3 Ways To Make Outsourcing Work

You might have been taking your morning shower or having your lunch when this brilliant idea about a software product hit you and you had your eureka moment. You know it’s a great concept for your company’s next product, but you don’t have enough technical skill, time, or maybe your development team is already busy supporting your existing products.

What do you do?

You decide to outsource your software development – great idea!

There are three crucial factors that need to be considered in order to make your outsourcing successful.

Starting with fixed price

If you are newly outsourcing your software development needs, it might be a daunting task to budget and sign a time based contract. In such circumstances, it’s always appealing to choose a model that will be more predictable.

A fixed price model covers your risks to make sure you have a well measured start off. It is always a good plan to begin your outsource software development with a small, non-critical project, that doesn’t affect your core business. The fixed price model provides you with cost coverage as any uncertainty on the final cost of the project exceeding initial estimates shifts to the seller. And let’s not forget, since the requirements and the estimation (cost & time) are already agreed upon, it’s comparatively easy for you to prepare budget for the project while knowing what to expect when the delivery of the final product is made.

After a certain period of time in the project, when you have gained a better insight, you would be able to foresee which pricing model would be suitable for you in the long run.

But why?

Why would you want to switch from a fixed price model, where you have the benefit of predictability, to any other type of model?

Here are some reasons why:

  • After a certain point of time, when the complexity of your project increases, you may find that fixed price model doesn’t serve your purposes.
  • The provider may finish the requirements in the contract at a much lower cost than the estimate, in such scenarios, you won’t benefit from it as the provider doesn’t necessarily need to forward the benefit of the same to you.
  • You lose the flexibility as you won’t be able to change your requirements once the project starts. This closes any possibility of improvement in the product based on feedback from potential buyers/users, market changes or ideas brought in by the development team itself.

Choosing suitable partner for the long run

One of the critical elements you should consider while outsourcing your development requirements is, choosing a competent partner who would be capable of providing you with long term support.

Many people/organisation do not realize the importance of having a long term partnership thinking that once the final product is delivered by the outsourced team of developers, they’ll get their own internal team to take over the product.

Now you must be thinking “what’s wrong in getting my own team to take over?”.

Here is why.

As you would have already invested your time, money and knowledge in the outsourcing team for the project, it would be a better choice for continuity and cost management to continue with your existing outsourced team for support. They would be already intimately familiar with the product as they are the one who have developed it and the technology used for the same.

The project manager

The idea of emailing the specification to your outsourced development team and going about your daily business, with only few sporadic status checks until the final product is delivered to you is very alluring.

Alas, the reality doesn’t concur with the idea.

Like any other in-house team of developers, your outsourced development team, or as we at Congruent call it, your ‘Virtual Team’, will have various queries that would require you to answer pertaining requirement details, review & test the progress and setting up tasks for the next development stage. This usually consumes few hours from your everyday schedule.

It’s imperative to consider designating a person to manage the project, s/he could be either from your existing staff or newly hired. It is a prerequisite, especially when you are working with a larger outsourced development team. The project manager serves as liaison between you and your team of developers.


Tags: Outsourcing, Outsourcing Software Development, Software Development
previous post: How an onsite-offshore model works for Software Product Development next post: Why expecting huge cost savings from offshoring at the beginning might not work