From cutting costs, through improving efficiency and competitive strategy, to focusing on growth and core competencies - these are the benefits of outsourcing. But you'll experience them only after finding the right outsourcing company. Check out a list of 5 aspects you need to consider while choosing an outsourcing partner.
Finding the right outsourcing partner is not as hard as it seems.
We’ve prepared a list of 5 questions that will navigate you through selecting the best fit. And below, there’s of course a bunch of additional tips.
Let’s dive in.
With outsourcing, you benefit from cutting costs, through improving efficiency and competitive strategy, to focusing on growth and core competencies.
There are plenty of companies offering outsourced software development. You can find them in the U.S., South America, and Central/ Eastern Europe. Those companies differ significantly – they come in various sizes – from software boutiques to international monsters hiring thousands of developers.
One thing in common that may also make your choice as a CTO difficult is the offer. In every company it’s probably somewhat similar (including service, experience, terms, and conditions).
The price and your requirements can make a difference.
We’ve gathered some issues that are helpful to choose a partner when it comes to outsourcing. Use them to make a list, narrow your search and pay attention to various parameters.
Let’s start with focusing on what you really need and want.Describe your business NEEDS and read this article to be able to answer the following queries:
When analyzing your company’s situation take into consideration these 7 important things:
If they’re any gaps, you should consider choosing an outsourcing partner.
You have some existing software systems in your portfolio – you’re improving them. You also have a few new applications waiting to be built within next 12 months. Your team is handling some tasks but not all of them.
After analysis, you’re left with 2 gaps: fixing bugs in those future improvements and a need to test new apps that will be developed.
Now, it’s easier for you to identify the support you need, make a decision and start looking for a partner.
Now, knowing which gaps to fill, you have to determine if the gaps are long or short-term.
The most important thing is to get and fulfill the terms and conditions of the contract. The role of the outsourcer here is to determine the resources – they have to know the scope of the project, its duration, and the budget.
Best reached by an outsourcing company! Here you should focus on H2H (Human to Human) approach – your team, the people are crucial. Interviewing candidates in person is a great idea. By doing so, you can get to know their skills, mindset and understand their approach towards your cooperation.
Make sure that they fit into your vision of the project – you’re going to cooperate with them for months or years. They should fit into your internal team in the company and communicate well.
The money you want to spend is a great determiner – the budget narrows the number of potential companies to choose from. However, it's important to note that a smaller budget doesn't necessarily equal low quality. There are different ways to maintain high quality while reducing costs; one is outsourcing to another region. We've written a guide to custom software development rates in other countries which you can access by clicking the link.
In fact, the bigger the amount, the bigger the company.
Do you need just a few devs, a million-dollar outsourcing company, or a mid-sized outsourcing partner?
A small project could be treated less importantly by a huge (expensive) company – you and your client cannot get the attention or time you deserve. On the other hand, your project might be too advanced for a small team of developers whose attention is shared between many other clients.
Choose a partner (within your budget) who’s able to handle your project well, has enough time for consultations, gives you attention, and won’t let you down when it gets serious.
You can choose between onshore and offshore location options. Let’s briefly look at the pros and cons of those types of outsourcing!
+ there’s no culture gap – the team shares the same cultural background
+ if a company has the devs you need at the moment – they’ll start working at once for you
– if the company can’t offer you the skills that you need right now (and imagine the market is tough), they’ll have to find somebody to hire for you and it’ll take time
– the cost – the company will deliver effective results but probably the hourly rate will be higher (they have to make a profit).
+ affordable: it allows for lowering the costs and offers availability
– cultural gaps: different cultures and languages within one team – a probability of misunderstandings
– requires attention: due to time zone and distance, management can be time-consuming.
Learn more about developing teams remotely ie. team augmentation that allows you to build teams on a global scale!
Your business, like the technology and trends, changes constantly. A CTO and his team have to understand the need for learning and upgrading. Try to look for the same values in your outsourcing partner! Remember that learning culture is a way to succeed.
Ask your potential partners about their approach to training and professional development:
You have to legally protect your Intellectual Property when outsourcing.
Do the developers have the rights to their ideas or code?
What are the conditions?
Signing a Non-Disclosure Agreement (NDA) with an outsourcing partner will provide protection. The partner should keep your IP safe, under agreed conditions.
Also, check if the outsourcing company signed NDAs with their employees who may work for you. You have the right to ask the company to show you a sample of their NDA. If you’re not sure about any of the conditions, consult a lawyer.
There’s one important aspect of IP worth considering. It often happens that many companies work simultaneously with clients from the same industry at the same time. There’s a danger that one client’s code (or its fragment) may slip into somebody else’s product. In this case, I recommend creating a special firewall (between teams). To strengthen the protection, it’s also a good idea to create an email in your domain for devs working for you.
Among all the issues we’ve covered above, these are not easy to define. The intangible assets, the company values can mean different things to different chiefs. The easiest explanation is the feeling and feedback you get when working with an outsourced team remotely.
Is the way they speak and write polite and professional enough?
What is the team’s reaction to your new solutions?
How much do you have to wait for their response/reaction?
Any company’s values are always mirrored in employees’ behavior. Remember that they can also be responsible for contacting your clients!
Your motivations, needs, and visions may vary depending on the size of your company and resources.
However, when you implement outsourcing successfully to your business strategy, you can maximize profits and spend less money.
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