There’s no doubt about it: outsourcing software development projects is making digital acceleration accessible to anyone. For the first time in the history of outsourcing (and thanks to the many new technologies that have allowed remote work to become a commonplace practice), any company in the world can get immediate access to the best developers in the market.
That, of course, has brought up a lot of attention to technology adoption, giving birth to what we now know as digital differentiation. In other words, getting an edge over the competition is now all about who has the best tech and the best IT talent at their disposal. This is easy to see when you take into account that the leading companies in every industry are the ones that know their way around the best software solutions.
But you probably know all about that already, which is why you’ve ended up here, at the Best Guide for Outsourcing IT Projects In 2021. So let’s take a walk and dive deeper into how exactly you can outsource your IT project, what parts you could outsource, why or why shouldn’t you do it, and a lot more.
How Do You Outsource an IT Project?
Being a fairly recent industry with just over a decade on its back, business leaders have had all kinds of experiences with outsourcing their IT projects. I’ve heard horror stories about projects that delivered entirely different products than what was requested and inspiring stories about companies that saved a ton of money on development and still got a better solution than what they expected.
All of that begs the question: What did the first group do wrong? What makes or breaks IT outsourcing?
Well, the answer to that question is perhaps simpler than it seems. Unlike what most people may think, outsourcing is not about finding the cheapest solution out there – it’s about getting the most valuable return on your investment. In other words, if you want to do outsourcing right, you need to focus on cost-effectiveness.
The most important step to achieve that is choosing the right vendor. For many, picking the perfect offshore company can be a little tricky, especially given how many there are around the world. Luckily, there are few aspects you can always focus on, including:
- Fluent Communication and Workflow: Fluent communication and workflow is the most critical step to outsourcing. Your Software Outsourcing partner should be perfectly fluent in English or the language of your choice. Also, their work process should match your workflow throughout the development cycle.
- Standardized Security Protocols: In an increasingly tech-driven world, cybersecurity is more important than ever. Make sure the IT company of your choice has up-to-date security protocols for keeping all data and software products safe.
- Top Talent Software Engineers: Software development outsourcing gives you access to world-class IT talent. It’s the job of an outsourcing company to gather the best software developers from the region and use their talent to build the best possible product for you.
- Quality Experience: Always check references, past clients, and completed projects of your potential IT partner. This information will give you some insight into the IT company’s performance, workflow style, and quality of software products.
- Full Range of Services: What you need today might not be what you need tomorrow. The best outsourcing companies specialize in a wide range of fields to handle your project from a holistic and highly-experienced approach.
What Parts of the Project Should Be Outsourced?
This is a great question (and one that always has a different answer). The beautiful thing about outsourcing IT solutions is that you can outsource literally as much of the project as you want. Some companies outsource the work of a single engineer who can help patch a vulnerability in a couple of weeks, others hire a team of System Architects to redefine and optimize their IT infrastructure, and there are even those who simply outsource the entire thing to a third party and take all the weight off their shoulders.
But that doesn’t really answer the question, does it? If you’re wondering what parts of your project should be outsourced, I’m afraid I can’t give you an exact answer. I don’t know what your project is about! But what I can do is tell you exactly how the most common types of outsourcing work, and then you can hit the ballpark of what types of services you’ll be needing before you sign anything.
So, without further ado, let’s take a look at the three main types of IT outsourcing there are: Delivery Teams, Staff Augmentation, and Project-Based Outsourcing. Read our article on the 9 types of IT projects to outsource.
Delivery Teams
Delivery Teams are perhaps the most common form of IT outsourcing today. Simply put, a Delivery Team is an autonomous group of engineers that works in parallel with the client’s in-house team. If you choose to work with a top software development company, you’re likely to get a tailored-fit team in just a few days.
Delivery Teams are an ideal choice for companies who are looking to develop high-quality software but don’t have the infrastructure or talent available to do so. This makes it easier for businesses to jumpstart their projects in a flash and start freeing up internal resources by transferring workloads to their development partners.
Staff Augmentation
If you already have an established IT or software development department within your company, then IT Staff Augmentation might be exactly what you’re looking for. This service provides an “Extended Team” that works as part of your local team—and I mean that. Extended Teams will attend daily meetings, report directly to your company’s managers, and do anything else that the in-house engineers do to get things moving.
Staff Augmentation is the perfect choice for companies that need a rapid integration of outstanding software engineers into their team. This way, you can immediately find the right fit for hard-to-fill or temporary positions, which boosts the scalability and efficiency of project development. And, of course, you’ll be bypassing everything related to sourcing, recruiting, and retaining talented software engineers.
Project-Based Outsourcing
Project-Based Outsourcing or PBO is what most people understand as good, old plain software outsourcing. PBO is a full-cycle process in which the software services vendor takes care of everything related to software development from start to finish. You, as the client, only need to come up with what you want to get done and provide feedback as the project progresses.
This model gives you immediate access to the resources necessary to execute complex and time-sensitive projects without the need to have any onboard IT talent. Nonetheless, remember that it’s always better to have a clearly defined project scope (or at least a solid idea of what you want to achieve and how you are going to measure it) so that the end product turns out to be what you actually wanted. Your software outsourcing partner will also provide consultancy on project management, choice of the technology stack, and any other area from the client’s end that requires support.
What Are the Key Benefits of Outsourcing It Projects?
By delegating IT tasks to external service providers, companies can focus on core business activities while leveraging the expertise and advanced technology offered by specialists. Below are the key benefits of outsourcing IT projects.
Streamlined Budget Management
Outsourcing transforms fixed IT costs into variable costs, allowing for effective budget management. Companies save on expenses related to hiring and training IT staff, infrastructure, and technology upgrades.
Expertise and Specialized Skills
Outsourcing opens doors to a global pool of skilled IT professionals. It provides access to specialized expertise that might be scarce or too costly to develop in-house, ensuring high-quality project outcomes.
Enhanced Business Efficiency
Companies can concentrate on their core competencies without being sidetracked by complex IT decisions. This focus drives business growth and enhances overall efficiency.
Risk Mitigation
Outsourcing IT projects means sharing associated risks with the service provider, especially in areas like compliance and security. Providers are better equipped to handle these risks due to their industry-specific knowledge.
Adapting to Market Changes
Outsourced IT services offer scalability, allowing companies to easily adapt to market demands and changes. This flexibility is critical for businesses looking to expand or explore new markets.
Staying Ahead with Latest Trends
Outsourcing partners often have access to the latest technologies and can implement new solutions quickly and efficiently. This access ensures that businesses stay ahead of technological trends without significant investments.
Improved Service Quality
Outsourcing companies strive to maintain high standards of service delivery to remain competitive. This commitment often translates into improved project execution and output quality for their clients.
When To Outsource Software Development Projects?
There are many situations in which offshoring becomes the most viable option. Here are some of the most common ones.
- When you lack in-house IT Talent: Top talented offshore developers are scarce on a global scale. IT Companies work with remote methodologies to overcome this challenge.
- When you need to fill specialized roles: Many projects require either super-specialized technical roles or temporary positions that aren’t attractive for top talented developers.
- When you’re dealing with complex projects: Tackling a complex project requires a lot of know-how and technical expertise. Without those, it’s easy to run into speed bumps and accumulate downtime.
- When you are working on tight deadlines: Getting the right results at the right time can be the difference between success and failure. Offshore developers scale your capabilities when needed.
- When you need expert support and consulting: Software outsourcing companies provide consulting and support solutions for existing or ongoing projects that have fallen off the tracks.
- When you want to maximize cost-efficiency: IT development companies completely eliminate the costs of hiring in-house staff while providing the same or better benefits.
What Should Be Practiced for Best Outsourcing?
As with most things in life, the better prepared you are to start your outsourcing journey, the better results you will be able to achieve. Most of the time, practicing these five things will get you on your way towards a smooth and value-driven outsourcing experience.
- Have clear goals: As we all know, outsourcing services make it easier for your company to reach its goals. However, you are the one in charge of setting the goals your outsourcing partner needs to achieve. That’s why having a clear idea of what you’re aiming for and the results you expect in a given time frame are both so important to developing a custom technology solution that matches your needs.
- Set your priorities straight: While it is true that your outsourcing partner will help you build a detailed roadmap of your project, you’ll be the one to provide feedback on what is getting done and what needs to get done. As such, you’ll need to clearly state what matters most for your company and your clients. So keep your priorities straight and participate as much as possible throughout development.
- Paint a clear picture: Today, bringing an idea to the table is rarely enough to build a successful software solution. You need to describe an experience and paint a clear picture of it so that your software development partner can make it into the real thing. The clearer the picture, the faster your project will come out of the wireframing and sketching stage.
- List all of your needs: The tech stack of your company is most likely very particular in its needs. And your project, just like any other, will require a team of engineers that are well versed in that very same tech stack and in your industry. Make a list of what you’ll need from your IT partner and ask about the different service models and technologies they can offer to get a feel of how they could fit in your project.
- Use a defined project management methodology: Implement a specific methodology like Agile or Scrum to align work processes, ensure timely delivery, and facilitate better coordination and understanding between your team and the outsourcing partner. This structured approach aids in effective project execution and control.
- Put everything on paper: Service Level Agreements are the lifeblood of outsourcing contracts. If you want to include accountability in your project (and you should), always put everything on paper. Having proper documentation speeds up any process and makes everything much more transparent. Your outsourced team will help you choose the best solution to achieve your goals on time and cost-efficiently.
A Quick Recap on This Definitive Guide to Software Project Outsourcing
Outsourcing is driving value for businesses of all sizes and from everywhere in the world. I hope this article was helpful to you. And remember, if you have any further questions, my colleagues at BairesDev are always happy to help. Let’s finish this guide with a recap of the most important aspects of outsourcing IT projects in 2021.
- Define the objective: If you want your project to be successful, you’ll need a clear statement of exactly what you’re trying to achieve and what you’ll be requiring from your software outsourcing partner. Outlining expected deliverables within the contract timeframe is a must.
- Choose your partner wisely: Not all software outsourcing companies are the same. It is always better to go with an experienced partner that has a proven track record developing software similar to what you’re trying to achieve. Always check references!
- Understand the different service models: Outsourcing is a fully-customizable service, so you’ll always get the best deal on what you need. However, learning the differences between the three main outsourcing models (Dedicated Teams, Staff Augmentation, and Project-Based Outsourcing) will get you ahead on the process.
- Prioritize value, not cost: The days when outsourcing was all about getting the cheapest solution possible are gone. Now, businesses from all over the world outsource software services to access a global talent pool of expert developers who can build high-quality products cost-effectively.
- Communicate constantly: Communication is key in every software development project. Make sure you have established communication channels and protocols with your outsourcing provider. Keeping a constant feedback loop throughout development is highly beneficial for both parties.
- Ask questions: As the client, you need to ask as many questions as you need to understand exactly what your software outsourcing partner is offering and how it will benefit your goals. All of your doubts and concerns must be addressed in the Service Level Agreement.
- Demand Cybersecurity: Cybersecurity is more important than ever. No matter what kind of software you’re looking to outsource, make sure that your partner can comply with all the cybersecurity requirements that apply.
- Put it all on paper: As you know, your contract with the software provider will determine everything related to the outsourcing project. This includes all of the relevant documents for the process, such as the Service Level Agreement, the Software Requirements and Specifications, the Key Performance Indicators, and a Non-Disclosure Agreement if necessary.
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