Entrepreneur
Article
By Andrew Neitlich

The right and wrong way to manage outsourced talent

By Andrew Neitlich

I am working with two development teams in the USA. Both utilize off shore talent. Both charge low fees for off shore talent, and high fees for their own time as project managers. The ratio is about $1500 per week for their time vs. $300 per week for an off shore resource.

So as a customer my incentive is to cut off the expensive talent, if I can.

In one case, that is easy to do. That’s because the project manager isn’t doing much more than passing my comments about the site on to the off shore talent. There is no value added advice, architecture development, etc. If anything, direct communication would be more efficient and effective, so I could even make the argument that the project manager is costing me value rather than adding it. In fact, I bid out completion of the project to an off shore resource I know, and his bid came in at 1/10 the price that it will take me to complete the project as it is currently structured.

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In the second case, the project manager troubleshoots, provides business and technical insights, removes and replaces underperformers, and more. He does provide value. Even in his case though, eventually the project should sustain itself so that he is no longer needed, or so his role can decrease. But he knows this, and is helping us get to that point as part of his model, with sophisticated collaborative tools and by developing a platform that a non-technical person can manage. And, should our business take off, we will need to increase his role to continue to build the product out. This seems to be the right way to set up and manage a team.

I think that the key to combatting outsourcing is by serving in this project management role. But you have to be sure you are much more than a conduit back and forth between the two parties (client and off shore resources). You have to really provide some value, or you will be cut out.

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