Outsource to cover the peaks

(this post can also be found at http://www.hansoft.com/expertblog/outsource-to-cover-the-peaks/)

Quite a few years ago, when I was working as a producer, we were investigating the possibility of outsourcing parts of one of our games. The studio I was working at had no previous experience from this, but with escalating project sizes we saw an imminent need of looking into outsourcing. As a part of the investigation we talked to neighboring studios to learn from their experiences. One of the biggest lessons we got there was the following statement:

“Don’t outsource to cut project costs, do it to cover the peaks”

Let’s delve into that statement and see what it means.

The one team studio case

Let’s look at a fictive one team studio that is developing AAA games. Their typical project staffing curve looks like this: 

Up until the Vertical Slice, there would be a lot of people who won’t be able to effectively contribute, since the concept is not developed yet. The studio will probably try to front load a lot of production work to the pre-production phase. Unfortunately, many of those efforts are waste as changes in the concept will make assets obsolete or in need of a lot of re-work. The typical solution to this is to add a second core team and try to stagger the productions.

The two core team studio case

When a studio realizes that the waste from having people working too early on a project isn’t sustainable, they can boot up a second core team. That team will start building a concept that is ready for production about the same time as the first project hits alpha. The people from the first project can move over to the second project and start working.

The picture above is a pipe-dream. The studios existence is now depending on the projects aligning perfectly. However, as you probably know, changes to project scope and date are rather the rule than the exception, and any significant changes will jeopardize both projects.

The solution then is to hire a more people so that both projects can be independent of each other. And we’re back to square one. 

Outsource to cover the peaks

Back to the point I wanted to share in this post. When contemplating outsourcing your main concern should not be to cut project costs, but rather to improve organizational efficiency. 

When you are in early phases of a production it is very costly to have a lot people sitting around. This generates a lot of waste. A successful outsourcing strategy can help reduce the burn rate when you are between production phases (valleys). With a lower burn rate the financial pressure on hitting production becomes lower and the teams can focus on hitting a good vertical slice.

The goal with outsourcing is to set up relationships with external partners that can come in and support your projects when they are peaking. This way your valleys will not be as expensive and the team have a little more breathing room to focus on quality. 

The advice we were given when investigating outsourcing options, was not to look for the most cost efficient option but the one that we could maintain a long relationship with.

Building relationships takes time

At my studio, we had limited success in setting up outsourcing. Usually we were too late to realize that we are in need of outsourcing. The process of finding someone that can manage the outsourcing partners, evaluating them and setting up working pipelines is long. If you don’t do that at the start of the concept phase, you’re probably too late. The process is also expensive, but once you have built successful relationships your studio is much better equipped to handle large productions.

External Development Summit

Next week the first External Development Summit takes place in Vancouver. The focus of this summit is questions like this. One of the sessions is a case study by my colleague, Oliver Teckert, and Christophe Archambault from Virtuos which will take you behind the scenes and reveal some of Virtuos’ challenges and successes when collaborating across borders. 

I really look forward to this and will get back with more thoughts and insights from the summit. Hope to see you there!