When should you outsource?
The concept of outsourcing began in the 70s in Great Britain, when automotive companies decided to buy German projects. Now the strategy of transferring employees or hiring external companies to get the job done is taking over the European IT market, as local developers are great hiring material. Why do companies decide to outsource? What is there to gain?
Benefits of IT outsourcing
It’s worth considering outsourcing, as it lets you save a lot. Not only in terms of money, but also the risk of hiring new employees and onboarding them. If you decide to depute your tasks externally, do your research to be sure that you choose professionals. Then you can expect increased efficiency and mitigate the risk of failure. You can focus your resources on what’s important, letting experts take care of the technical issues.
Outsourcing is especially useful when the company doesn’t have internal specialists nor access to them locally. But how to look for such experts if you’re not in the field?
Look for a credible team
The biggest challenge in the process of outsourcing is to choose the right people. Try not to hurry as it’s crucial to choose a team that will be good to work with. There are a few things that will help you make the right choice:
thoroughly check the company’s portfolio and references: these are examples of their previous work
get in touch online and check if contact is smooth despite distance
make a call or a visit to check communication and workflow
When it comes to remote work, communication is crucial. Maybe this is why so many companies from all over the world choose Polish developers: Polish people are really good with foreign languages and soft skills. Also their attitude to agile methodologies and flexibility may make your cooperation easier.
Types of outsourcing
Speaking of outsourcing, it can actually mean a few slightly different processes. There are some types that you should consider:
Offshore outsourcing means sending the tasks to a company away. This option has its advantages and drawbacks: while it may lower the costs significantly, you can still struggle with communication or time zone issues.
You can avoid problems related to offshore outsourcing, having your job done by professionals from neighbouring countries. This makes meetings and calls a lot easier.
Onshore resourcing happens when you decide to hire specialists from your home country. Still, you can work remotely and independently. However, not always can you find experts in your field available locally.
Costs: fixed price or time & material?
There are two models of pricing that are still present in the industry. You can either pay a fixed price, which cannot change during the project, or choose a time & material contract. The latter allows more flexibility as the total cost depends on time spent on the project.
When should you go for the fixed price model?
Fixed price is definitely safer for the client as the costs cannot change during development. However, this limits the development team during their work. To fit the project within the planned budget, one has to diligently plan the whole workflow to meet the deadlines and financial limits. This puts a lot of restrictions both on the team and the client.
When time & material contracts make sense?
As it may seem more demanding on the client a time & material contract lets them see where they spend money. This type of contract is truly transparent and adjustable. The project can change during its implementation, which cannot be done while settling for a fixed price deal. If you prefer agile workflow, this type of deal is much better for you.
Remember that in the business world there are no simple solutions. Each project demands other types of management and deals. Maybe you have some simple tasks that you can outsource far away with no need to talk a lot? Or maybe you need a creative team that can support your project while being available for regular meetings? Whatever you do, keep calm and be reasonable.
And if you need more advice on IT project management:
Software development: in-house or outsourcing?