How to Prepare Your Company for Outsourcing: 8 Steps to Creating a Successful Outsourcing Strategy

Creating a successful outsourcing strategy is not easy. Learn the basic steps you should take to prepare your company for the outsourcing project.

What is Software Outsourcing?

Software outsourcing means hiring an outside organization to complete all of the activities of a software development project instead of undertaking them in-house. When a company needs to reach its objectives faster, stay within budget, and build a competitive advantage, it requires a talented IT team to achieve that. Experienced outsourcing providers have the resources, talent, and expertise to build high-quality software. That is why companies worldwide are using this business strategy to grow their business by reducing operating costs and increasing the quality of services.

Benefits of Outsourcing

By choosing the right outsourcing strategy, your business can become more flexible and agile and adapt to the changing market conditions and challenges. The result is cost reduction and quality service, as mentioned above. However, the advantages of outsourcing go far beyond and include:

  • Access to skilled experts
  • Faster delivery
  • Focus on core tasks
  • Increased efficiency and productivity
  • Reduced risk
  • Time-saving

The importance and the benefits that outsourcing offers have become even more evident in the context of the COVID-19. The pandemic has forced many companies to cut costs and prioritize their digital transformation to support their business. The result is an increasing demand for outsourcing. Even businesses who had never considered this kind of service before have turned to it in these difficult times. More and more companies are keen on finding ways to reduce costs and overheads wherever they can. No matter what industry you’re in, outsourcing services can help you find solutions that are right for your business and keep you afloat.

How to Prepare Your Company for Outsourcing

If you’ve already decided to outsource software development, you’re probably wondering how to prepare before launching your collaboration with the service provider. Outsourcing is a business investment, so it is essential to have a clear plan and implementation strategy. You must be well prepared and know what you need before taking the first steps. In this article, we will provide you with some practical steps that you should take to build a successful outsourcing strategy. The steps before starting the project would usually include:

Step 1: Define your goals

For a project to be successful, it is essential to clearly define the business goals you want to achieve through outsourcing. Your remote team needs to see the vision and the purpose of the project. Also, get them involved because there is a lot you can learn from their experience in these initial stages. This will help you determine how you structure and manage the project and ensure that the outsourcing team can meet your needs. Be as specific as possible and make a list of the items you want to outsource and how you want them to handle them.

Step 2: Plan the budget

A carefully planned budget will determine how quickly you can complete the project, the level of skill you’ll hire, and the types of technologies and equipment you can use. The more advanced the technology, the higher the development cost will be. The purpose of planning a development budget is to make sure that you’re prepared for all possible situations. If you don’t know exactly how much of your money is disposable income, it is very easy to let your spending out of control. Also, make sure you have money set aside for hidden costs that are very likely to come across.
An intelligent and structured budget planning will make all the difference to the growth of your business. It will also allow you to have the most productivity and efficiency while keeping overhead costs in check. In that way, your business remains profitable and successful.

Step 3: Document the requirements

Inadequate specification of requirements can lead to failure of the software development. That how important it is. The requirements specification document serves as a map of the product you’ll build and the features you want to include. That document will be used as a reference during software development and set clear targets for the teams. Without it is very unlikely that you will build the right product.

Step 4: Choose the right outsourcing partner

As outsourcing is growing in popularity, especially in the last years, there are many software outsourcing companies on the market. Carefully select and create a list of providers who know your industry and have worked in it before. As a part of the outsourcing strategy, you will need to prepare questions to ask each provider. Thoroughly research the potential candidate’s portfolios, past projects, customer reviews, and referrals. Ensure they have the right technical expertise and IT infrastructure that includes the latest hardware and software components. You should also review their hiring process; discuss the criteria they use to select a team specific to your business objectives and if they facilitate their training.

A trustworthy outsourcing partner with an IT background that meets your organization’s unique technical needs will help you minimize the risks and establish solid ground for the project’s overall success. The right outsourcing partner should be dedicated to helping your company
succeed and grow, so consider all the influence factors before making your final decision.

Step 5: Choose the suitable outsourcing model

The outsourcing model that meets your project’s requirements will depend on its complexity, budget, deadline, and level of involvement. There are three types you can choose from:

  • The project-based model. – With this model, you fully delegate software development to an outsourcing company, from planning to release. After clarifying your complete project requirements, the project managers and business analysts from the outsourced team take full responsibility for forming the development team and the quality and performance of the project.
  • The dedicated team model. – This model provides you with a remote software development team entirely dedicated to your product and business goals. The team will be chosen according to your demands. You can decide if they will report directly to you or assign the service provider’s project manager to coordinate the communication process. With this model, you share the risks and responsibility for the quality of the product.
  • Staff augmentation model. – Staff augmentation or team extension model allows you to hire software development experts at any point of your project’s cycle to fill talent gaps or speed up the delivery. They work remotely as part of your in-house tech team. This outsourcing strategy can be on a short, medium, or long-term basis and gives you more control over your project.

If you need help deciding which outsourcing model covers all your needs, you can always contact Cosmic Development experts and discuss your requirements.

Step 6: Assign roles and responsibilities

Assign management roles and responsibilities early on will ensure that the work will run smoothly. In that way, your in-house and outsourced software developers will know whom they should report to and who needs to be updated about the progress of the projects. That, in turn, will eliminate confusion, create a more transparent workplace, and increases productivity.

Step 7: Establish channels for communication

Uninterrupted communication is vital for the success of a project, and it also requires a plan. Effective communication channels are crucial, especially when you and the outsourcing team don’t share the same physical space, and should be discussed and agreed upon from the start.

Invest in proper communication tools and establish a standard format of communication that will allow you to keep all of the information organized. Use project management tools like Jira and Asana, collaboration tools like Slack and Teams, and messaging platforms like Skype. Email, chat, phone calls are all options. We live in a digital age, and there are countless excellent tools and software available. You have to find out what’s best for your project. Whatever communication channel you choose, make sure it fits your project and helps you successfully operate with a fully remote team.

Step 8: Be flexible

Keep in mind that a talented development team is an expert in their field. Be flexible enough to hear their ideas a creative solution they may offer.

In Summary

We hope we’ve shed some light on the steps you should take to prepare yourself for a successful outsourcing process. By implementing these eight steps, you’ll systematically achieve your goals, you will save time and money, and mitigate risks and improve your project’s delivery.

Thinking of Outsourcing Your Software Development Project?

Suppose you lack the time, resources, and knowledge to build a software development team from the ground up. In that case, you should consider outsourcing software development by teaming up with an experienced software development company.
Cosmic Development is a full-service IT development company with over ten years of experience building digital products and dedicated teams for international companies. We can find the right people to create and implement the digital transformation strategy and turn your business into a digital leader.
We deliver high-quality software at top speed and efficiency. Our solutions and services will enable you to move faster, work better, and stand out in a shifting market. 
Talk to our experts now.

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