The Complete Guide for Outsourcing IT Projects

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By: Julia Nasy
16 Aug. 2023
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Today, outsourcing software development projects is an effective way for companies of all sizes to compete successfully in the market, even without a large internal talent pool. Clients get access to top-notch and quality services from world-class IT talent within deadlines and project budgets. However, there are always a couple of nuances that can affect your partnership with an outsourced team.

This complete guide includes valuable insights and practical tips to assist you in preparing for your outsourcing journey. Below you’ll find an answer to the question of how to manage an outsourced project and reach your goals.

Why Outsource Software Development Projects?

Despite the popularity of outsourcing services over the past few years, not all companies have embraced this approach, as they do not know the benefits and almost limitless possibilities it offers. First, internal IT departments could be expensive and problematic. While hiring additional team members may seem like a viable option initially, it can also become a long-term liability. With IT projects outsourcing, you pay for only the services you need and when you need them.

And nothing tells you more about the value of project outsourcing than its benefits.

Gain Access to a Huge Talent Pool

Software project outsourcing, first and foremost, provides access to world-class talent. Since more companies turn to outsourcing services, the market of high-skilled developers is growing exponentially. Even with an incredible internal team, a brand-new technology may pose a challenge for your business if none have experience with it. Collaborating with the right outsourced software development agency eliminates such problems, as its specialists always stay updated with the latest technology trends.

Increase Flexibility

Software outsourcing companies ensure flexibility and adaptability to unforeseen issues throughout development. Clients can adjust the size of a team according to the complexity and number of ongoing projects. For example, you can always bring additional developers when required, especially for seasonal or cyclical operations. And in this way, you relieve the load from the in-house team while keeping your projects on track.

Reduce Costs

For some projects, hiring developers for the internal team could be costly. Cooperation with an outsourcing company enables you to avoid unnecessary investment in onboarding, training, equipment and infrastructure. Even bigger savings can be made by outsourcing software projects in more affordable regions such as Eastern Europe.

Stay Focused on Core Business Tasks

Outsourcing can help you stay focused on your core business without being distracted by complex projects, software development, or technical support. Patching up weak areas of your team with outsourced developers allows on-site staff to dedicate more time and resources to your business goals. As a result, concentration on core responsibilities improves productivity and efficiency in business operations.

Increase Software Security

Outsourcing IT projects to a specialized service provider can increase the level of security and protect your business from various cyber threats. Maintaining the security of a company’s data requires continuous monitoring and ongoing financial support, but not all businesses have the capital to invest in their cybersecurity infrastructure. With a software outsourcing company, you can leverage their security expertise and access advanced technologies. This enables you to significantly enhance your overall security, protect sensitive data, and minimize potential risks.

Related reading: IT Project Outsourcing

When Should You Outsource IT Services?

Cooperating with an outsourcing partner can be a challenging decision for any business. However, there are obvious signs suggesting when it’s time to consider outsourcing software development.

  • Lack of resources. Too many tasks can distract from core functions and overwhelm your team. By delegating some projects to a third-party team, you can easily increase overall speed.
  • Hiring difficulties. If you spend months looking for a candidate with the necessary expertise, this is a clear sign that you need to broaden your search and involve an IT partner. Software outsourcing companies have a large recruitment team and a massive talent base.
  • Failed deadlines. Meeting deadlines is key to success in every IT project. When your employees feel overwhelmed and frequently postpone, additional staff might be the solution you seek. Outsourced developers can work on tight deadlines, preventing delays and maintaining project schedules.
  • Lack of technical knowledge. When your team doesn’t have the required skill set for a new project, outsourcing is a simpler option than hiring new employees. With a software development partner, the lack of technical expertise within your internal team is no longer a problem. Outsourcing companies provide the necessary knowledge to develop any complex project.
  • Need for consulting services. If your task is stalled, you need a consultation and expert support. In this case, you should apply to an experienced outsourcing partner to find solutions for ongoing projects that are off course.

Best Practices for IT Projects Outsourcing

The results of a partnership with a software development company largely depend on your approach. Below are a few practices to help you build your outsourcing strategy and achieve better results.

Have Clear Goals

Both the client and the partner should have a clear understanding of the project objectives, expected deliverables, and benefits for both sides. This is a crucial component of effective cooperation that ensures the interest and unity of all participants. Project managers, team leaders, and software developers must have a shared vision of all development processes. Team members should clearly know their responsibilities and project timelines. And only then can you and your outsourcing partner develop custom software that matches your needs.

Choose the Right Partner

The most important aspect of project outsourcing is choosing the right vendor. And as practice shows, the best supplier is one that is fully aligned with your business goals and culture. Initial outsourcing market research can prevent future troubles. Having decided on the most perspective partners, compare their services, benefits, values, technology stack, pricing models, and approaches. This will help to have a clearer idea of outsourcing providers.

To ensure you choose the right outsourcing vendor, also focus on the following points.

Communication skills. Clear communication is paramount. If you consider a foreign outsourced company, think about the possible language barrier. Your potential partner should be fluent in English or any other language you choose.

Relevant experience. Seek companies with an experience in software solutions similar to yours. Check their portfolios and case studies to see how successfully they have delivered projects in your industry or with comparable technologies.

Security. Make sure that company has up-to-date security protocols and conducts security audits regularly to protect your sensitive data and prevent data leaks.

Technical expertise. Evaluate the technical skills of the development team. Check if their engineers have the required expertise in the programming languages, frameworks, and tools that your project requires.

Proven track record. Consider the market reputation of a potential partner. It is also important not to limit yourself to studying reviews only on company websites. Check what former and current clients say on such ratings platforms as Clutch.

Choose the Right Model for Project Outsourcing

There is no right or wrong IT outsourcing model. Choosing a model of cooperation depends on your project scope, objectives, and team structure. That’s why selecting the partner that aligns best with your specific business needs is crucial. Outsourcing companies often offer the following three models of cooperation.

Extended team. This service model will be a good option if you need to expand your in-house team with additional engineers with specific technical expertise. Additional staff integrates with your development processes and communicates with other involved specialists. By choosing an outstaffing model, you get full control over daily processes. Task assignment and progress tracking will also be on your side. Staff augmentation is highly flexible but requires a longer recruitment process involving your participation in candidates’ interviews and evaluations.

Managed team. Choose this model when you need to delegate project development to a separate team integrated into your internal processes. Team members are picked up in accordance with project requirements. Your outsourcing partner will also assign a dedicated project manager to track day-to-day operations, monitor performance, and ensure effective collaboration between engineers. Managed teams require less involvement from your side, as they work as separate units. And furthermore, forming a team takes less time because you deliver the hiring process to your partner. This model is an optimal option for long-term partnerships and has a high percentage of employee retention.

Project-based outsourcing. In this model, an outsourcing company takes full responsibility for project management. As the client, you only need to set your priorities straight in the beginning and provide feedback regularly throughout the development progress. Minimal control from your side can be a significant advantage, as it frees up your time, which can be used to focus on core tasks. This outsourcing model is the best option when:

  • your IT project is not your main product;
  • you know exactly what you want;
  • you need fast and efficient custom solution development with minimal involvement.

Establish Clear Lines of Communication

Communication is central to ensuring teams’ effectiveness. There should be constant communication at all levels. Both sides must have all the necessary information when they need it. Be sure to provide members of the outsourced team access to resources such as your company’s policies and internal processes. It will help software developers do their job effectively. Outsourcing service provider, in turn, has to report regularly on the progress. And clear lines of communication can help to avoid potential miscommunication between participants of the development process.

Focus on Value, not Cost

Although project outsourcing is cost-effective, don’t consider it as a cheap and easy way to offload your in-house team. Today, outsourcing services primarily provide access to a large talent pool of highly-skilled software developers who can build quality products and optimize costs. And company rates often reflect the skills, experience, and performance quality of its engineers. Prioritize business partners who will bring more value to your software development project than companies with low rates.

Related reading: How Much Does It Cost to Develop an IoT App

Manage Post-Development Maintenance

Post-development support is an important stage of the software development lifecycle. It involves bug fixing, enhancements, updates, and overall system maintenance to ensure the product remains functional, secure, and up-to-date. However, for this, you need to clearly define maintenance expectations before starting the development process. Outsourcing partners should be responsible for testing and quality assurance, performance optimization, regular backups, and continual improvement. The duration of post-development support varies depending on project complexity and requirements. You also need to clarify this point before work begins.

Summary

As in any other business process, the way to a successful project outsourcing can be challenging. However, with the right strategy, you can ensure that outsourced software projects not only achieve their objectives but also bring significant benefits to your organization. Unfortunately, no universal formula exists, but the abovementioned practices will help you minimize the risks.

By selecting the right outsourcing partner, defining clear requirements, and maintaining effective communication throughout business processes, you can overcome challenges and create a successful collaboration that delivers high-quality results on time and within your budget. As a client, you also need to continuously monitor the progress and make necessary adjustments along the way. As a result, it will contribute to a smooth outsourcing experience. Ultimately, proficiently managed outsourcing can result in heightened efficiency and a competitive edge in the market.

By: Julia Nasy
16 Aug. 2023
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