Nowadays CIOs are charged with the additional duty of transforming organisations into better enterprises. The next generation of decision-makers navigates their businesses through changing marketplaces by relying on an architecture that is scalable, capable of fast reaction, and equipped with tools that provide insight and decision support from the perspective of business growth.
According to research done by a leading analysis group, 31% of IT software development services were outsourced in 2017 and this trend will continue. Software Outsourcing has altered the way business is conducted in virtually every area. Though it is a progressive process that grows over time and in accordance with industry standards, the fundamental goal of any successful project is to accelerate the speed of one’s business and enhance its efficiency. Outsourcing is unquestionably a boon to companies in today’s dynamic economy.
However, the process or steps involved in selecting the right IT outsourcing partner must be carried out after a thorough analysis of numerous factors, any one of which, if overlooked, can cause a project to run way over budget and schedule, leaving the business or product far behind its competitive advantage in terms of go-to-market. Outsourcing-related problems such as over-promising, under-staffing, security breaches, culture shock, and a variety of other variables can convert profit margins into cost overruns and software that falls well short of customer expectations.
To maintain a competitive edge, businesses must exercise caution when selecting the right outsourcing partner. I’ll outline some of the procedures you should take before selecting your software development company for the aim of creating a global delivery model that leverages onshore and offshore benefits in this article keeping the technical expertise in mind.
The following are some pointers for selecting an outsourcing partner. These recommendations might assist you in identifying the most suitable offshore partner for your organisation.
Tips For Choosing The Right Outsourcing Partner
1. Clearly define the area of job
Before you begin contacting a particular offshore partner, create a detailed scope of work document for the best outsourcing partner match. It is your duty to establish an outsourcing partner’s objectives, determine what your firm requires, and determine the best viable solution to accomplish your objectives including post-development support.
If drafting a scope of work document seems too complex at first, you may perhaps begin by answering some basic questions such as
- What is your precise requirement?
- What is the best possible answer to this?
Answering these two straightforward questions can assist you in identifying the problem you’re attempting to solve, developing a clear roadmap for resolving that problem, and defining your overall business goals.
2. Conduct due diligence on track records
Learn more about your outsourcing partner’s expertise, the kind of customers for whom they have given services, and the number of projects completed. Determine whether your offshore partner has expertise providing the needed services at the size required by your organisation. This information might assist you in determining whether a particular outsourcing service provider is the greatest fit for your organisation.
3. Identify an information technology provider with the same discipline and zeal as bigger corporations
If you are a Fortune 500 company, the size of your outsourcing provider is irrelevant; but, for smaller businesses, attracting the interest of one of these major corporations might be difficult. When hiring an IT partner, check the background of the main team’s competence.
4. Appointment of Demonstrations and Interviews
The most critical stage in the selection of an IT vendor is determining the value that a possible IT outsourcing partner will provide to the business. Request demonstrations of the technological solutions proposed by the shortlisted outsourced suppliers. This will aid in predicting their competence and the degree to which their suggested solutions can be integrated into a company’s IT ecosystem.
Additionally, arranging demonstrations enables you to evaluate offered solutions prior to investing. This enables them to identify the extent to which they can meet stakeholder expectations and business needs. As a result, businesses should schedule demos prior to selecting and confirming a vendor.
During this step of the outsourcing partner selection process, the following questions should be addressed:
- Is the suggested solution appropriate for the organization’s users?
- Is the suggested technology known to the technology team?
- What risks are associated with incorporating the proposed technology into corporate processes?
- Are the suggested technological solutions economically feasible, according to the company’s stakeholders?
- How was the demo experience – were there any bugs or poor UX implemented by the team?
5. Verify knowledge in a variety of software technologies
Multiple software technologies knowledge is sometimes underestimated but is critical to the success of any outsourcing contract. Choosing a vendor that is only familiar with a few technologies, even if they are best in class in the ones you believe are correct, exposes you to the “hammer and nail” dilemma: every problem appears to be a nail to someone equipped only with a hammer.
Bear in mind that you’re employing the outsourcing vendor to provide knowledge that you lack internally, so take care not to replicate your own limits with this selection. To enhance your chances of success, seek a partner with developers that are proficient in a range of technologies.
6. Request samples from your outsourcing partner
Obtaining samples from your outsourcing partner might assist you in determining whether the outsourced partner meets your expectations. Additionally, samples will provide you with valuable insight into your IT partner’s skills, technical experience, and degree of quality. After reviewing these samples, if you have any questions regarding the feasibility of your project, request a prototype from your outsourcing partner.
This enables you to determine whether your outsourcing partner understands your company objectives and whether they have the necessary procedures, technology, and people in place to manage your project.
7. Incorporate agile development methods into your development process.
The only way to thrive in today’s industry is to adapt to constantly changing consumer expectations. Agile techniques are required to adapt to your clients’ changing demands.
Agile techniques foster collaboration and produce rapid outcomes. If you want to be a leader in your market, choose an Agile provider who can swiftly adjust to changing client requirements.
8. Request for Proposals (RFP)
Now that the business requirements have been identified and a list of potential IT partners has been compiled, it is time to verify and assess the assumptions. At this stage, it’s time to draft a request for proposal (RFP) or a request for quotation (RFQ) to send to prospective IT outsourcing partners.
If the intended service, quality, or ultimate outcome is different for each vendor who is likely to respond, an RFP is produced. On the other side, an RFQ is used to solicit quotes for straightforward services with no possibility of desired service or product difference among responding suppliers. The following are some of the objectives of the RFQ and RFP:
- Obtaining comprehensive bids from IT suppliers that demonstrate their subject knowledge and experience.
- Negotiating the best feasible deal and finding the vendor that is most suited to the company’s demands.
- Establishing defined objectives, duties, and limits to ensure a long-term good relationship with the outsourcing partner.
Businesses should produce these documents to effectively articulate their business objectives and requirements to the vendor. While the primary elements of these papers will vary based on the firm, there are a few sections that every RFP and RFQ must have, including:
Specifics of the submission
- Overview of the business and its objectives
- Specifications in detail
- Constraints of business
- Conditions d’utilisation
- Criteria for selection
After producing such a document, distribute copies to each vendor who appears to be a good fit. Additionally, add contact information in the document so the vendor may contact you with any questions.
9. The IT Partner’s cultural compatibility
As competent IT executives, you will have conducted due research, gathered references, and conducted site inspections prior to picking your partner. However, you must also evaluate the cultural fit and the scale of the organisation with which you are collaborating. You do not want to be a very little inconsequential participant whose retention is irrelevant to the outsourcer.
Similarly, you require a partner capable of meeting your organization’s requirements with minimal, if not no, delay. Consider your partner as a long-term strategic match, not a quick tactical cure.
For instance, your company’s Sales & Delivery presence should offer you local touchpoints at each level of the process to guarantee a seamless transition and to address any cultural differences promptly and effortlessly. Additionally, a unique and robust CIO Ecosystem provides peer assistance from former CIOs situated locally to help you “get it right the first time.”
When it comes to developing a company solution, there are always two choices: hire an in-house team or outsource the work.
While many organisations find it challenging to outsource their needs, outsourcing may help firms expand and become more efficient. Indeed, several well-known worldwide firms such as Github, Skype, and Slack have done so previously. The only remaining question is if you’re willing to follow their lead.
If the answer is yes, the following are the primary considerations when selecting an outsourcing partner for your next company concept or project.