IT outsourcing horror stories can be somehow entertaining, only when they haven’t happened to you. But, it’s better to learn from the mistakes of other people. The technology is increasingly growing, and it has brought about new developments in outsourcing.
In 2014, the global IT outsourcing industry was valued at $76 billion. More than half of that value was generated in Europe, Middle East, and Africa. Statistics have revealed that the UK spends more than £15 billion on outsourced IT contracts.
This number is expected to grow as many companies are now turning to outsource IT services for them to increase efficiency. Here are some of the best practices in IT outsourcing.
Determine if the project is right for outsourcing
Not all IT projects require outsourcing. Large projects have specific requirements, but these projects can at times be not directly related to your organization. For example, if your organization is developing a component of comprehensive software, you can outsource the services of an IT company to design and test the component. This gives the internal team the time and resources to focus on developing the quality and features of the main software
Develop a plan
You need to understand your requirements before an outsourced IT company understands them. Vendors can only provide realistic proposals if you have clear and realistic objectives which have well-defined timeframes.
If you provide more information to your vendors, they will be able to estimate the size and value of your project very easily. Although not all plans go as expected, a definite plan has a higher chance of success than a poorly-defined plan.
Choose a company you can trust
When you decide to outsource IT services, the service provider becomes a part of the organization. So, it is advisable to choose a provider who not only understands your industry, but one who fully understands your business objectives and culture.
If you happen to have larger IT projects or you are looking for a long-term contract, you can start short-term projects with the aim of forming a relationship with the vendor. This helps you to evaluate the vendor without risking your critical projects.
Hire a dedicated team
Most outsourcing companies offer their services based on the traditional Time & Material (T&M) model. With this model, payments are usually based on the time and the scope of your project.
However, some providers allocate the T&M model to their clients based on the availability, rather than previous experience. This can become very costly for organizations looking to outsource long-term projects, multiple projects or waiting for new developers to catch-up.
Nowadays, companies looking for specific and special development resources prefer choosing dedicated teams. Basically, dedicated teams comprise of developers who work on your project right from its beginning to its end.
Mostly, these teams consist of professionals who clearly understand your specific needs which give you the opportunity to focus on new projects without incurring extra costs of hiring and training new developers.
Outsource your R&D
Both outsourced development and outsourced research are growing at the same rate. That’s why many organizations nowadays prefer in-house R&D as it allows them to keep the complete ownership of the knowledge gained.
However, outsourced R&D assists the organizations to access resources that can provide them with more human resources and a faster time to the market.
A common form of R&D is Virtual Captive Units, which allow a vendor to create an offshore R&D center which focuses solely on delivering the requirements of the client. Ukraine is one of the countries with strong outsourced R&D industry. It is valued at $3 billion.
Own your project
As the manager, you should be actively involved with the outsourcing project like the way you handle in-house projects. You can use tools like Trello and JIRA to track changes, objectives, and updates.
You should be able to monitor the quality of the codes written, and convey any concerns or doubts immediately. You don’t need to manage every development stage since that’s the work of the developer. But you should be able to ensure the project remains aligned with your timeline and goals.