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Factors that Should Influence Your Outsourcing Decisions

There are other various reasons why you should – or should not – outsource

Considering outsourcing? Beyond cost savings and the need to focus resources on your company's core strengths, there are other various reasons why you should - or should not - outsource. After all, not all outsourcing companies are created equal, and outsourcing, in general, is not necessarily the end-all and be-all of IT strategy.

In today's economy, monetary pressures are forcing companies to seek software development, information management, and technical support services from third-party service providers. Since engaging both near-shore and offshore service providers can result in overall lowered operating costs, outsourcing is now a lucrative strategy and an integral aspect of running a business. In fact, a business would be hard-pressed to ignore the importance of engaging outsourcing providers for product or software development - or other computing requirements.

Still, as mentioned, not all outsourcing companies are equal, and on top of savings, there are several factors that you must look into before making the outsourcing decision. These other factors must touch upon the following:

Influencers of Your Outsourcing Decisions

Technical Expertise
The workforce that will handle the day-to-day development work, quality management, documentation, and analysis of your software development project is the heart and soul of your outsourcing engagement. In this type of situation, a larger headcount is not always the best option; in fact, a small team of internal specialists within your firm may be more effective than a pool of junior engineers offshore. Therefore, it is vital that you ask the potential vendor about its standard knowledge management processes and training programs. This access to technical expertise should also include knowledge transfer from the vendor to your in-house team as well.

Quality
Quality must not suffer when your organization sends aspects of your operations or parts of your development job to a third-party provider. Fortunately, the vast majority of outsourcing providers have embraced industry-wide quality management processes and standards. In choosing the best provider for your organization, it is important to review how quality is being managed within that company.

Vendor's Expertise in Your Business Space
Not all vendors are created equal; we know that much. However, much like having an individual specialization, it helps if the vendor has had extensive experience in your particular business space or vertical. Prior experience in delivering projects for the financial services sphere, for example, could mean that your organization can access the vendor's wealth of technical and industry knowledge.

Overall Business Strategy
Ask yourself (and your management team) if outsourcing is merely a knee-jerk reaction to the call for cost-cutting or if this strategy is a more long-term engagement that is integral to your organization's overall business plans. After all, the permanence (or semi-permanence) - or the temporariness of outsourcing's presence in your operations - can affect resource acquisition, internal processes, security clearance, and budget allocation.

More Stories By Executive Brief

ExecutiveBrief is an online project management resource for technology executives, featuring expert opinions, reviews, blogs and news. The publication mostly covers software project management and process improvement topics and is targeted at higher decision-makers. Other focus topics of ExecutiveBrief are leadership issues and outsourcing industry trends. More information at: www.executivebrief.com

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