What It Takes To Pick A Reliable Outsourcing Vendor

Anastasiia Kanarska
30th October |
how to pick a reliable outsourcing partner

Outsourcing is taking over

Outsourcing has become a real game-changer for businesses all over the globe. Be it a startup or a reputable market leader – companies are increasingly leveraging all the possibilities that the outsourcing model brings about. 

Here’s a proof in figures:

  • 87% of employers struggle to find local talent to build or enhance their IT teams, leading them to take advantage of the services of outsourcing firms for their software projects.
  • 59% of businesses view software development outsourcing as a strategy for cost reduction.
  • According to the State Of Tech Staffing by Commit, the top benefits of outsourcing software development are scalability of team size (38%), time-saving (38%), and increased productivity (33%).

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software development outsourcing statistics

This business strategy involves contracting out specific tasks or processes to third-party service providers. This approach is gaining momentum for several compelling reasons:

  • It is cost effective
  • It provides flexibility and agility, making businesses able to adapt to ever-changing market conditions and challenges
  • It offers service-level improvements
  • It allows tapping into the large international pool of talents 
  • It boosts productivity
  • It enables focusing on core business activities
  • It drives risk mitigation

 

With this pack of benefits, outsourcing is becoming a preferable option for companies across different industries. 

But before you make an on-the-spot decision to outsource IT-related tasks, you should take into account some important things.

First and foremost, outsourcing is not a fits-for-all solution. Even though highly beneficial and effective, outsourcing might not work out with every project out there. Weigh the pros and cons to know for sure if it is worth looking for an IT outsourcing company. 

If you find this model profitable in your case, then get down to business right away. 

Finding the right partner is the key

What do you start with? Hiring an outsourcing team. Well, it’s not an easy task, you should know. Finding a reliable company to complete your project as per your requirements is challenging – it takes a lot of time and effort. But they will eventually pay off with an outstanding result. Partnering with the right vendor is half the battle. This makes you sure the process will be smooth and stressless. 

But how do you recognize the perfect match?

We’ve prepared a step-by-step guide with helpful tips on how to choose the best outsourcing team for your project. Keep on reading to explore this process in detail. 

How to select a reliable team

When it comes to software development outsourcing, selecting an outsourcing team must be taken seriously enough. The people you choose will be responsible, to some degree, for your future success. 

Follow these best practices to get ahead of the competition with the best partner.

Understand your business needs 

Before you start looking for an outsourcing team, be crystal clear about what you need. Remember – no one knows your business better than you. Even the best specialists in the whole world won’t be able to complete your project if you don’t know how it is supposed to be done. After all, you need a comprehensive list of requirements to assign tasks. What tasks or processes are you outsourcing? What are your expectations in terms of quality, timelines, and communication? What is your exact problem?

What could be the best potential solution for that? By answering these questions, you can make a roadmap for further processes. Be extra specific about what you expect. 

Research potential vendors

Now it’s high time you started looking for and assessing companies that have projects in your niche or technologies. Where should you search for potential partners? There are several places you can go to. The first and the most popular one is Google, obviously. That must be what comes to your mind when you start the search. But consider such alternatives as online marketplaces for IT services, directory listings on Clutch, Reddit, Craigslist, etc, or referrals through friends and colleagues. take advantage of all the available resources to get the most extensive range of options. 

Outline selection criteria

Once you have plenty of options to choose from, you should move on to evaluating each team’s skills to see which one is perfect for you. For this, you need to make up a comprehensive list of essential selection criteria. These should include the following:

  • Technical expertise
  • Skill set
  • Experience in your domain
  • Market reputation
  • Testimonials
  • Available cooperation models
  • Policies to protect confidential information
  • Location
  • Price
  • Company culture and values

Select the suitable outsourcing model

There are several common outsourcing models, each with its advantages and disadvantages. The options vary in terms of setup, level of involvement, price, etc. Choosing the outsourcing model that suits your needs best is the prerequisite to your project’s success. 

In the most general sense, all outsourcing models are divided into location-based, relationship-based, and contract-based types. 

The location-based models are determined only by the geolocation and distance between the clients and the service providers. These include

  • Onshore development
  • Nearshore development
  • Offshore development 

When it comes to the relationship-based models, the ownership and responsibility between a client and the external team toward a product are crucial. This group encompasses the following cooperation models:

  • Staff augmentation
  • Managed team model
  • Project-based model

Contract-based outsourcing models specify how the product quality, payments, timelines, and intellectual property protection needs are controlled, with the ultimate goal of keeping development costs from breaking the bank. 

  • The time-and-material model involves monthly fees or hourly rates.
  • The fixed-price model involves agreeing on a set cost of a project with an assurance that it does not exceed the specified limitations.

Assess capabilities

As long as you have a certain number of potential companies to outsource IT-related tasks to and you have a list of selection criteria, you can get started with the assessment. This process is quite time-consuming. It will take you to carefully analyze each team’s expertise and experience with projects similar to yours, assess the technology they use, look through their portfolios, and examine their testimonials. However, even though many people underestimate the importance of a company’s mindset and culture, they can make a significant impact on the project. Consider cultural compatibility to be sure it will be easier to communicate with the external vendor. Communication gaps might bring about serious problems and result in unmet expectations. 

Build effective partnership

​​After selecting a vendor that meets your all criteria and aligns with the cooperation model that you prefer, it’s essential to cultivate a productive and collaborative partnership. This process must be conducted in the following way:

  • Establish effective communication channels and tools to facilitate regular updates and feedback
  • Define roles, responsibilities, and expectations for both parties
  • Ensure smooth transition and onboarding processes for a successful project kickoff
  • Monitor progress, track key performance indicators (KPIs), and address any issues promptly to maintain a productive workflow

Remember that building a reliable outsourcing partnership is an ongoing process. Continuous communication, transparency, and a focus on mutual goals are essential to ensure a successful and enduring collaboration with your chosen software development outsourcing team.

Summing up

Taking into account all the above-mentioned points, we can conclude that choosing a reliable software development outsourcing partner is paramount to the success of your projects. The impact of your decision extends beyond just cost savings; it influences the overall quality, timeliness, security, and the potential for a long-term, prosperous collaboration. Due diligence in selecting a reliable partner is an investment in the success and growth of your organization.