Today, businesses must carefully evaluate a wide range of considerations beyond costs in determining the optimal outsourcing model and partner. For several companies large and small, the discussion is no longer about “why” or “what” they should outsource, but “to whom.”
The first step in determining the right outsourcing partner is to articulate how your outsourcing partner will advance your business strategy. What benefits can you expect in terms of cost savings, process efficiency gains, quality improvements, and competitive advantages? Also, what level of risk are you willing to accept to reap these rewards?
In a nutshell, the goal is to identify the partner who will help you yield the maximum strategic benefit—combining the best talent, cost structure, infrastructure, etc.—at the minimum risk.
Here are 7 deciding factors that will help you finalize, if not, then at least shortlist your outsourcing partner.
1. Agile methodology -
Choosing an Agile partner ensures more focus on core product features rather than the development process, reduced communication time within dispersed teams, increases efficiency in domain knowledge transfer and also ensures predictability in delivery.
In fact, according to the 11th Annual State of Agile Report, 98% of respondents said that their organization has realized success from implementing Agile in their projects.
One of the major reasons for this astounding success is that the Agile software development methodology shuns the long-term fixed planning that was once thought to be vital. Instead, it works on a continuous improvement principle in which, the agile developers form small, self-organizing teams and produce prototypes as fast as possible, then use customer feedback to refine again and again.
Opting for a partner who is not Agile rips you off with obvious benefits of transparency, seamless communication and the business-value first approach.
2. Direct access to developers -
You must be very well aware of the scenario depicted in the picture above or might even have first-hand experience. Lack of direct access to developers can cause situations like this.
In most cases, the single point of contact between the client and the outsourcing company is the project manager. The project manager acts as a mediator between the client and the outsourcing firm thereby creating a longer communication chain than required. This, in turn, gives rise to lack of direct communication, increasing the rework and a longer go-to-market time, which can prove to be fatal especially for SMBs.
Directly working with the team, therefore, becomes very critical also in terms of getting visibility into the operational processes and expertise of the company. In addition, direct access ensures transparency in the development of your project, significantly reduces the turn-around time and also promotes rapport building.
Consequently, before settling for an outsourcing partner it is necessary for you to ask the company about getting direct access to the developers working on your team.
3. Mode of communication -
While getting direct access to your outsourcing partner is great. It is also important to have a streamlined communication process in place. The more the number of communication barriers between you and your outsourcing partner, the lesser the chance of an effective collaboration.Streamlined communication plays a critical role especially for teams that do not share the same physical space.
Most outsourcing models have a pre-decided set of communication and collaboration tools that they use to converse or work in partnership with the client. An ideal outsourcing partner should give you the freedom to select the communication & collaboration tool of your choice.
Allowing your virtual team to use your company ID to coordinate with your clients directly will also help you deliver effectively and within time.
However, it is also necessary to choose a company who won’t poach your clients.
4. Scale up & down -
Several outsourcing companies work on the fixed priced model which does not allow any changes to be made to the team while the project is underway or allows the changes at an exorbitantly high cost. This restricts your ability to scale up and down of the team in a single plan and forces you to work with some technology team that you may not really be in the need of.
We strongly advise opting for a partner who gives you the flexibility and expediency to easily ramp up and ramp down the number of developers across technologies instead of paying for something that you do not actually need.
4 handy questions that you can ask to ensure this –
- How soon will you be able to scale up?
- How much notice will I have to give before I decide to ramp down the developers on my project?
- What kind of technologies will be accessible to me in this engagement model?
- Will there be any additional costs attached to scaling up?
The answers to these questions will help you ascertain your compatibility with the outsourcing partner and give you a kickstart on identifying your key requirements as well.
5. Tech maturity -
It is great to find an outsourcing partner who is an expert in one particular technology that is most relevant to your project. However, finding a partner who offers a full-stack is icing on the cake. Why settle for a master of one trade when you can opt for a master of many?
More often than not, technologies are intertwined and no project can solely be developed based on just one technology. Even if it is, other technologies surely help in increasing the efficiency.
The right choice to make in this case would be to go a partner who offers a full-stack option. That way, even if you have any other project requirement or a need for a particular technology expert to solve an issue, the resource is easily available.
6. Innovation -
“Innovation is not about ideas, it is about making ideas happen”
The importance of innovation in today’s world of cut-throat competition cannot be overstated. Even if you have an internal R&D team it is best to opt for a partner who also implements several measures to foster innovation in his organization.
Choose a partner who has been around for a considerable amount of time and who follows best practices, have knowledge repositories and leaves a whole lot of scope for innovation.
Besides, direct access to developers fosters innovation at the code level itself.
For example: If you require a form to be developed on your website in a certain way. The developer can suggest the kind of functionalities that would make the form more efficient.
7. L&D -
In this world of rapidly changing markets and advancing technology. It is an understatement to say that it is necessary to be on your toes at all times. Although you may have a strong L&D department within your organization, it is also important for your outsourcing partner to be up-to-date on the latest technologies.
Choose a partner who invests in regular and comprehensive technical training to upgrade skillsets of resources. Opting for such kind of a partner not only helps you focus more on your core product but also ensures a cutting edge over your competitors.
Besides, the knowledge and skills that they have will often lead to more innovation in the company and more opportunities for completing tasks or activities more efficiently.
Afterall, “Continuous improvement is better than delayed perfection”
While it is necessary to consider the above-mentioned factors for choosing the best-fit partner for your projects. One must also consider that the desirability of each factor would differ based on the project requirement and the engagement models. Choosing a partner who checks of most of these criteria on this list will ensure that you form an effective long-term partnership and reap maximum benefits.