Outsourcing – What Do I Need to Know?

The word outsourcing has and still is a buzz word today. Generally when folks hear the word outsourcing, it means that they are giving away a part of their service, business or work to organizations that are more familiar in the given line of work. This is true. It is always good to have an IT/Software development team in-house who has intimate knowledge of the business, and the business needs. However, there a few individuals that can be considered experts in all areas of software development, and those that don’t have the explicit skill sets, are not cheap either. I can truly say that no individual or team can be available 24/7 either without getting worn out.

Regardless of size of the company, one needs to answer a simple question, “What is my business’s core competency?” If your answer doesn’t result in talking about software development, then you would know that any activity or task that you do in software development is wasting time, money and energy. Many firms focus on outsourcing to reduce on more effectively manage the costs. I’d suggest that they should outsource the functions they do poorly or need more help in, to allow them to focus on the functions that they do well in.

So should you outsource your software projects? As a typical answer by any software consultant, it depends on a number of things. I am not going to give you a list of pros and cons of outsourcing as you can easily type those exact set of words in Google and find a number of articles that describe them. I am however going to point out a few things on how to make it work with an outsourcing vendor.

1. Start small. Any outsourcing vendor can guarantee results when they look at your project needs, but if you have not used them before, how do you know they can deliver?. I believe that you need to start with trial/small-size projects first. Not only does it give you a feel of the vendor’s capability but understand their way of working. It also provides to identify potential roadblocks or gotcha’s ahead of time.

2. “You Get What You Pay For”. If you believe the general perception of “you get what you pay for”, then you are not ready for outsourcing. I believe that pricing and quality do not necessarily go hand in hand. There are some good providers with surprisingly low rates and there are some very costly providers with astonishing poor service deliveries.

3. Total Cost. Often this area goes unnoticed. I am not talking about the rates of employees, but instead the effort estimation provided by the outsourcing vendors. If you are thinking that outsourcing your software projects will be a constant theme, then you need to ensure that you have an in-house expert who understand and can validate the effort estimates provided by your vendor.

4. Communication: We have seen a number of commitment and communication breakdowns from clients that result in not making outsourcing work for them. Since we talked about price, rates are just that, rates. The total cost of outsourcing is not dependent only on the rates. You might get a very low rate. But if there is a communication/process breakdown, the cost might be significantly higher. Ensure that you are ready to have one or two point-of-contact resources to interact with the vendor.

5. Process. What is the process that is followed by the vendor? How involved will you be in them? You need to be involved as it is your project, and need to make sure that visibility is there from day one. Anyone can develop code, but ensuring that the right product is being developed is a challenge. Ensure that your requirements are captured accurately. Even if a business does things in-house, we have seen projects fail due to the poor requirement documentation. How can you guarantee that it won’t happen with an outsourced project?

6. Be Selective: Ensure that you know who is working on your projects. This results in knowing the profiles of the leadership team and the team members of the project. It is important to know how the outsourcing vendor operates. Ensure that you have a point-of-contact that is domestic as communication and difference in culture may be a barrier if interacting with a person outside of your country.

Without some clarity and consistency in goal setting, communications, and measurement, the outsourcing relationship may produce more headache than results, and the risks of the outsourcing may outweigh its rewards.

Source: EzineArticles

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