Software outsourcing is a way to address the developer talent shortage and a shortcut to building a development team. This talk tells the story of managing a year-long personal journey to develop a two-sided online business platform, using an outsourced software design and development team. As a software expert who knows a lot about outsourcing (he's written two books on the topic and has for years guided companies in avoiding pitfalls), Steve Mezak nonetheless encountered numerous missteps and mistakes on his own outsourcing journey. In fact, he selected the “wrong” company…twice. Learn why, how he handled it and the inevitable “course corrections” along the way – to fix a bad user interface and major security flaws and to adopt a DevOps approach. Discover how to select and manage an outsourced development team, including which parts are easier and which are more difficult than managing your own internal team. Walk away with the knowledge of what to look for and what to avoid when managing your outsourced software development.

1. Outsource Well or Else!
Avoiding Missteps & Mistakes in Software
Outsourcing
presented by Steve Mezak
steve@accelerance.com

2. Traveled outside of North America?
ICE BREAKER
How many of you have a passport?
131.8M valid passports in circulation in 2016
40.6% of 324.7M total population

3. SURVEY...
How many have outsourced software development?
➔ Happy, sad or just okay with the results?
Outsourced to freelancers? To a team (how big)?
How did you find your software outsourcing company?

4. HOW I GOT HERE
Outsourcing to Oregon in 1992
Hired developers during the dot-com era
Started Accelerance in 2001
New “platform-based” model in 2017

5. WHAT YOU’LL LEARN...
➔ How to design & develop a significant web app from scratch
➔ How to use outsourcing to do it
➔ What mistakes can you make avoid along the way

6. CHALLENGE #1
Expanding your team - your ability to recruit developers depends on...
➔ Pipeline of candidates
➔ Interview process
➔ Attractive environment

7. YOUR INTERVIEW PROCESS
What are the important steps in your interviewing process?
1. ___________________________
2. ___________________________
3. ___________________________

8. WHAT TO LOOK FOR?
➔ Tech knowledge
➔ Personality - IQ and EQ
➔ Company cultural fit

9. WHAT MAKES YOUR ENVIRONMENT ATTRACTIVE?
➔ Location (commute distance)
➔ Work from home
➔ Office design & feel
➔ Other smart people
➔ Training
➔ Interesting work - cutting edge,
making a difference, etc.

10. YOUR COMPANY CULTURE
What are the elements of your company culture
important for hiring developers?
1. ___________________________
2. ___________________________
3. ___________________________

11. ESTABLISHING A GOOD PROGRAMMING CULTURE*
● Mutual respect
● Fairness
● Professionalism
● Learning
● Passion
● Innovation
● Standards
● Teamwork & Collaboration
● Delivery - definition of done
● Communication
● Empowerment
● Selectivity of fellow team members
● Excellence
● Focus
● Environment & Tools
● Customer focus
*Chapter 8 of Managing the Unmanageable by Lichty & Mantle

12. ACCELERANCE’S BUSINESS CHALLENGE
Build an online directory for buyers and sellers of software outsourcing
But don’t cannibalize existing business
No development or design team
Limited budget

13. Enter the Client’s Criteria
DELIVERING A SERVICE WITH A SPREADSHEET

14. Repository for partner info
Rankings for expertise
Sorted scorecard
INSTANT SHORT LIST

15. Repository for partner info
Rankings for expertise
Sorted scorecard
INSTANT SHORT LIST
The 1990s called and they want
their spreadsheet back!

16. Overview & background info
Report of our assessment trip
Contacts and links
PARTNER PAGES

17. CHALLENGE #2
What if you have no development team?
Where to start?
1. ___________________________
2. ___________________________
3. ___________________________

18. THE CLOSING WINDOW OF OPPORTUNITY
How long does it take to build a team?
● __________ months

19. REQUIREMENTS
How do you define what your software will do?
1. ___________________________
2. ___________________________
3. ___________________________

20. TYPICAL ARTIFACTS
MRD / PRD
Vision or mission of the product
User Roles & Stories
Product roadmap
Product messaging & positioning
Wireframes

21. TYPICAL ARTIFACTS WHAT I CREATED
MRD / PRD
Vision or mission of the product
User Roles & Stories
Product roadmap
Product messaging & positioning
Wireframes
14-page Overview in a Google doc
➔ Goals, features & benefits, competitors
68 User stories for 3 user roles in a Google sheet
Our Excel spreadsheet
What’s missing before development can start?

22. UX DESIGN
Who does your UX and visual design?
1. ___________________________
2. ___________________________
3. ___________________________

23. UX DESIGN WHAT I DID...
Who does your UX and visual design?
1. ___________________________
2. ___________________________
3. ___________________________
Hired a Silicon Valley UX design firm to lead a
requirements capture workshop
Hired a UX design firm in Kansas City for web
app design and user testing

24. UX DESIGN WHAT I DID...
Who does your UX and visual design?
1. ___________________________
2. ___________________________
3. ___________________________
Hired a Silicon Valley UX design firm to lead a
requirements capture workshop
Hired a UX design firm in Kansas City for web
app design and user testing
Results:
Develop a 2-sided platform (not a directory)
Content curation is critical
Initial wireframes and visual design

25. OUTSOURCE TO… WHERE?
Local
North America
Nearshore
Offshore

26. OUTSOURCE TO… WHERE? WHAT I DID...
Local
North America
Nearshore
Offshore
USA - pay more to outsource design
for a better grasp of user
requirements & culture
Offshore or Nearshore - targeted to
lower the cost of development

27. WHAT’S YOUR BUDGET?
What is the median monthly developer salary + employment costs?
● $_______________
Average team size?
● _____ developers
Average project duration?
● _____ months

28. TYPICAL NUMBERS
What is the median monthly developer salary + employment costs?
● $12.5K ($115K* / 12 x 1.3 for benefits)
Average team size?
● 5 developers
Average project duration?
● 12 months
$750K
*O’Reilly 2017 Software Development Salary Survey - median US
respondents

29. WHAT OUTSOURCING COMPANY TO SELECT?
What software outsourcing company do you recommend?
1. ___________________________
2. ___________________________
3. ___________________________

30. WHAT ABOUT...
● Accenture
● Infosys
● Wipro
● Cognizant
● EPAM
● Softek
● Luxsoft
● Global Logic

31. WHAT ABOUT...
● Accenture
● Infosys
● Wipro
● Cognizant
● EPAM
● Softek
● Luxsoft
● Global Logic
All have > 10,000 employees

32. THE 5% RULE
Your development team size should be > 5% of
the number of developers employed by your software outsourcing partner
E.g. a 5 developer team / 5% = 100,
Select a software outsourcing partner with < 100 developers
Your Team Size
Maximum Outsourcing
Company Size---------------------- =
5%

33. HOW MANY SOFTWARE OUTSOURCING COMPANIES?
About 5,000 world-wide
How much time is needed to find yours?
● _____ months

34. Less time for Accelerance
5 of our 50 partners were short-listed, located in:
● Argentina
● Armenia
● Philippines
● Poland
● Romania

35. HOW THEY RANKED...
New App SaaS
Product
Discovery DevOps UX/UI
Design
Cost
Per Hour
Argentina Y Y Y Y $35
Armenia Y Y Y Y $20
Philippines Y Y Y Y $30
Poland Y Y Y Y $40
Romania Y Y Y $35

36. TWO KINDS OF GOOD SOFTWARE OUTSOURCING COMPANIES
At least two kinds
1. Good at recruiting your team
2. Also has a discovery process to identify your requirements

37. AND THE WINNER IS...
New App SaaS
Product
Discovery DevOps UX/UI
Design
Cost
Per Hour
Argentina Y Y Y Y $35
Armenia Y Y Y Y $20
Philippines Y Y Y Y $30
Poland Y Y Y Y $40
Romania Y Y Y $35

38. What we learned in Yerevan
Smart team, great people
Most chess masters per capita
Great food & wine!
Microsoft .NET tech stack but with
insistence to build on Sitefinity CMS
Limited Discovery process

39. BACK TO THE DRAWING BOARD...
New App SaaS
Product
Discovery DevOps UX/UI
Design
Cost
Per Hour
Argentina Y Y Y Y $35
Armenia Y Y Y Y $20
Philippines Y Y Y Y $30
Poland Y Y Y Y $40
Romania Y Y Y $35

40. The new winner...
New App SaaS
Product
Discovery DevOps UX/UI
Design
Cost
Per Hour
Argentina Y Y Y Y $35
Armenia Y Y Y Y $20
Philippines Y Y Y Y $30
Poland Y Y Y Y $40
Romania Y Y Y $35
Venezuela Y Y Y Y Y $20

41. Why Venezuela?
Population 31 million
Good university system & English skills
Amazing developer talent pool
Formerly vibrant oil-based economy
Recent political unrest
HINT: Stay away or take advantage of a
highly-skilled underutilized talent pool at
a great price?

42. MEANWHILE, UX DESIGN CONTINUED IN THE USA
How to get users to create an account?
We were thinking the site would be like Airbnb or Uber
Our UX partner tested 3 concepts with users…
Concept A - Content Driven
Concept B - Browse Driven
Concept C - Filter Driven

43. CONCEPT A - CONTENT DRIVEN

44. CONCEPT B - BROWSE DRIVEN

45. CONCEPT C - FILTER DRIVEN

46. BLENDED CONCEPT

47. THE USER’S MENTAL MODEL

48. INITIAL DESIGN HOME PAGE

49. INITIAL DESIGNS
Limited info until login

50. INITIAL DESIGNS
After login…
You see all filters & service provider info

51. INITIAL DESIGNS
After login…
Full service provider profile

52. INITIAL DESIGN SP PROFILE (CONT.)

53. INITIAL DESIGNS
After login…
Your Rapid Referral
...from Accelerance

54. April 2016 - Let development begin!
Development Team of 5½ in Caracas, Venezuela
1 PM, 1 Tech Lead, 3 Developers, 1 QA, ½ time UI designer
US-based UX design team of 3 part time
1 PM, 1 UX Designer, 1 Visual Designer

55. TECHNOLOGY CHOICES
PHP on the Symfony framework
AngularJS
MySQL
Elastic Search
AWS hosted

56. PRODUCT DEVELOPMENT ROADMAP
Which side to build first for a 2-sided platform?
➔ 2016-Q2: Alpha Release -
Recruit & verify new partners
➔ 2016-Q3: Beta Release -
Limited client access
➔ 2016-Q4: V1.0 Launch -
All features, heavy promotion

57. BUT DEVELOPMENT TOOK LONGER...
Incomplete requirements from the design team
Minimal conversation about user stories
Two people left the development team
(but didn’t cause delay)
HINT: Good outsourcing companies
always have people on the bench

58. PRODUCT ROAD MAP #2
2016-Q3: Alpha Release - Recruit & verify new partners
2016-Q4: Beta Release - Limited client access
2017-Q1: V1.0 Launch - All features, heavy promotion

59. THEN WE HIRED A VP OF MARKETING
With a more sophisticated UX and visual sense than me!
And asked:
Who is searching?
How does the design fit with our brand?

60. WE FIRED...
The US design team
Then expanded…
The design team in Venezuela from
½ to 3 designers
Added a 4th developer
Added a operations expert
for true DevOps

61. AND CHANGED...

62. AND THIS:

63. NEW DESIGN - SP INDUSTRY EXPERTISE

64. CURRENT DESIGN SP PROFILE LOCATION

65. BUT DEVELOPMENT TOOK LONGER...
UX design was excellent, but became the constraint
Too many features
E.g. Verification request & reference submission on the platform

66. PRODUCT ROAD MAP #3
2016-Q4: Alpha Release - Recruit & verify new partners
2017-Q1: Beta Release - Limited client access
2017-Q2: V1.0 Launch - All features, heavy promotion

67. DAILY STANDUP, 11/10/2016

68. ACCELERANCE ALPHA RELEASE LAUNCH PARTY
Where client companies come to find the best outsourcing providers
on the planet.
November 21, 2016

69. CLIENTS TRUST ACCELERANCE VERIFIED PROVIDERS

70. CLIENTS TRUST ACCELERANCE VERIFIED PROVIDERS

71. WHAT WE LEARNED FROM ALPHA SP USERS
We wanted…
➔ To contact references & verify their expertise
➔ Sell them verified badges
They wanted…
➔ More than the 48 technologies & 23 industries we defined for expertise
Solution…
➔ Use a tag folksonomy & verify SP “success story” with reference

72. TECHNOLOGY TAGS

73. OF COURSE, DEVELOPMENT TOOK LONGER...
A new UX design was needed
Badges for success stories, not technologies &
industries
Success stories are tagged with technology & industry
expertise

74. PRODUCT ROAD MAP #4
2016-11-21: Alpha Release 1 - Recruit new partners
2016-12-19: Alpha Release 2 - All Alpha features
2017-Q1: Beta Release 1 - Basic client features
2017-Q2: Beta Release 2 - All client features
2017-Q3: V1.0 Launch - CRM features, heavy promotion

75. March 30, 2017
ACCELERANCE BETA RELEASE LAUNCH PARTY
Where client companies come to find the best outsourcing providers
on the planet.

76. THEN WE DID THE PEN TEST...
And major issues were discovered with
➔ Cross-site scripting
➔ Brute force password attacks possible
➔ No web app firewall

77. OF COURSE, DEVELOPMENT TOOK LONGER...
And we needed:
➔ An application security / stability policy
➔ A content / data protection policy
➔ Improved QA and automated testing

78. PRODUCT ROAD MAP #5
2017-Q2: Beta Release 2 - Most client features, secure
2017-Q3: Beta Release 3 - All client features
2017-Q3: V1.0 Launch - messaging, heavy promotion
2017-Q4: V1.5 Release - CRM features

79. LESSONS LEARNED
Design & Development partner selection is critical
Coordination of multiple partners
Plan on lots of UX design iterations
Do more UX testing with users
Right sizing your development team (and QA)
Better tools & better planning
Pay attention to security concerns early

80. OUTSOURCING IS SMART
There are smart people everywhere
Full team in days, not months
Easy to scale team up and down
Developers on the bench
Better than hiring developer employees

81. FUTURE PLANS
1,000+ service providers
Ongoing curation, verification & certification
CRM features
Payment processing
SP performance guarantees

82. Cartoon by Emily Flake, New Yorker Magazine, May 15, 2017
491 Service Providers on the platform
Clients can:
Search privately
Contact service providers
Get referrals from Accelerance
Request Beta access (it’s free)!
AND TODAY?

83. AND NEXT WEEK? Nearshore Nexus Conference
HINT: Only a few
Comp Passes are left!