Co-located Outsourcing: The Newest Trend In Tech Outsourcing

Co-located Outsourcing: The Newest Trend In Tech Outsourcing
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Steve Lohr wrote a great piece for the New York Times today, called “Hot Spot for Tech Outsourcing: The United States

“As brands pour energy and money into their websites and mobile apps, more of them are deciding that there is value in having developers in the same time zone,” Lohr writes.

While I absolutely agree with this statement, I’ll take it one step further. Onshore outsourcing isn’t the best we can do. A co-located team is better. Co-location is hands down the single most effective way to get work done. Having the entire team in one space provides a significant advantage.

Lohr touches on this by quoting Vishal Sikka, the CEO of Infosys as stating “you often need whole teams locally.”

Whole teams locally. That’s the key.

Technology is eating the world. Companies are becoming more reliant on their software products and platforms. In fact, I believe that the teams with the biggest competitive advantage in the decade to come will be the ones that can make their software development process a well-oiled machine.

And, the best way to hone a top-notch process is to have everyone who works on that team to literally be located in the same room.

In his Times piece, Lohr mentions that Nexient, an onshore outsourcing firm, has chosen to have offices outside of big tech hubs like the Bay Area and New York. The theory is, there’s tons of tech talent outside these areas, and living costs are less. Therefore, you get employees for cheaper than in the Bay Area and NYC.

I disagree.

The problem with this theory is that being remote is not equivalent to being co-located. Yes, there are definitely advantages in having your remote team share your time zone. But, having a remote team that’s four hours aways is significantly less effective than having your team co-located in one space.

The data on the benefits of co-location is strong. Fast Company highlights the benefits of co-location in The Science of When You Need In Person CommunicationForbes discusses them in The Immeasurable Importance of Face-To-Face MeetingsHarvard Business Review, in Workspaces That Move People tells us how Google, Facebook and others are moving mountains to ensure their teams are in the same physical space.

The data is conclusive. In person, face-to-face, co-location is the most effective form of communication, especially when you are faced with brainstorming and solving complex issues. Software development is often complex. And, the more that companies rely on technology to be a differentiator, the more complex it becomes.

At our Agile software development consultancy, we take co-location seriously. Unlike the firms highlighted in Lohr’s article, Stride embeds full time with the tech teams we work with. Not just for a couple of weeks, but for the entire length of the engagement. As tech teams across the US and the globe continue to grow at hockey puck stick pace, the ones that can form the highest functioning teams will have a significant advantage. The ones that colocate will have a leg up. Given the tech talent shortage, it’s not surprise that firms like Stride, Nextient, and Infosys are expanding rapidly. Colocated outsourcing is, dollar for dollar, the single best approach for teams solving complex problems.

Originally posted on NewCoShift.

Debbie Madden

Debbie Madden

Founder & Chairwoman

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