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When companies need Product Owners, outsourcing isn’t necessarily the first option they consider. Not so long ago, this mindset was totally justified.
However, the last 2 years have shown a fundamental market shift. As a result, in 2022, body leasing has become a reasonable alternative to hiring a Product Owner internally.
In this article, I’ll explain why ⬇
Outsourcing IT – Rising Popularity
In 2021, IT outsourcing is stronger than ever. Statistics show that by 2025, the global IT outsourcing market will be worth $397.6 billion.
Some areas are more popular outsourcing candidates than others.
For example, according to Capital Counselor, 83% of IT leaders planned to outsource their security to an MSP this year. The popularity of body leasing, in general, is also no secret.
Overall, big enterprises rely heavily on outside help. Statistically, larger companies are 66% more likely to outsource than small businesses. However, smaller organizations shouldn’t ignore outsourcing benefits. 24% of small businesses report to outsource to increase the efficiency of their business.
That being said, there are IT professionals who are not considered natural candidates for body leasing. As I’ve mentioned, one of the examples are Product Owners.
And before I’m going to tell you more about the changing landscape, I’ll briefly explain why organizations were so hesitant to rely on Product Owners from external partners.
Why Did Companies Rarely Outsource Product Owners Before?
The two main concerns companies expressed were:
- the external Product Owners’ potential lack of domain knowledge, and
- a theoretical lack of accountability.
Some also raised that external Product Owners may display availability issues since they’re not employed within the company they’re “working” for. However, in my eyes, this is a general outsourcing concern that heavily depends on the tech partners professionality – and not on the Product Owner role 1. Additionally, last year’s shift to remote operations reduced this problem significantly. Previously, Product Owners were expected to operate on-site. Now, companies gained battle-tested proof that having a remotely working Product Owner isn’t an issue.
So, overall, when you’re outsourcing to a serious partner, you should never experience availability problems.
But when it comes to the first two listed concerns, they were indeed valid. First off, enterprises were rightly concerned that Product Owners who are not experienced in a given industry will find it hard to operate efficiently in very specific domains. Next, it’s also no surprise that organizations were hesitant to lease out experts who are supposed to make crucial business decisions at organizations they don’t even technically work at.
However, the expanding digitalization and the rise of remote-first operation has changed this landscape significantly. The previous deal-breakers are now only slight challenges – or even no problems at all. Let me tell you why, exactly.
Why is Outsourcing Product Owners in 2022 a Good Idea
There will be one overarching theme for all the listed reasons. Or rather, one fuel empowering the change – necessity.
2020 and 2021 have revealed – more than ever – how short the market is on all sorts of experts. With the “employee market” reigning the IT world, it’s more challenging than ever to hire good talent. This is true not only for software developers and other technical specialists but also for other positions – and Product Owners are no exception.
As a result of these changes, Product Owners had to adapt to this new reality. And they did it very well.
Reason 1: More and More Flexible Product Owners
One of the first major developments within this role is a stronger emphasis on flexibility. More than before, many Product Owners are not strictly married to one domain but are able to work in many industries – bringing their general skillset to the table. After joining a new industry, they’re learning the ins and outs of the business specifics to be effective.
Especially with the rapidly evolving digitalization – where trends appear and die every quarter – this new flexibility is a huge asset.
Obviously, a flexible Product Owner isn’t automatically an ideal fit for every industry – but will be a good match for most businesses. I myself witnessed it working well at a wide array of different sectors, like gaming, mHealth, finance, retail, and more.
So, a few years ago, being hesitant about adding an external Product Owner to your team may have been totally justified. Today, this worry is getting less and less valid.
Reason 2: The Support of the Entire Tech Partner
Some creative business ideas are great. They may be forward-thinking, cutting-edge, and potentially groundbreaking. And, as a result, not very feasible in every company. Especially if the organization has limited access to super-senior employees or experienced architects and business experts.
Product Owners from external technological companies (like software houses) have the backing of their entire organization. They’re usually working with hundreds, if not thousands, IT experts. Thus, developing original2 solutions is easier and more realistic. What’s more, Product Owners from big organizations can learn from each other – because a huge enterprise likely employs more than just one of them.
Let me give you an example.
I remember working for a company that was developing their (as they called it) magnum opus. It was a mobile game based on cutting-edge technology (AR, VR, you named it). The CEO expressed his reservations (to say the least) about relying on external help. He was convinced that the development will be more reliable in-house. In the end, a project that was supposed to take 3 months was finally finished after 3 years. And we’re talking about an MVP… that didn’t have most of the groundbreaking ideas in it. There was no time, nor was the internal team skilled enough to get it done. A post-mortem concluded that the idea wasn’t doable in the first place – and terrible managing only added to the disappointment.
I can’t imagine this happening on the watch of an external Product Owner from a respectable technological company. I simply can’t.
Reason 3: External Experts as a Creative Boost
I love the English idiom “a fresh pair of eyes”. It perfectly depicts one of the qualities external Product Owners can add to any project.
When developing solutions in-house, the decision-makers are not always 100% unbiased. Especially at smaller companies, where a single product can be a maker or breaker of success, being realistic is not always easy.
For example, companies tend to be married to some ideas from the early days of development. But after some other major changes that occurred later in the design process, some (seemingly) core functionalities lost their purpose. Yet, it’s hard to see for somebody who’s involved from the very beginning.
Outside help minimizes this issue – and can also deliver more creative input. Thus, becoming a fresh pair of eyes for both existing and new projects.
Reason 4: Taking Decisions… Or Managing Decisions?
One of the arguments against getting external Product Owners involved is the fear to “outsource” key business decisions to external parties. Yet, that’s not precisely what a leased-out Product Owner is supposed to do.
The key responsibility of a Product Owner is to manage business goals and set up processes. Enterprises should rely on the Product Owner’s proficiency in these areas – but stakeholders should be the ones responsible for the final decisions. A Product Owner is often a proxy. And even if not, their decision power still stems from the key figures on top of an organization. Product Owners are spokespeople, representatives, negotiators – not “small” CEO making totally independent decisions3.
Sidenote: Product Owner or maybe… Business Analyst?
Companies are often hiring Product Owners when not in need of any. Instead, they should be looking for Business Analysts – or even some completely different IT experts.
External tech partners will advise you on this matter and deliver the specialist you actually need.
So, if you’d like to confirm that your search is well-aimed, drop us a message – we’ll gladly assess it. And don’t worry, it will be on the house.
Reason 5: It May Be Really Tricky to Hire Internally
As I’ve mentioned, necessity is somewhat of a driving force for most of these developments. Necessity may be also an additional reason why you may consider leasing out an external Product Owner.
The market is short on specialists. Hiring a new employee takes (more and more) time and is getting increasingly expensive. Statistics show that currently, 70% of enterprises rely on outsourcing simply because it’s cheaper than employing experts internally.
So, even if you weren’t planning to work with leased out Product Owners, you may simply not have a realistic alternative – especially since many IT experts prefer working at software houses and outsourcing companies due to the variety of projects and professional development possibilities.
Final Thoughts
Working with external Product Owners may not have been such a great idea a few years back. However, today it’s not only a viable alternative to hiring in-house, but also a better option for certain projects and organizations.
Overall, in 2022, relying on external Product Owners is cost-effective and flexible. It can also serve as a strong creativity booster.
Do you have additional questions? Drop me a message, and I'll gladly answer all of them! Thank you for reading!