Tag Archives: Tips for outsourcing

Pros and Cons of Outsourcing IT and Software services

pros and consSuccess of outsourcing has always been debatable from the day of its existence.  Every business owner who is willing to outsource their software development requirements to IT solution providers in India or any other developing country will always evaluate the pros and cons of outsourcing process.  In today’s aggressive competition businesses face huge cost pressure and outsourcing their IT project management and development requirement becomes a natural option for cost effective operations.

There are several research reports in market which portray more complex picture of outsourcing wherein organizations are not very satisfied with their current contracts or
they are losing confidence in one or other projects. Few of them are considering renegotiating their existing outsourcing contracts or changing the outsourcing partners.

It is really important for business owners to understand the possible pitfalls in outsourcing and how to decide the aces and ploys of outsourcing.

Advantages of Outsourcing:

  • Most important factor which business owners enjoy is the cost efficiency in getting their strategy executed. Lower labour and operation cost makes IT leaders a natural supporter of outsourcing.

  • Business owners can focus on core activities of their business such as making new strategiesCore Competencies to gain new market, sales and marketing activities etc. instead of worrying about their non-core activities.
     
  • Huge reduction in maintaining infrastructure cost and headcount which incurs while maintaining non-core activities.

  • Outsourcing can help you in streamlining the finances and cash-flow in a focused and with well-defined strategy.

  • Turnaround rate of deliverable is topped up with offshore workforce teams and you can align your resources for working on more projects.

  • Outsourcing IT services enables business owners to save money on investments on technology and developers and allows them to spend that amount in hiring resources related to their core functions.

  • Round the clock support and access to workforce for 24/7. It provides flexibility to realign the resources according to needs and help business owners to focus on gaining new clients.

Disadvantages of Outsourcing:

  • The biggest risk in outsourcing is the security of data and information. Lack of proper NDA and other agreements have resulted in leak of information’s and sensitive data.

  • Quality is a major concern and business owner’s end up spending a lot on deliverables which are not up-to the mark. This generally happens when the outsourcing vendor is not experienced or there are no quality processes.

  • At times business owners end up losing control on the operations and deliverables of the outsourced tasks.

  • Lack of defined SLA’s is also one of the main disadvantages of outsourcing. It is always recommended to have detailed SLA’s and cover each and every aspect of business unit to avoid any disappointments at later stages which either can be related to hidden costs or missing features from the deliverable.

  • Putting all the eggs in one basket does increase the risk of outsourcing failures. If you are associated with only one software vendor and that vendor goes bankrupt or due to some policy changes they ask to redefine the agreement, you might not enjoy it.

  • Communication and management of tasks in different time zones is another possible issue which business owners faces when they outsource their software and IT project management services.

  • Trust factor plays important role. It gets worst when business owners noticed lack of transparency from team working on outsourced tasks. It could be due to number of projects offshore team is handling or real experience of resources who are assigned to the projects.

These are only few of the pros and cons of outsourcing software services. Multiple issues may crop up without the clear understanding on projects, objectives etc. Maintaining transparency through project status, regular calls between client and offshore teams are the few main factors which define the outsourcing relationship.

Business owners can easily avoid all these pitfalls by choosing the right offshore partner. It is really important to organizations to review and short-list the solution providers, follow the essential steps for stress-free and successful outsourcing very carefully and align their goals and objectives before giving the contracts.

Top 7 Essential Tips for Successful and Stress-Free Outsourcing

Service Outsourcing has been a valuable strategy from day one of its existence and has played a crucial role in aggressive and structured growth of Software or IT industry across the world. It is very important for developing countries such as India, Ukraine or China to understand that service outsourcing is not only improvising the IT industry, it is also improving the economy and thus it our responsibility that every active participant of this industry should do a good job and make it a successful and stress-free process.

My current article/blog is useful for all those business owners who are looking for a software development companies and have struggled to get quality deliverables and software development companies who are offering their services. Being associated with an IT industry for more than a decade as a client engagement consultant, I’ve seen many outsourcing engagements getting failed on minor and major issues and have seen business owners losing their confidence in outsourcing.

There are certain things which every business owner and service provider should keep in mind before getting into a business engagement to avoid losing the charm of working and learning together. These pointers depict my industry experience and feedbacks which I got from my clients/mentors.

1. Project Deliveries are must: This is most important thing which defines the success of your partnership. Delivering the solution ON TIME and ON BUDGET is what every business owner wants from their solution providers, however delivering the product or solution which meets or better, yet Exceeds client expectation is what service provider has to aim for.

2. Communicate and Communicate: Another most important factor which defines whether your partnership is worth or not. Transparency is a key here and any side which is not communicating may or will result in deliverables which are either not expected or buggy.Communication

• As a service provider, if you notice that deliverable is getting late, let client know as soon as you are aware instead of waiting for the due date or any pre-scheduled meeting.

• As a business owner, if you notice something which needs to fixed, changed or can have an impact on deliverables then let the service provider know to avoid delays.

3. Client is not a Google or Wiki: As a solution provider, if you come across any problem while executing the project (late deliverable, requirements which are not met, etc.), don’t just assume that client will know the solution for it. You have to reach out to client but with few options/solutions that can address them and hopefully fix them.

4. Consistency and Quality Assurance: Missing client reviews, untested solution are big reasons for frustrations. No one likes to see half-cooked solution or waiting for feedbacks or stuff to review.

• As a solution provider, you got to make sure that you are delivering a quality solution each time,consistent and quality not just at the end of a project. Client reviews are must and shall be taken very seriously. A thorough QA is must on each module which goes to client for review and confirm whether solution is as per expectations.

• As a business owner, you should give the honest feedback considering that module as a milestone. If something is missing, you should report that and if any changes are must then you can update the CR’s form.

5. Game of Project Plan: Most projects fail to adhere to the timelines defined in it. Project plan, created by a service providers which includes work break down structure, resources allocated etc. and to make sure that deliverables happen on time. Both business owners and service provider’s needs to make sure that:

• Timelines mentioned in project plan should include time for thorough QA and time to make any fixes as a result of the QA

• Project manager should review the solution, no matter whether a QA member is working on the project or not. PM hours defined in Project plan should cover it.

6. Over Commitment kills: Client is getting mad, team is getting frustrated and hours are increasing like price of petrol. Companies are missing deadlines, tasks which should have taken XX hours are taking XX days. This is another reason outsourcing partnerships don’t work.

• As a service provider, your PM’s should carefully commits on timelines to business owners and commitmentthen should stick to it and get back to the client when they say they will. It is advisable that Project Managers should consult with their teams and understand what client is asking is possible to carry out and if yes then in what time duration.

• As a business owner, you should cross check with project managers on timelines and understand that sometimes it’s not possible to discuss and start all the Change requests on a go.

7. Client is a King: One who pays for the project is always right, provided as a service provider you understand what client needs.
client is king

• No matter what service provider says, result of each activity and tasks has to make client feel that they are your top priority and you are working towards exceeding their expectations.

• Business owners should also understand that they don’t take things for granted. If something has not been addressed by team, try to get the details before thinking otherwise. It’s true that you are paying for team, but few things cannot be purchased and they too are human!

These are very common things and we might come across many of them on daily basis, however if you observer closely they are quite major and important. It’s surprising to see how easily you can remove your stress and make a successful engagement. We just cannot ignore all of them especially when we are one of the active players in outsourcing industry.