Outsourcing: Why, How and With Who?

16 November 2018

Delegating a part of your business processes is a totally necessary habit in any successful business model. It allows each department to concentrate on their own responsibilities and to perform in an optimum manner way. Software issues, for example, have become an essential part of every business. However, not every company has a possibility to organize a separate department to solve them. And what is more not every company needs to do so. Therefore, sometimes the best solution is to outsource certain activities to a third-party.

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Wait. Why Outsource?

Regardless of the business domain, size and other specifics of your company, sooner or later, you will face a software challenge, which you will have to overcome. If your company does not specialize in technological solutions, you’re going to need someone who will develop and implement the product, and then provide the maintenance support. Some companies prefer to establish an IT department of their own. However, this will require quite a lot of efforts to assemble a team of specialists, to provide workspace and the necessary equipment, to make them familiar with the specificities of your business, etc. Often outsourcing is the more beneficial and less effort-consuming solution. Now, the question is:  how to come to terms with your needs and find the right outsourcing team?

Do I Need to Outsource?

If you don’t have any experience in outsourcing and are still not sure whether you need to outsource certain business processes, here are the benefits. These will help you engage with a software development provider.

First, deciding on the types of outsourcing the software development, you win some time to focus on your specialized activities and major competencies, which will improve your productivity. Let your specialist do what they specialize in, while IT specialists will do what they do well.

Second, a skilled service provider already has up-to-date expertise in the latest technologies and is ready to provide you with an efficient and effective team of professionals. You don’t waste any time training your own experts. Therefore, with the right vendor, you can save on time, human and monetary resources—allocating them to other, more necessary, business processes.

There are several things that you have to take into account when looking for a right vendor:

  1. Ability to deliver a successful solution is not directly connected to size, global presence, and certificates of a company. You should look for the one which suits your goals the most.
  2. Commitment to result is more important than just compliance with service-level formalities.
  3. A pilot project or a test period is a must-be feature in relations with a new vendor. If your service provider will not agree on this it is better to reconsider whether it is the right one for you.
  4. Trustworthy recommendations are a good basis to consider this company as an option for you.

A good service provider should propose for you concrete solutions with honest estimates, lead a proactive communication, be committed to understand your core business and your goals and be able to invest in the required technical and domain expertise.

How to Outsource?

Assume you have picked out a service provider. Now you should give this vendor the chance to perform at its very best. Each step of your cooperation has its own special characteristics. While getting ready to outsource, talk to your team and make sure they know all possible benefits. At this point, your company should interact with the offshore team to align their specific tasks and objectives with yours. When starting the project make sure that the vendor team is properly integrated into your firm and feel at ease. This will allow them to better contribute to the project and provide effective solutions. Only trusting and friendly relationships between the internal and the offshore teams can be successful and long-lasting. If you are interested in an efficient solution, develop trust towards your partners.

What to Share with an Outsourcing Company?

Although there is always some confidential data that you can keep, you should open certain information about your business to your vendor partner. You might not strive to do so, however, trust issues could be a serious obstacle for a fruitful cooperation. To ensure a lasting partnership and good team dynamics, you should share specific information about your firm and the current project. To these belong: an overview of the business domain, information on the company, organizational culture, history, values, structure and key contacts. Don’t forget to inform them about your business context, product features and functionalities, end-users and their business model. Let them know the technology stack (if it is already chosen – explain why), designs, and existing codebase. Also, make sure that you elucidated such team aspects as access accounts, environment and information on the resources allocated (people and time).

Micromanagement?

Lack of trust to the offshore team combined with an eagerness to complete the project perfectly could lead to micromanagement. It is a common mistake, especially of the managers who have never worked with a service provider before. You can assign a micromanager, if he/she ignores knowledge and experience of the offshore team and enforces his/her own methods of problem-solving, overwhelms the team with details losing the strategic vision of the project and constantly interferes in the work process of the offshore team, discouraging them from making independent decisions. Under the pressure of micromanagement, the vendor team gets nervous and demotivated, spends more time in meetings and reports than working on the project, avoids recommending any changes because of numerous stages of approval, etc. Surely, all these negatively affect the result.

In order to reach the balance, you need a proper management level. This includes: well-defined expectations and standards, making an offshore team aware of milestones and business impact, efficient workflow and timely responses.

How to Work Together?

Two of the most important aspects of the work with an offshore team are coherence and cohesion. Creating such relations mostly require work in three directions: relationship building, management of the offshore team and enhanced communication.

In building relationships with a vendor you should identify the relationship owners, establish reporting structure and communication channels, make sure that your staff understands the goals of the relationship with the outsourcing service provider, maintain communication throughout the project and review the provider’s performance on a regular basis, engaging in discussions with their team.

Managing the offshore team you should clearly articulate your expectations, make sure the offshore team is aware of the milestones, long-term planning and business impact, keep the task flow constant and provide timely answers.

In order to enhance communication you should translate not just technical information, but also values and culture of your company, use time-zone differences wisely, encourage teams to develop their communication skills, visit the offshore team in their location and ensure that communication channels are always open on every level: between executives, relationship owners and teams.

Which Vendor to Go With?

It can be one of those things that makes or breaks your business, picking the right outsourcing partner. In a perfect world we would all be free to redo those moments that didn’t quite work out and change. Sadly, the mistakes we make stay with us.

When making the decision for which vendor to go with, try us. We have a terrific track record of success, which means countless other clients have depended on his to help deliver their success to them.

Choosing the appropriate outsourcing company may be a challenge. Precisely because each company has its own peculiarities, this paper has helped you to outline a plan, but it may not fully define your outsourcing tactics.

One of the main strengths of a good vendor is the ability to understand the needs of client’s business and deliver the most suitable solution based on those. To make that possible, the vendor company has to establish clear communications with the clients and be always ready to tweak the product to these requirements. That’s exactly how we at NIX Solutions do things. We are ready to share our expertise with the client and aimed at creating software products that anticipate our clients’ needs and facilitate their business.