How to benefit from IT outsourcing

How to benefit from IT outsourcing

Outsourcing has been a hot topic in discussion for over a decade now. But is IT outsourcing great for small businesses? What are the pros and cons of it? How do you find a reliable vendor among the myriad of IT outsourcing services companies? We will try to provide you with the answers to these questions in this article.

What is IT outsourcing?

On the grand scale of things, outsourcing is having a third party do your work. IT outsourcing means that you are using a company that handles your software development (or any other type of IT processes) on your behalf.

Why is IT outsourcing still so popular in 2021?

So what are the main pros and cons of IT outsourcing, and what makes it so attractive to companies worldwide?

IT outsourcing: advantages and disadvantages

We want to be honest with you. Like with any other activity, there are some benefits and downsides to outsourcing. And while we can talk about multiple benefits of IT outsourcing for hours, let’s just focus on the major ones so far:

1. Cost reduction. Typically, outsourcing destinations like Eastern Europe or Asia provide the same quality of services for the lower prices. You can save 15 to 50% of your budget if you opt for outsourcing and do it the right way.
2. Hire top talent. Both US and Western European job markets are at war for the talents. If you are outsourcing, you can tap into the global pool of experts.
3. Access rare or unique expertise. Outsourcing allows you to find the specialists with the tech stack and experience that is needed for your project.
4. Flexibility and scalability. IT outsourcing allows you to easily scale the size of the team based on your current needs and remain flexible in your operations.
5. Increase efficiency. Outsourcing allows you to improve the processes and get the best results using the optimal resources.
6. Decrease operational overhead. Outsourcing allows you to cut the costs on hiring and onboarding of new team members, as your vendor will be taking care of that.
7. Speed up the processes. If you are limited by the time-to-market or any other time-related constraints, you will be able to get the needed results faster with outsourcing.

On the other hand, outsourcing can have some disadvantages if not planned and executed properly. Some of the cons are:

1. Less control, compared to in-house teams. Yes, you won’t be able to look over the shoulder of your engineers, but let’s be honest: do you really want to? Or do you need a team of seasoned experts that will do the work and won’t need your constant attention?
2. More communication required. You will need to spend some time with the team in order to explain the task properly, provide them with the context, give them an understanding of your niche, etc.
3. Need of preparation. Are your processes ready for an external specialist to come and pick up the work? Do you have stakeholders that will be responsible for communication and knowledge sharing? Is your infrastructure ready to handle a team of experts you are about to invite?

Yes, there are certain risks and inconveniences in outsourcing. But you can enjoy the benefits of IT outsourcing if it is done right.

IT outsourcing done right: best practices

Any activity can be successful, if it has a clear goal, a great plan, and a realistic timeframe. Having a roadmap allows you to account for major parts of the process, identify risks, and have a less stressful road to success.| Choose the right project Make sure that the type of work you are about to outsource can benefit from outsourcing itself. It works best for the projects that have specific requirements and timeframes. In the best-case scenario, these functions are not related to the core functions of your business. Or you can stay in close contact with the team and closely monitor the process. Have a solid plan Set clear and realistic expectations about the results of IT outsourcing. Analyse your needs and align them with the needs of your business. Then, break the project down into phases and set major milestones. Gather all the requirements and information from the key stakeholders you can (and, preferably, get these stakeholders aboard with the whole outsourcing idea). You need to understand who will be responsible for which part of the project. You might also need to appoint a product owner, responsible for the overall vision and final result. Be realistic with your budget As they say: it’s fast, cheap, and well-done. Choose two. If you want a well-executed project done fast, it won’t be cheap. If you are on a tight budget, you may need to sacrifice speed or quality of your project. Well, you understand the logic. However, we always say that you should not be too stingy about the money spent on software development, trying to cut corners as it may compromise the quality of your final product. Find a reliable vendor This step is critical for the overall success of the project. Spend some time researching the potential partners. Directories say that there are over 4,650 IT outsourcing services companies in Eastern Europe alone.

1. Create a long list of companies that offer the services you need
2. Analyze their portfolios and look for clients like yourself
3. Look for review and public testimonials to support the company’s expertise

Contact the companies that you like the most and see if they are excited about working with you. Opt for the vendors that are eager to work with you, have required tech and domain expertise, and have a proven track record.

Three major cooperation models in IT outsourcing

Assemble the team Once you find the tech partner, it is time to gather the team of experts that will work on your project. You can either interview every candidate on your own or assemble a core of the team and let them find other specialists. Have realistic estimations about the team composition. Depending on the type of software you may need:

1. Front-end and back-end engineers
2. Manual and/or automated quality assurance engineers
3. Project manager;
4. Database administrator
5. DevOps
6. Any other specialists whose expertise you might require

Plan onboarding At first, the team will need a lot of attention from you. There are several critical steps in a successful onboarding process.

1. Have a series of introductory meetings to introduce the team to key stakeholders and explain the processes within your company
2. Plan effective knowledge sharing. It sets the ground for the future success of IT outsourcing
3. Share your vision. The better your team understands your goals and plan for this project, the more they will be invested in the process

Opt for Agile Agile helps you stay flexible and pivot when the situation changes. There are a great number of specific methodologies that can be easily adapted to the needs of your product and will be the best fit for a specific project. Moreover, such methodologies like Scrum allow you to get regular deliverables and adjust the process as you go. Preserve knowledge One of the biggest reasons for the projects’ failure is knowledge loss. You need to document everything in order to accumulate and preserve the knowledge about your project. It also allows you to track changes, have information about the decisions made, and understand the logic behind these decisions. If you are outsourcing the project to your vendor completely, make sure to have a knowledge transfer session once the project is over. Set proper communication channels Having regular and effective communication will allow you to stay on top of things. You will be able to receive regular updates, track the progress of your project, and make amends should there be the need for them. Also, if the engineering team knows how to reach you, they will be more eager to contact you in the time of need or when they need strategic clarifications. Remember that it’s your project, after all Despite the fact you are outsourcing, it is still your business and your work. Make an effort to show up to meetings, check task trackers, and review deliverables on a regular basis. Even when you are outsourcing parts of the project or request a development of custom solutions from scratch, you will need to take part as no one knows your business better than yourself.

If you are ready to outsource your project, send us a message right away and we will plan your way to success!