When you think of outsourced software development, you might think of missed deadlines, language barriers, and glitchy finished products. Andy Hilliard thinks you should ditch those negative stereotypes. After 20+ years as a leader in the IT industry, he’s cracked the code on how to build a high-performing tech team even if they’re three time zones away.
As the President of Accelerance, the leader in global software development outsourcing, Andy regularly travels the world to forge software development partnerships with top engineering talent as far as Poland, Bolivia, and Sri Lanka. He’s cultivated successful nearshore and offshore development teams for major organizations like Disney, PayPal, and Target. And now, he’s sharing those hard-earned outsourcing strategies with the DIG SOUTH community. Andy joins the lineup for DIG on the ½ Shell on October 25th, an epic half-day event packed with unbeatable networking and learning opportunities.
In the Q&A below, he shares insights on how to successfully manage a distributed team, which emerging tech hubs should be on your radar, and why the standard approach to outsourcing simply doesn’t work.
You have an MBA from Northwestern and London School of Business, as well as an impressive background in marketing. Why did you make the shift to tech, and specifically, what piqued your interest in outsourced IT?
Well, my area of focus at Kellogg was marketing and international business, which I parlayed into a great opportunity after graduation with a little company called Cognizant. They were little then: about 1,000 of the smartest engineers in India. I was one of Cognizant’s first Division Managers, which gave me a comprehensive exposure to outsourcing software development. By the time Cognizant hit 15,000 engineers a few years later, they lost interest in serving small and mid-sized clients; I saw this as an opportunity to build my own company. But, instead of locating it in India, I felt there was a strategic advantage in a nearshore location. I chose Costa Rica, where I’d served as a Peace Corps volunteer after college. The company was called Isthmus, and it quickly became the leading Service Provider in what was then an unimaginable destination. Costa Rica is now one of the most popular outsourcing destinations in all of Central and South America.
Why should tech companies consider outsourcing their engineering efforts versus hiring in-house?
For our Clients, outsourcing solves a variety of problems: limited capacity, cost, a skills gap, risk diversification, HR issues, even labor arbitrage. On the first one – limited capacity- I just got back from Melbourne, Australia: they are dealing with the same challenges faced by companies in Sydney, Berlin, London, New York, the Valley, and…well..Charleston, I would imagine. The ideal is always to work with a person sitting in the desk next to you. The reality is there are great constraints on talent in mature markets around the world. The good news is your ability to engage a remote workforce is better now than ever before.
You’ve managed development teams of 250+ people. What’s your best piece of advice for managing a distributed team, whether they’re spread across the US or multiple time zones?
Two things: treat the team like they are your employees and expect success. In the early days of outsourcing, a remote group was often referred to negatively as “coders.” Too often, a company would take a problem they couldn’t figure out and “throw it over the fence” to the remote group to figure out. To make matters worse, they would turn their backs on the group and just show up at delivery to find out what did (or did not) happen. Under these circumstances, success would have almost been an accident. When you engage your team with respect, as professionals, like you would any other person on your team, good things will follow.
Without giving away too much of your DIG on the ½ Shell talk, what are 2-3 quick tips every company should know before outsourcing software development?
First, get organizational buy-in. While you may be looking for a technical solution to a technical problem, it is critical to understand the business and management aspects of what you are endeavoring. Second, be specific and “greedy” when defining the “perfect” group. There is an ideal group out there, you need to understand what can be “on the table” and find the group that meets those requirements. Finally, don’t focus too much on price. While there are pricing advantages, “lowest price wins” is no way to select a Partner. Better to understand the many direct and indirect benefits a quality remote partner provides.
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You assess your clients’ ‘internal preparedness’ before finding their ideal outsourcing partner. Could you share 1-2 factors that show you when a company is ready to outsource?
A company is ready to outsource when they understand that success in outsourcing is about finding a Partner, not hiring a Vendor. It’s about forging a cultural bond with that Partner, not just getting lines of code written. It’s about investing in people and a process; a commoditized, “lowest price wins” objective is thankfully a relic of a bygone era.
You also vet and verify all of your software outsourcing partners. What qualities do you look for when bringing in a new development partner?
Generally, we’re looking for a very high level of organizational and operational experience, maturity and focus. So this means you need to be in business for at least five years, with at least 75% of your work with a US or English speaking audience. You need to have a defined expertise in certain technologies, in specific industries, building teams of a particular size: generalists won’t work. A collaborative culture is required also: no order takers.
What’s one of the greatest software outsourcing success stories you’ve witnessed while at Accelerance?
I would say a common arc in the “great” success stories we’ve fostered involves an initially skeptical, reluctant Client who, in the end, becomes an enthusiastic advocate. We see this frequently. In the beginning, the Client’s guard is really up. They soon realize they are not dragging this remote team along; rather, the remote team is collaborating side-by-side with the in-house group, often even leading. The nature of projects then changes from a limited scope, support role, to carving out an entire project the remote group “owns.” These relationships organically grow from there, where Client/Partner counterparts become more than colleagues and teammates, but friends. To illustrate, in one relationship we fostered, the in-house and remote groups became so close, some from the US team traveled to South America to attend a wedding. It’s great to see.
You travel the world scouting top developer talent. Are there any emerging, international tech communities that might surprise us?
Definitely. In Southeast Asia, the Philippines has always been known for BPO work but should be considered “well-established” in software development. In South Asia, Sri Lanka is now an attractive alternative to India. There are several countries in Eastern Europe worth following: Armenia and Serbia for instance. In Western Europe, Portugal is really developing a name for itself. In South America, we have Partners in Bolivia and Venezuela, both doing terrific things despite the hardships faced in these nations overall. Closer to home, we like Puerto Rico but it’s undeniable last year’s hurricane has slowed their progress. In each of these countries, you can expect top flight engineers combined with highly experienced management. If you want to build a team of up to around 8-10 engineers, you will be fine. For larger teams, you will be better served considering more established countries.
You’ve worked as an IT industry leader for nearly 20 years. What’s been the most exciting shift in the industry, and where do you think it’s headed next?
The most exciting shift from 1998 to 2018 is that there are excellent software development companies all around the world: you don’t have to look only in India. Along with this, there are companies perfectly aligned to your company’s needs: no longer do you have to rely on generalists to figure things out. With Agile methodology and a wealth of video conferencing options from which to choose, solid, working relationships are now being created where once there were fundamental barriers.
Going forward, I see generally accepted business standards being fully embraced by even the most remote markets. Foreign-nationals, educated in the US and Western Europe are returning to their home countries, opening development shops, instituting these business standards, and selling Services back to hungry — but demanding — “first-world” markets. There used to be a pretty big drop off when you moved into a second tier or third tier market. That’s not so much the case any more and will be even less so in the years to come.
What’s one key takeaway we can expect to learn from your upcoming DIG talk?
By following a thorough, detailed process when identifying and onboarding a Partner, you can enjoy all the benefits an outsourcing Partnership provides. But that process doesn’t work by simply asking a friend for a referral, a DIY search is not a good use of time, and a traditional RFP often produces adverse results. You will get there more quickly and cost effectively by leveraging the talent and expertise of a group dedicated in the space, and that group is Accelerance.
If you’re considering an outsourced technology project (whether with a remote team in the US or a crew halfway around the globe), don’t miss your chance to learn directly from this industry veteran. Andy joins us at DIG on the ½ Shell, October 25th in Charleston, to offer expert guidance on how to leverage outsourced development teams to achieve predictable, manageable results. Limited seats remain; grab your ticket here!