Horror stories about outsourcing that people share online may seem terribly entertaining… Until they happen to you. Actually, in search of a trusted outsourcing partner, you may learn a whole lot of painful lessons. However, wise people learn from the mistakes of others, don’t they? Read below about outsourcing best practices or what to do not to become a lead character in such a story.
Nowadays outsourcing attracts an increasing number of followers. Nowadays outsourcing attracts an increasing number of followers. As reported by Statista, revenue in the business process outsourcing segment is expected to reach US$270,260.16m in 2020. Moreover, the global IT outsourcing market is forecast to grow by USD 98 bln during 2020–2024, progressing at a CAGR of 5% in the forecast period.
However, in which case you should say yes to outsourcing and how to do the things the right way? Look for the answers below.
Signs It’s Time to Consider Outsourcing
One day each business owner may understand that things got a little crazy. If you noticed some of the trends below in your day-to-day business operations, it may be the right time for you to start outsourcing.
1) Your in-house team can’t keep up with the demand.
A huge number of orders is the best thing that may have happened to your business. However, you should be properly staffed to keep up with the workflow.
If your budget or project deadlines do not allow hiring the required in-house staff it maybe better for you to find the right outsourcing partner which can fix the problem.
2) Your team is exhausted.
Multitasking is a common thing in many workplaces but it is also the shortest way to disaster, as it leads to low productivity. An overtasked team is not able to provide great service, which causes customer dissatisfaction.
Outsourcing may become an option that will boost your work-worn team spirit and keep the clients happy.
3) You can’t find a high-skilled talent.
When hiring, each company has its own standards. Let’s say you decide to launch a mobile app and are looking for a competent developer. You may wait for months before the right candidate appears to match your standards.
Outsourcing services may seem like a better decision as the professional you are looking for can be found within just one day or a fortnight max.
4) You are on a tight budget.
Having certain in-house employees can be very expensive. Currently, the average computer programmer annual salary across the United States is $65.142. Add such expenses as sick leaves, paid vacations, work insurance, etc., and you will easily understand the reason why IT project outsourcing is the best way to improve the financial health of your business.
5) Your in-house workers don’t have the required skills.
Your team may consist of hardworking and honest employees whose qualifications were good enough back when you just started your business, but not now.
As your business grows, there may be tasks that require new expertise. You may opt for personnel training, which is a great idea too, but still, some issues require practical skills here and now to solve.
For those who have to cope with new advanced tasks, but do not want to fire reliable employees, hiring IT outsourcing services provider is the way to go.
Now as you know when you should consider outsourcing project work, let’s get down to the next question – how to do it right?
Secure Outsourcing: Best Practices in 2020
Despite impressive statistics, some companies are still skeptical about outsourcing projects. The most common reasons for such distrust are loss of confidence and management control over business projects.
But have no doubts!
Outsourcing that brought profit to your business rival can be as beneficial in your case too. Simply follow the tips below and thus you will eliminate all risks associated with third-party support.
1) State your project objectives clearly.
To eliminate any deviation from your purposes and enable your outsourcing partner to understand your needs better, you should clearly define the project scope.
At the kick-off meeting with your partner you should specify in detail at least the following issues:
- the business problems that the project is expected to solve
- the desirable software/application/website features (their number, delivery deadlines, the technologies to be used, etc.)
- cost constraints
- important legal or safety guidelines
Yet, if this is not your case and your outsourcing partner doesn’t engage business analysts, providing as much detailed information as possible at the very start will help avoid any misunderstandings that may arise during the project lifecycle.
2) Hire a trusted outsourcing provider.
Evaluate your potential vendor carefully. Ask as many questions as you want. If a provider dodges your questions this is not the partner you need. Check their references and reach out to their clients. Do not go into business with the provider you don’t trust.
Furthermore, a great outsourcing company will always show off its ratings and achievements on the main page of the website. Look for such logos as Clutch.com, IAOP, Forbes – these companies do great rating lists – and also check the partner’s compliance with the global standards (OWASP, ISO, etc.).
3) Choose the engagement model you need.
When choosing an appropriate engagement model (aka contract type) you may opt for Fixed Price or Time & Material. These financial models constitute different ways of charging for outsourcing services.
The Fixed Price model implies your partner will deliver the project within a predefined amount of money negotiated at the start by the parties. Such a model is more suitable for short-term and small projects where the requirements are rigid and easy to define.
In the flexible Time & Material model, the cost of IT outsourcing services depends on the resources and time spent on your project. In this model, the clients pay for the total number of working hours required for project development. If the customers wish to add more features, they should pay for additional hours.
Moreover, both for the time & material and fixed price models you can choose your respective cooperation model, which can be a Dedicated Team or Team Expansion.
If we talk about the Dedicated Team cooperation model, we mean a model where a service provider offers you a team, which has the right mix of developers, testers, BAs, and UI/UX designers – any talents you may need to build a dream team. While working on your project, the team will comply with your development methodologies, corporate culture, management style, etc. The model allows you to retain the project management control and pay as you go.
Team Expansion, on the contrary, is hiring just a single or several experts that do not come together but simply add up extra competencies to your existing team. You still pay as you go, but Dedicated Team surely gives more value-added competencies and ensures higher KPIs.
4) Look for a balanced price.
Of course, it may seem tempting to hire a vendor just because of the attractive rates they offer. Remember, outsourcing project work requires balanced decision-making, which should not be based just on price. Otherwise, you are risking getting low-quality services and half-baked and unusable product, as it is very unlikely that a strong vendor would underestimate its services and sell them at a close to zero price.
5) Pay only for what you really need.
Unfortunately, some outsourcing service providers may try to upsell you their supplementary services. Although such attempts do not always mean that the vendor is not honest, you’d better exercise caution to avoid buying services that won’t help you achieve your current business objectives.
On the other hand, if an outsourcer delivers the code for you, it will only be logical to have the same company support and maintain the system. However, this will work out only in case the company has high retention rates (70% and above). Otherwise, if the team players constantly come and go, you’d better deal with the support on your own.
6) Protect sensitive data.
Data is a topical issue when it comes to outsourcing. During development, the vendor may require access to your sensitive data. The following tips may improve your data security significantly:
- Make sure that the outsourcing provider will comply with your privacy and intellectual property policies.
- Check out whether your vendor has a data recovery plan in case any force-major circumstances occur.
- Find out if a potential business partner uses the latest cyber security technologies before you grant access to your sensitive data.
7) Communicate regularly.
Effective communication is one of the major aspects of outsourcing and a key to success. Both parties should be aware of any updates to the project ASAP.
Sometimes it could be quite difficult, especially if both teams are in different parts of the world. However, the right communication tools like Skype, GoToMeeting, AnyMeeting, Hibox, Flock can address communication issues perfectly.
8) Be flexible.
Try to set realistic project goals. It happens sometimes that clients want to have their complex projects delivered in a couple of weeks. Remember, the goals must be possible to achieve.
Thus, be more flexible and try not to push things. It’s better to allocate time for the unforeseen as you’re dealing with people, not robots.
The trend for outsourced IT support is growing, allowing businesses to achieve their goals quicker and easier. Using the right third-party support that provides you with special skills and unique competencies, not just slashes costs, can help your company be agile and competitive. At the same time, a well thought out strategy for outsourcing is another way to expand your business. Keeping in mind the above outsourcing best practices, you can avoid any negative outcomes that are not a rare thing in the IT industry, thus improving productivity and reducing stress.
As an award-winning IT outsourcing company, Qulix Systems can take full responsibility for keeping your IT systems healthy. Our engineers love solving tech challenges, so you can save time and focus on your core business objectives. To discuss your project details please visit our website or contact our support team.