundamentally. Self-organization became an even more critical aspect for all teams seeking efficiency. No matter if they work in-house or are part of the outsourcing project.

What is a self-organized team? It is a team whose members have the freedom to make decisions within their domain of expertise and not wait for their manager to assign tasks. A self-organized team has a clear vision or a product broader picture and does not expect detailed task descriptions in Jira. They communicate directly with the product creator and stakeholders and suggest solutions to the problem the management faces or users report.

Simply put, this is a team that has the competence to accomplish the work without depending on people outside the team. Let’s discuss why this type of teamwork is beneficial both for the engineers and the business owners.

From developers’ perspective

• In self-organized teams, people are mission-driven and understand the value of the product they build, as well as their own impact on its development. This also increases their level of involvement and promotes the ownership attitude.
• Engineers in self-organized teams tend to stay in the project longer as the process is dynamic and never becomes monotonous.
• When engineers take the responsibility for the decision they make, they are more eager to go the extra mile for their end-users. This helps them grow business thinking and changes the overall approach to product engineering.
• Because each team member is involved in communication, the chances of spotting any miscommunication at the early stages are much higher. And it is always better to correct the concept of the feature implementation than to change the logic behind it entirely after it is almost ready.

From the business owner’s perspective

• Working with a self-organized team you can finally minimize multi-tasking and micromanagement that eats up an enormous amount of time.
• With tech experts who handle the tech part, you can focus on the product strategy, hypothesis testing, and product growth that really deserve your rapt attention.
• To function effectively, self-organized teams should consist of experts in specific spheres. This also ensures all the tech-related decisions are made by people equipped with the best possible knowledge.
• With the clear communication loop established, all the people involved can take initiative and act faster. This helps to achieve frequent product delivery and fast product iterations.

Wise approach to communication

Clearly, not every outsourcing team is ready to work within the self-organization paradigm, and the formation of such a team does not happen overnight. At Wise, we’ve been launching products for our clients for more than 15 years and noticed that to be able to effectively self-organize, a team should be working together for a significant amount of time. In our case, 60% of our teams work together for 3+ years and that’s the minimum time that is required. We also have teams that work together 5+ and 10+ years, and their achievements in self-organization are much more impressive.

Our project managers shared these handy tips on how to collaborate effectively with a self-organized team:

• Minimize top-down management of tasks and activities. Instead, you can build your cooperation model on partnership and strategic collaboration. For this, find a team that would consider your success their own achievement.
• Do not confuse brief communication with clear communication. Sometimes meetings last longer than usual. Sometimes an extra meeting is needed. The same as you now stay flexible with the project scope, adjust the communication schedule on the go. Our engineers usually request additional meetings if there are important topics to discuss.
• Do systematic health checks to see if everyone from the team knows what to do and what is expected of them. We usually do it with the Roles & Responsibilities exercise when each team member writes down what he/she expects of the teammates and sees what is expected of him/her. The points that do not coincide gets discussed.
• Keep people in your outsourcing team informed. The more the experts you’ve hired are up-to-date with the overall project situation, the more context they receive, the better solutions you’ll get on the outcome.
• Clarity is the magic pill for effective communication. Before you start moving forward with your outsourcing team, specify how you see the product development in the long perspective, how you measure success, what traction you expect, and what hypotheses you are trying to test.

Key takeaways

Software development outsourcing is a strategic initiative that allows startup companies to launch their product MVPs to market faster and validate ideas that will receive further investments. To succeed with the project you outsource, look for a custom software development company that’s open for dialogue, and would care about your product mission.

At Wise, we bring together engineers with deep expertise in custom software development and work in self-organizing teams. We’d be happy to discuss your business ideas and see how we can bring them in front of your end-users as fast as possible.