7 Tips for Outsourcing Work to Drive Growth
Today, outsourcing is a part of business, and avoiding it is futile. Here we discussed what impact this type of business management brings to development. Having processed the information, we have highlighted seven main tips on using outsourcing for business growth.
Who Invented Outsourcing And Why Do You Need It?
Outsourcing is a brilliant phenomenon of the digital transformation of the 21st century. We can categorize it as a strategic solution for businesses, no matter what field they operate in.
With outsourcing, it is now possible to delegate some tasks that are not critical for business development to a third-party contractor. Moreover, third-party outsourcing contractors always specialize in a particular area and have more experience and skills to perform than within the customer’s company.
Thanks to the rapid development of technology, companies can outsource not only accountancy matters but many others.
Outsourcing Popularity is Growing Strongly
There are several reasons why outsourcing has become so popular, especially among small and medium-sized business owners. The most important ones are listed below:
Competent expertise and consulting
The option of turning to specialized outsourcing companies allows you to get qualified expert help. Thus, it is their responsibility, not yours, to find and verify the right experts who can do the job.
Nowadays, the most widespread spheres of outsourcing consulting are business management, taxes, audit, accounting, personnel management, legal services.
Since outsourcing firms specialize in helping other types of business, they acquire practical experience in various spheres, together with means of handling, effective schemes of cooperation, and ready solutions.
IT consulting has become very popular because not every company can afford to maintain its development department. Besides, not all types of businesses need daily maintenance. Nevertheless, the services of IT specialists are in high demand all over the world, and outsourcing allows you to find decent performers for any budget.
Scaling businesses and startups
As mentioned above, outsourcing is a unique model of business arrangement by hiring intellectual, human and technological capacities for a specific time for a certain fee. It means that almost any business idea is feasible through careful and competent planning:
Growth is possible in all sizes and geographies thanks to cooperation with third-party profile companies.
Access to new technologies
Companies are interested in providing their service to you. The competition is growing, which means they need to stand out, often by introducing and leveraging new technologies.
Outsourcing software development capabilities make it possible to launch a business, software product quickly, or service, as part of the necessary capacity has already been formed by other companies whose services you purchase.
While outsourcing has become available in almost every business service industry, software development is experiencing its brightest dawn. During its early stages, software development outsourcing has become indispensable for business or transformed into a digital environment.
Which Countries Are The Largest Providers Of Outsourced Software Development
When choosing a country to outsource software development, you better consider the following factors: low costs, a highly developed IT market, high-quality educational infrastructure, and the ability to communicate using the preferred language. Time zones and cultural differences should be taken into account when choosing a suitable country for outsourcing.
Nowadays, the top countries where many American and European projects go are India and Ukraine. One may think, what can unite two different countries in the IT-sphere?
The first has a low communication barrier – India is the second-largest English-speaking country in the world. Ukraine cannot boast of high English language proficiency, but the community of programmers often consists of people with higher education, which implies knowledge of a second language. Most of the time, this is either English or German.
Indian education is very heavily related to mathematics, so the many Indian IT professionals may not come as a surprise. At the same time, it is interesting that the most significant number of C++ programmers worldwide reside in Ukraine.
Another reason to outsource software development to Ukraine, Bulgaria, Romania or India is the sheer cost of software engineers. The wages of Silicon Valley specialists are high, but their counterparts in other regions of the world must reach their level of quality before presenting themselves as a more cost-efficient choice.
Outsourcing Tips On How To Grow Business
Plan your budget
Before you plan your budget, think about why you’re going to use an outsourcing company.
If you’re choosing this method for the sole purpose of saving money, that’s one conversation. If you are using third-party services for the growth and development of your own business - that’s another conversation, which means different budget planning.
Remember, software development costs as much as you pay for it. If you want to maximize savings, do not expect the performer to be interested in a productive result. Pay for the work decently, and you are already saving by outsourcing.
Outsourcing is not always cheap, but it is beneficial. Here it is necessary to understand each case.
Negotiate an explicit agreement
Outsourcing as a principle of doing business can be very profitable if set up correctly. To avoid certain risks and difficulties in the further work process, it would help if you included a detailed contract.
The most dangerous risk for effective outsourcing is the gradual blurring of the boundaries between the rights and obligations of the client and the outsourcing service provider.
Write down the cost of each completed job, stipulate the necessity of monitoring and controlling the process in the course of execution, what goals you are pursuing, what the final result should be, etc. If the provider fails at the agreed services, there should be a penalty reflected in the contract.
The cooperation between the client and the supplier will be successful only if both parties get the desired positive results from working together.
Establish a workflow
The foundation of successful cooperation will always be well-established management of your own company and a well-established interaction algorithm with the service providers.
Please pay attention to how the team works, what principle of interaction they choose, whether the team is ready to work according to the principle of Agile. Create a productive workflow, do not be intimidated by flexibility in some issues.
If you order software development outsourcing, don’t eagerly expect a contractor to operate entirely standalone. Only thoughtful interaction and reliable first-hand information will ensure a well-coordinated work process and a high-end result.
Any disagreements can be leveled out through close negotiations so that the client and the service provider are satisfied with the cooperation.
To make the negotiation process more organized, it would help if you defined the terms of the contract with utmost clarity. Without the bounding nature of a specific time frame, the negotiations could prolong endlessly. Close cooperation combined with effective management and trust usually results in outsourcing success.
Get a non-disclosure agreement
When concluding any deals, it is necessary to prepare all legal documents that will regulate the rights and obligations of all parties. The client needs to be thoroughly prepared to avoid problems with the law in the future.
In general, it is advisable to interview to have an idea of who you work with, and then sign several different papers:
- Master service agreement
- Out staff agreement
- Valuable assets
- Milestones and prices
- Time and material
- Non-disclosure agreement
Why is a non-disclosure agreement so important? It is a standard procedure when concluding cooperation with IT companies involved in developing your product. This contract fixes what exactly is the confidential information given by the customer to further operations. It also specifies what exactly is a violation and what penalties are imposed. In essence, this document aims to preserve the integrity of customer’s information.
Study the service provider
If you aim at bringing a product to market with the help of an outsourcing company, you must trust it. It is essential to take your time in choosing a partner. Don’t grab for companies that offer a too wide range of services; they may be unprofessional. Give preference to companies of narrow specialization, which already have an established software team to create your product.
Medium and small outsourcing companies are advantageous due to the flexibility of interaction with customers; they are not overburdened with bureaucratic procedures, as large companies are.
The reputation of the company in the service market is also essential. Carefully examine the reviews and recommendations of partners or acquaintances who have used similar services, if any.
In addition, you can check the company on LinkedIn. Study whether it is on that social network, how many employees and subscribers are there, and what they do. The work of the outsourcing company should be transparent and reliable, with feedback at any stage, with access to portfolios and former clients.
Secure your system and data in advance
Often, customers tend to forget about their cybersecurity when they decide to delegate tasks to an outsourcing company. With the pandemic, the number of cyberattacks has increased, which is why it’s so important to pay proper attention to this issue.
While startups are just beginning to adjust to the new routine, trying to build their processes in the most efficient way possible, cybercriminals’ adaptation to it has already been completed.
The principles of organizing remote work must apply to both the customer and the executing company.
- One of them is Zero Trust: every remote device is potentially compromised, which means that you should avoid giving remote devices full access to corporate networks and instead only use an isolated segment or subnet. You don’t have to provide all users with access to everything; you only have to provide them with the services that they will need to perform the necessary business processes.
- The security of the actual appliances matters, and therefore, it is best if you implemented a two-layer authentication as security. Use strong firewalls and passwords, and don’t skimp on identity and access management software.
- Choose only reliable software for secure corporate use.
- Remember that hacks are often done through email. Carefully examine any links in emails you click.
- Avoid weak passwords such as qwerty, 1234, qazwsx, Password, etc., and using the same passwords for everything, including company infrastructure.
- Use cryptographic protection, update software and the operating system on time.
Define your goals and objectives
If the customer constantly changes tasks and requires a lot of adjustments, if there are sudden requests - your programmers rush between jobs, therefore increasing the time frame and budget, and the final result may not be functional. To avoid this situation, you must make a clear plan.
For the executor of the project not to have any complaints, it is necessary to create clear and understandable terms of reference, give the fullest possible information, and participate in the development process.
It is essential to learn that a clear indication of the work plan, the goal, the necessary result, and detailed terms of reference are required primarily for the customer. They are the ones interested in the final result and will have to pay for it, whatever it may be.
- Formulate the reason, the purpose, the requirements for performance.
- Describe precisely what you want to achieve in detail.
- Provide examples.
- Control the process, but remember to leave space for creativity.
- Include illustrations, infographics, screenshots in the end.
- Indicate the scope of work in measurable units: man-hours, amount of finished material or service performed, etc.
Some statistics about IT outsourced software development
Software outsourcing reduces company expenses by 30-60%, not because of its low cost but due to optimizing costs and increasing business flexibility.
It turns out that more than a third (37%) of all small businesses outsource at least one business process, and almost all companies plan to outsource activities in 2021. This statistic is an essential indicator of the growing dependence on outsourcing.
IT outsourcing services are used by such giants as Google, WhatsApp, Microsoft, Alibaba, Nike, GitHub, and others.
The IT outsourcing market is growing at an average of 5% annually and will increase to 8% by 2027 by the most light-hearted forecasts.
Outsourcing in the IT sector generates a crazy profit, reaching more than 400 million dollars. In the United States alone, IT outsourcing has generated almost $130 million in profits this year.
Outsourcing allows specialists from countries such as the Philippines, India, China, Bulgaria, Ukraine, and Poland to earn and provide for themselves, while giving the client a competitive edge.
The IT outsourcing industry has been less affected by the coronavirus pandemic than others. Ukraine and Bulgaria have been of the top countries of competent IT outsourcing providers for several years in a row. The most popular IT product for outsourcing is mobile application development, which continues to grow and develop.
From all of the above, it is possible to conclude that outsourcing is an excellent opportunity to build up a business. It counts for large corporations and beginning entrepreneurs – those who have an idea and are enthusiastic about it but do not have enough power or competence for the complete cycle of business processes.
The main reasons for seeking help from outsourcing companies are:
- If you are not able to do what needs to be done or cannot provide the internal teams to get the job done.
- If you have a lot of uncomplicated tasks for which you do not want to waste time but instead devote it to more critical tasks.
- If you see specialists which you can “rent” for a pre-defined time at highly competitive rates.
It’s worth noting that outsourcing is not just large, specialized third-party companies. Outsourcing can also involve individual specialists who are willing to do the work. Such specialists are often called virtual assistants. In the IT development sector, such personal assistants are designers, copywriters, SEO specialists, or even consultants ready to help you develop a strategy for the digitalization of your business.
However, even when working with individuals, you should not forget the basic rules discussed in this article. Thanks to them, you can manage your growing business and expand beyond new boundaries.
Author’s BIO: Louis Sawyer is a professional writer, editor and web design expert. She loves writing about technology trends, web development, mobile games and business issues. Also, Louis works as a proofreader at Computools. Follow Louis on Twitter.