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Why in the world would you outsource product management?
That’s the question I had when I joined Forte over 3 years ago, tasked with standing up our Outsourced Product Management practice. On the face of it, outsourcing Product would diminish a company’s control. In fact, the opposite is true in most companies.
I’ve spent 20 years on the Client side, working for companies like Disney, and solved tricky problems like defining one of the first mobile browsing UIs (which led to 2 Google patents). I learned firsthand the challenges and opportunities of leading in-house Product teams while working with outsourced Engineering teams.
Time zone differences, cultural and language barriers and different ways of working are just some of the typical challenges I faced. Inevitably, it led to delays and/or rework. I often would spend a few months ramping up the outsourced engineering team on domain knowledge, business goals (desired outcomes), story-writing and backlog management best practices, and other product owner skills, to overcome the challenges.
Based on this experience, i knew at forte we could improve our client’s product management effectiveness with outsourced product services… but would anyone buy it?
Turns out, the answer is yes: because letting go of the sprint backlog paradoxically gives companies more control over the product backlog… leading to (a more effective) outsourced scrum squad.
If you have already decided to hire an outsourced engineering squad, it turns out that attaching an outsourced Product Owner to that squad is more effective than managing that squad’s sprint backlog in-house. There are five reasons for this: time differences, cultural differences, squad agility, cost, and the Leveraged Product effect.
See Figure 1. The 5 Benefits of Outsourced Product Ownership.
Let’s look at each of these:
- Time Differences – Outsourced services are often in significantly different time zones. In an agile environment, it’s necessary for product to be readily available for engineering during the work day. If you’ve ever had an in-house Product Owner managing an outsourced squad in a different time zone, then you’ve had situations where the time zone differences have caused painful delays in development. And these delays are doubly painful, due to the context-switching that it causes for Developers (well, context-delaying in this case).
- Cultural Differences – Forte prides itself on our language and cultural training for all our staff – especially our engineering squads (whether or not a product owner is attached). That said, having a Forte Product Owner embedded with the team assures that nuances from the Product Manager are captured. Moreover, the cultural differences between product people and engineers are also minimized.
- Squad Agility – Because the outsourced Product Owner is embedded in the team and is in lock-step with your Product Manager, your outsourced agile squad is more empowered to make decisions.
- Cost – outsourced Product Owners are more cost-effective. Direct costs are
a bit lower. The real cost savings come from two areas: 1) The Leveraged Product Effect (explained next) and 2) improved time-to-market, because time zone inefficiencies are minimized and all members of the Forte Team are well-trained on our mature agile practices. - The Leveraged Product Effect – When a company hires an Outsourced Product Owner, not only are the above problems addressed, but the effectiveness and efficiency of your in-house Product team is multiplied. Your in-house Product Manager becomes the key Stakeholder for Forte’s Product Owner. Forte’s mature agile practices assure transparency into the inputs and the outputs of each sprint, as well as overall progress toward mutually agreed upon Desired Outcomes, as measured by well defined Success Metrics. With transparency, assurances and demonstrated results from Forte, your Product Manager has more time to focus on higher-value strategic activities.
Outsourced Product Ownership works particularly well for Mid-Sized companies ($50 million to $1 billion in revenue) and well-funded fast-growing companies who need results fast, but don’t have time, capacity or processes to adequately Product Manage their outsourced Engineering squads. To see how this works, check out The Outsourced Product Paradox Case – Discovering Faster Time-to-Value case study, where Forte’s Sr. Product Owner, Olindo O., works with our Financial LLM AI Client to uncover a faster way to achieve the company’s goals.
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