Books / Advice on running an outsource software development shop?


So there's tons of documentation and books on project management, agile development, how to manage outsourcing projects, how to send our project offshore, etc...

But I'm on the other side, I'm running an offshore / outsource rails development shop. I started out as a one person dev team, as the technical lead, now I've got a dozen developers and three major clients. Things are going well, and i feel like I want to keep growing. We're adding a developer a month at this point.

My problem is, I realize that what has worked so far will stop working as we grow. So my question is, where is the documentation about how to build a company from 10 people to 50?

The primary work, building amazing applications and website for clients we know how to do and are good at. I've even discovered that I'm pretty good at sales. But I've always been on the engineering side of things and never paid much attention to the biz side.

So where should I go for information, what should I read?

Books Outsourcing Consulting Business

asked Feb 26 '10 at 03:05
141 points
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2 Answers


Agreed - tough to find info from this vantage point.

Is your definition of an outsourced software development shop vs a standard software development shop is the physical location of the developers? Besides the obvious problems of managing geographically disperse staff, is there something else managerially challenging that may not be obvious?

Here is an interesting q&a video link from interviewing a software dev services company president. May not be applicable - but eric sink's book on the business of software may be of value - seems a bit micro-isv focused.

Cusumano's book on the business of software may be better suited.

Perhaps Bob Walsh will check in on this topic...

answered Feb 26 '10 at 04:41
Jim Galley
9,952 points
  • I believe the problem is more of just how to run a shop which provides software development as a service. Offshore or onshore is kind or irrelevant. I can run a dev team, and build quality software. The question is what's the best way to structure the rest of the business to support that. – Rabble 14 years ago


You are definitely going to risk a lot with the growth of the business. It appears based on your comments that you are making your customers happy and that you are developing great software.

My opinion is that it WON'T scale. It is hard enough scaling/growing a company that makes their OWN product while keeping quality and passion. When you add to it the fact that you are commoditizing software development, you are going to lose the quality and passion in the long run. You might as well be flipping burgers (which does scales well) In my experience developing software for others doesn't scale well/at all.

IMO - I don't think it is possible. Outsourcing + Large = mediocre software (at best).

What to do about it?

Leverage the knowledge and experience you have and grow your own software company/product. This, in fact scales better than just selling hours of work. You would not be the first company to finance/subsidize product development with consulting work.

answered Feb 26 '10 at 05:51
Tim J
8,346 points
  • Agreed hourly billing doesn't scale as well as selling your own app, but I can't say it doesn't scale at all or has a limit. There are some huge accounting & law firms that bill by the hour. Maybe small firms attract better people? Once you're past the founders, I'm not so sure. – Jeff O 14 years ago
  • @Jeff, Accounting and law is not even close to the same kind of thing as software development. A body-shop software outsourcing company can be profitable and grow - but who wants to work at those kind of places? Certainly not me. – Tim J 14 years ago
  • It's not the "hourly billing" that doesn't scale, it's hiring 50 people who are all good. Also at that scale you're constantly hiring new people, and HAVING to hire them fast because of job churn, and that's working against the idea of only hiring top talent. – Jason 14 years ago
  • In the long run, i hope to use the software development services as a way of bootstrapping a product business. We've got a few products in the pipeline. But to get there, we need to have a solid development business. So first things first, i've got to meet the needs of our clients because that's what gives us resources to do products. Where do i learn about running a good contract dev shop? – Rabble 14 years ago

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