Why Should You Outsource – Even When You Don’t Need It?

Cygnet Infotech LLC
  • Date Published
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“Just like software development itself, managing outsourcing requires a proper methodology to ensure that the offshore technology partner matches your need to deliver on time and budget.”

“Do what you do best, and outsource the rest.” – Peter Drucker

Chances are you are not outsourcing yet!

It’s for nothing that global IT Outsourcing generated 52.9% revenue of the total outsourcing industry’s revenue.

Home or Abroad, the herd Instinct took over after “Make America Great Again”! We witnessed an erosion of trust placed on premium Indian companies. What fails to meet the eye is that new age outsourcing is more about innovation and outsourcing “certain” capabilities rather than merely doing things cheaply.

Shape Up With Outsourcing

Do you lack skilled developers who possess specialized skills or are they hard to find and very expensive in your country? What and how much to outsource to other countries is one of the most important choices a company can make. While most companies outsource  to save money, according to Deloitte Global Outsourcing Survey, outsourcing will grow even stronger to witness growth across mature functions, including IT, human resources and finance to deliver transformational benefits.

Who Should Outsource – Startups, SMBs or Enterprises?

Startup ISVs juggle time and resources and are reluctant to create formal structure and fixed overheads. Outsourcing enables them to focus on their core product or service, while offering scalability to react quickly to business opportunities. Similarly, SMBs are restrained through a lack of resources, intellectual capital, and expertise. They can tap into outsourcing for timely resources and a range of other expertise for scalability based on business requirements.

While sky is the limit for Enterprises, a timely Go-to-market is their cash cow, it makes sense to look beyond their in-house team of developers, to access best intellectual capital, build new product development, reengineer them or for international expansion.

Easier said than done, you just can’t tinker with outsourcing, you must justify because it comes with its pitfalls and risks. Still toying with the idea whether it’s a trickle or a flood? Dig in for more reasons.

How to Manage Outsourcing

Just like software development itself, managing outsourcing requires a proper methodology to ensure that the offshore technology partner matches your need to deliver on time and budget.

  • Regular engagement with your offshore team
  • Communicate, Communicate, Communicate
  • Empathetic towards National Culture

It all makes sense – Decisions and Decisions!

“Ask the right questions if you’re going to find the right answers.” – Vanessa Redgrave

Preliminary survey to list the potential partners

What is your priority in outsourcing the project? Are you looking to cut costs or enable more focus on core business? Do you give more weight to the cost or faster GTM launch?

Concentrate on time zone, specialization and vendor size, their expertise and experience in similar projects, their technology stack and procedures, the framework of managing product developments, and general company background. The focus all along is to eventually zero down to three-four vendors.

Have an eye for details

Assess key areas like time zone, the number of employees, the average years of work experience, the average length of time with the company and communication skills. Does the vendor have a project manager based in US, Australia or Europe to help in better co-ordination early-on?

Work on a Small, Paid Test Project with Your Shortlist

Prototype – to trust your instincts and analyze logically with exposure of professional accountability and competence of the offshore vendor company.

Which Outsourcing Engagement Model Is Right For You?

As a strategic partnership, your outsourcing engagement model determines the level of control and responsibility as also provide the base for further collaboration. The key however is to identify which works best in your context:

  • Offshore Project Model-Time bound engagement model is preferred choice for reducing production cost and faster time-to-market.
  • Dedicated Team Model – Instantly scalable and can be increased or scaled down based on the requirement of the project.
  • Staff Augmentation Model – Best recommended if you possess solid product knowledge and know how to lead and manage developers.

Coming full circle?

Though Nearshoring primarily is emerging as a preferred choice driven by factors like cost savings, quality and stability of the workforce and geographic proximity, RIGHT Outsourcing STILL rules the roost.