One finds many things written on outsourcing these days. We do not claim to have said anything new or outstanding. This article is simply the results of our experiences in executing outsourcing projects, the pitfalls that people face, and what to watch out for. We hope it proves of use to prospective outsourcing clients.
Outsourcing is the ultimate stage in it's evolution branch of work methodology. One of the reasons why outsourcing has turned out to be a green area is because companies are facing a major problem in retaining their employees, who keep leaving with an alarming regularity. Another problem is the short life span of technologies themselves, adding up costs in terms of training and acquiring technologies.
Outsourcing provides a good solution to these problems, and of-late has become a strategic necessity.
Before going in for outsourcing, people commonly ask the following questions :
- When to outsource?
- What to outsource?
- Why outsource?
- Whom to outsource?
A list of common factors affecting decisions on outsourcing :
- Company's own technical competency and area of business.
- Size of the project.
- Cost/benefit analysis (feasibility study).
- Duration of the project.
- Type of project (new development/maintenance project).
- Management of the company, and it's beliefs.
- Availability of local trained manpower.
- Fear of not getting what you want... (problems with getting competent and reliable service providers).
Advantages of outsourcing.
- Reduce cost.
- Save time.
- Save manpower and training expenses as well as time spent in training, not to forget time spent in searching for trainers.
- Manage the project not the team (you get a single point contact for the project).
- You have the whole knowledge base of that company at your disposal, but you pay them only for the number of developers contracted.
Some people/firms vehemently oppose outsourcing.
- Rigid business model of the company:
Some companies have a very rigid pattern of working, and oppose outsourcing, since it is just not done in their company.
- Self interest of the managers:
Managerial compensation being directly proportional to the size of the team and budget they manage.
- Human resource concern:
Job security is a major concern among the local staff.
Points to remember:
Outsourcing is not for everybody, instead of proving beneficial it may bounce back. So if you are new to it, please watch out:
- A good RSD saves the project -
A confused request leads to a confused proposal. Likewise the offshore team's ability to deliver a quality software on time is proportional to the client's ability to write a clear and thorough Requirement Specification Document (RSD).
- Track the progress; make use of DDR
Keep track of what your service provider is really doing. Try to get weekly reports with a fully filled Daily Development Report (DDR).
- Success depends on good management:
The biggest misconception about outsourcing is that offshore projects do not require as much management as their local counterparts. This is very far from the truth. You have to take care of the project right from the beginning till the end.
- Watch out for the trade-off between price and quality:
"Price is directly proportional to quality." This is the biggest mistake that clients make. It helps if you know what you want and at what price. The tradeoff point between price and quality should be carefully chosen.
- Choose the right providers:
A common pitfall is hiring a bunch of streetside developers. Everyone does not have equal capabilities. Verify the competence of the solution provider.
- Idea based projects need careful evaluation
Watch out when you are working on an idea. They may not always be as fruitful as they appear to be on paper
- Avoid shortcuts in your project -
Shortcuts prove to be harmful in the long run.