5 Outsourcing Tips
Most technology-related companies consider outsourcing some of their software development processes at some point or another. Outsourcing software development can be extremely beneficial for a company. It can help you cut fixed costs, speed up the development process, and gain access to a stronger talent pool.
Outsourcing can be a hit or miss for organizations. If you don’t handle the outsourcing process correctly, issues such as miscommunication, delays because of unclear deadlines, and bottlenecks in the development process may occur.
To avoid the pitfalls of outsourcing, you need to understand the risks and take active measures to prevent them. The following are some tips on outsourcing successfully.
1. Choosing the Correct Vendor
Choosing the wrong vendor can be an extremely costly and time-consuming error. Companies often get derailed by low bids, especially when they’re looking for overseas outsourcing opportunities. Instead of focusing on the bid value, it’s essential to determine if the chosen vendor or candidate understands your industry and needs well enough.
You should ideally look for an IT recruitment expert that can help you locate the best team of IT professionals for your needs. An outsourcing company will be able to find candidates who are ideally suited for your company’s needs, have the relevant skills and have proven portfolios. The company will also be able to vet the candidates, so you don’t have to utilize your resources.
Going through the right channels will give you access to the best candidates for your requirements. Using a staffing agency can save considerable time and resources that you would otherwise spend on recruitment, vetting, and background checks. This will also prevent you from making a mistake in your choice that may prove costly later.
2. Avoid Fixed Cost Commitments
Fixed cost projects can be attractive because you can set up a budget and you don’t have to worry about going over that. However, setting up a fixed cost can lead to several other concerns.
First, vendors often charge up to 50% extra for fixed cost projects to cover possible project risks and delays. Second, every time there’s a change in the scope of the project — which is inevitable — you will have to go through a lengthy and strenuous negotiation procedure. Third, once a fixed budget has been established, your vendor may focus on hitting the set price rather than quality. In the long run, fixed bids prove to be more expensive and strenuous.
3. Facilitating Open Communication
Communication is often a significant pitfall of outsourcing because you may have to consider different time zones, language barriers, cultural barriers, and a lack of physical proximity. These issues can often be the source of several other significant problems.
You can avoid this through some simple protocols. First, make sure that there’s a point person for communication on both ends. Delegate the connection to a specific member of your team and make sure you’re communicating with one particular individual on the vendor’s side. Second, hold regular meetings so you can stay up to date on the progress and so you can make sure there’s no misinterpretation of information or instructions.
4. Setting Clear Deadlines and Milestones
When you outsource tasks, it’s vital to set up clear deadlines, deliverables, and milestones in writing. You should set up clear expectations regarding the amount of work that needs to be done, dates when you check-in, and a final deadline.
You should also be realistic about the deadlines and deliverables. If you don’t set clear expectations, you may have to go through unnecessary delays that can drive up costs and throw your project timeline off. If they object to a specific request or are being unrealistic, you should be open to that and adjust your expectations accordingly.
5. Establishing WHAT to Outsource
You need to outsource tasks that your company doesn’t specialize in. For example, you can look for software developers if your organization is related to the food industry and needs an app developed.
But you shouldn’t outsource core competencies. For example, software companies shouldn’t outsource their software development projects because you may turn a third-party into a competition.
When trying to figure out what to outsource, look for tasks that are taking up your employees’ time away from specialized revenue-generating projects.
Outsourcing can be an extremely useful strategy for all organizations, and it can help you get specific projects done at a convenient and cost-effective manner. However, to prevent costly delays and logistic issues, it’s best to hire the services of a professional IT recruitment firm such as FutureSoftIT. Doing so will help you avoid all the pitfalls of outsourcing and set up the best possible team for your needs.