If you’re a large company, managing outsourced product development is a relatively straightforward activity where you’ll have many engineers, processes in place, and experience to guide you.
For a small company that has never outsourced product development, it’s not so simple. How do you know you have picked a good company? How much should you pay? How do you tell if they are doing a good job when you barely understand what they are doing? How do you know they understand you, your company and your requirements? It can be overwhelming.
Fortunately, there is an effective strategy for this situation: hire one Product Development Company (PDC) to do the work and another PDC to oversee the first.
Here are some tips related to this strategy:
Make it clear to the overseeing PDC that they will only oversee; otherwise, they will throw the PDC doing the work under the bus in order to get the work for themselves.When interviewing PDCs, ask if they would accept such an arrangement. Any company unwilling to do so should be treated as suspect.Overseeing is not the same as managing. The overseeing PDC is there to help you understand what is going on and make suggestions, not manage the day-to-day activities of the working PDC’s employees. Don’t buy into the argument that it will just add cost to the project. Call me, and I will give you several examples of how this saves a lot of money and time.The overseeing PDC’s employee[NBS1] doing the work should be a partner in the firm—don’t allow this type of activity to be delegated. Create a culture of collaboration. Clear and open communication can only occur if everyone knows that mistakes are great learning opportunities for everyone, not something to be swept under the rug. Deliberately send this message to the team, and walk the walk.
Small companies are almost always better served by outsourcing non-core activities. However, outsourcing is a skill like any other and it takes effort to become good at it. Having a coach is a great way to perfect a skill.