How to know if an outsourcing partner is right for you?
Bad experiences with an outsourcing partner are often traceable to badly designed selection processes or the use of deficient selection criteria. Whereas, you can find ample guidance online on how to build a robust selection framework, we will share the most important vendor attributes for comparing and contrasting outsourcing companies to ensure you select one right for you.
Sizing a Vendor to Your Project
When optimizing the capabilities of an IT provider to your project, size matters. If your organization can fund nine-figure deals, then the number of companies to field such a deal is not large, whereas for smaller projects you have a lot more choices.
The key is to find a provider of a size that will consider your deal to be a big deal. This significantly increases the odds that your project receives the attention it deserves by having their most talented staff assigned to it. Additionally, right-sizing usually provides meaningful accommodation in contract terms and professional treatment from the executive staff.
The risk of choosing an outsourcing partner that is too small, however, is that they may not have a sufficient level of technical capabilities, skilled staff, certifications or experience to deliver what you hope to accomplish.
Local Presence with Global Delivery
If your company is based in North America, then choose an outsourcing partner whose headquarters are there. They will better understand your industry, business model, goals and processes since you are working within a similar cultural context.
Your company also benefits from local contractual protections should your project hit a serious speed bump. It also provides the distinct possibility that they can provide onsite staff at your site, which improves communication and timely escalation of critical issues.
However, vendors that also provide delivery from offshore will save you money. Furthermore, vendors with a global presence could directly interact with your own global sites and offer the possibility to add shifts in other time zones that work collaboratively with your local staff, which provides you with 24-hours a day of development.
Consistency in Quality and Delivery
Until recently, the majority of IT outsourcing firms sold themselves mainly on cost and based contracts on hourly rates. These days, more companies compete on their ability to produce results. Those results should include both timely delivery and measurably high-quality products or services.
During your due diligence, evaluate the vendor’s past work and pursue references to gauge how well the vendor has delivered on their promises. Have a detailed discussion with their senior staff about how their corporate culture reinforces the importance of on-time delivery and high quality throughout the ranks.
When you are convinced they will deliver what they say they will, it is still prudent to start the relationship with one or more smaller projects of a few months in duration to validate their work and timeliness for yourself.
Well-planned, thorough and frequent communication is critical when using an IT outsourcing partner. This goes double if the company you select has offshore resources, since both time and language may present communication barriers.
How much, when and how you each of you communicates with the other should be driven by the client. Both sides must identify primary contacts for specific areas. These people must have seconds in cases where the primary is unavailable. Daily meetings with program and development managers are not unreasonable as are weekly meetings with BDMs or department managers. To gauge frequency, ask yourself how much time you can afford to lose should a process go astray.
Vendors uncomfortable with your communication plan should raise a red flag with you, since this is such an essential element in your business relationship.
Their Range of Skill Sets
Except for the largest IT organizations, most companies do not have all the personnel with all the right skill sets for every project. When evaluating outsourcing partner’s technical and process capabilities, strike a balance between broad and deep skills that align with your business and project needs.
If you hope for the vendor to work on more than one type of project or you wish to establish a long-term relationship, then one with a broader range of skills may work out better in the long run. A possible drawback is that a project comes along that is a mismatch for the vendor’s skills and quality suffers.
Many enterprises today recognize that one size does not fit all, especially when working with small to mid-size IT outsourcing companies, so they choose to multi-source these services. This can complicate internal management of vendors, but often the point solutions that smaller vendors provide are of higher quality, with faster delivery and at the same or lesser cost.
Proper selection of an IT outsourcing vendor will significantly augment your company’s strategy and operations. Lack of due diligence, however, often leads to negative consequences plus lost time and money.
Use the selection criteria above along with a robust process comparing business requirements against each company’s pros and cons. This will lead to asking the right questions and building a seamless working relationship with a talented development provider.
The Optimus Information model is designed to allocate the right mix of local and offshore resources in order to optimize expertise, speed and cost. We provide the ability for development teams to quickly add specialty skills to a development team without incurring long-term costs.Our successful track record speaks for it’s self, and we love to share past work we’ve done. Our global team is made up of a diverse range of experienced professionals, allowing us to work on complex solutions requiring a wide variety expertise. The result for our customers is the capability to far better manage resource capacities and outcomes.
Contact us if for your next IT project. We’re always happy to help.
(Note: This blog has been updated with new information)