Outsourcing 101: Strategic Ways To Succeed

Let's Discuss Opportunities
Planning to outsource your next product development? Download our Outsourcing Costs Guide and get the complete analysis of the costs included in the endeavor. It will help you know outsourcing costs, calculate the cost-benefits of outsourcing, and some tips and strategies to succeed in reducing costs with outsourcing.


Courtesy technology, outsourcing has become an easy and affordable option to get tasks completed. But does that mean you’ll leverage all the benefits that outsourcing has to offer? 


Outsourcing needs to be a strategic decision. You need to weigh in all the factors before you think about outsourcing software development. However, today, majority of the companies are outsourcing their business operations to an offshore team for various reasons. 

No matter what part of the world, business are delegating their work to experts in different locations to reduce costs, focus on their core business functions, get better quality work, and many other reasons.  

Why companies outsource2

While these reasons might get you even more enthusiastic to join hands with a software outsourcing company, it is important that you be strategic and know if it is the right time to outsource or not. 

You cannot just jump into outsourcing as it saves costs or improves productivity, or speeds up your operations. You need to be very strategic in outsourcing and timing is one of the first things to consider. 

So, before you jump guns, let’s find out if your company is ready for outsourcing or not. 

Are You Ready To Outsource?

Outsourcing can help you drive profitability even during the period of economic slowdown or financial crunch. No wonder companies are rushing to outsource their business operations. However, many are unable to succeed! 

The biggest reason- they weren’t ready to outsource.

So, how do you know whether your organization is ready to outsource its business operations or not? 

There are many telltale signs that can guide you to start outsourcing/ tell you to outsource. They could be: 

  • Inability to materialize your idea
  • Time crunch in delivering a product or software
  • Stressed in-house team
  • Zero innovation in project
  • Development costs exceeding budget
  • Unsatisfied customers or clients
  • Talent crunch in your local market

New call-to-action

In situations like the above, outsourcing can serve as a strategic solution. You can also ask yourself some key questions as well before outsourcing to know if it is the right time. Some of these questions are:

  • Will my team’s capabilities be improved with outsourcing?
  • Will outsourcing improve my project quality?
  • Will it help my business propel forward?

Answering these questions can help you make a more informed decision. 

Knowing if the time is right for you to outsource is a decisive factor in succeeding. You need to be sure that you are making the right decision before putting your fund and efforts into outsourcing. 

Strategic Ways To Outsource

Outsourcing is an important business decision that can have a very significant impact on the business. However, not all businesses that outsource have been able to successfully do it. Many have experienced failure in outsourcing owing to many reasons. 

  • Some rush into outsourcing
  • Some are unable to find the right outsourcing company
  • Some outsource the primary or core business operations without much consideration
  • Some experience IP related issues
  • Some are not able to save as many costs as they expected
  • Some are not able to manage the time zone differences

There are several reasons that could lead to failure in outsourcing. However, just some strategic steps, and you could move beyond the breaking points and become one of the outsourcing success stories. So, here’s your guide to some strategic ways to make outsourcing work for you. 

1. Identify The Right Approach

The most crucial time for outsourcing is the very beginning. This is the part where you identify the right approach to outsourcing. As discussed in the situational examples, there are several situations when companies outsource and so are the approaches that companies take. To know this, here are some things to consider:

  • Are you looking to plug technology gaps?
  • Are you looking to cut costs?
  • Are you looking to hire a specialist?
  • Are you clear about the scope of your project?

Once you have answered the following questions, you can easily identify the approach that you should be taking for outsourcing software development. Here’s a very quick way to find out the right approach to outsourcing IT services to India . 

  1. If you are looking to plug the technology gap, you can always opt for a dedicated team to fit into your in-house team. You can also hire remote developers in a particular technology.

  2. If you are looking to cut costs, outsourcing can help you in many ways. You can opt for the fixed-price model and find the top outsourcing web development partner in India, the Philippines, Ukraine, or any other country where the outsourcing costs are much lower.

  3. If you are looking to hire a specialist, check out the hourly rate of the technology specialist and the location. You can either hire them on a per-hour basis or a dedicated developer for a monthly salary.

  4. If you are clear about the scope of your project, a majority of the things fall into place. You can opt for complete software development outsourcing or end-to-end management. 

2. Go The Hybrid Way

A strategic way to outsource web development is to take the hybrid route. 

Many people are apprehensive about getting the development work from someone whom they’ve never met. Many even feel that there is a strong language barrier which could lead to misunderstandings in the project. This is where a hybrid approach to outsourcing can significantly help. 

In this approach, you have a point of contact who would listen to all your specific requirements. He/she would act as the Account Manager who would understand your project and would meet you in-person. The development would happen on the offshore site. This way, you can be sure that there is no miscommunication or unsaid assumptions.  

3. Choose The Right Engagement Model

As important as it is to identify the right approach to outsourcing, choosing the right engagement model is also important. There are different engagement models that companies follow to get their work done. Let’s see some situational examples of how companies take different approaches to outsource their business operations to understand the engagement models better. 

Outsourcing strategies Classic Informatics

  1. Hiring a Single Developer: Company A is working on a project. It seeks to create a new screen for its mobile app using the latest technology. However, it is not feasible nor easy to find the latest technology in your geographic location. So, you look for a remote developer that will work on your project to plug the technology gap. 

  2. Setting Up A Remote Team: Company A is scaling up its operations or working on a project. It has a strong-hold in a particular part of development, say front-end. You need experts for other tasks but expanding your infrastructure and the cost of the in-house team would be extremely high. So, you get in touch with an outsourcing vendor to set up a dedicated team of back-end developers, graphic designers, QA, and others. 

  3. End-To-End Product Development: Company A has a new product to develop but not sure where to start. It joins hands with an outsourcing company to get everything done from ideation and development to marketing, analysis, and scaling. The software outsourcing company helps from the beginning to the end to help your product become successful through the managed project approach. 

    New call-to-action

  4. Finding Technology Partner: Company A seeks to digitize and adapt to digital transformation. It doesn’t have the expertise required to digitally transform. It joins hands with a technology partner who will help the company automate and become more advanced in the realm of technology. It would help them adapt to new technologies and create software that could digitize their operations. 

Depending on the requirements that you have, you can choose from the engagement models and ensure your business is able to succeed with outsourcing. 

4. Have A Clearly Defined Scope

While most people say you need to set realistic goals for outsourcing, having a clearly defined scope of the project is a more strategic step. 

Just knowing your goals isn’t enough. You also need to have a clearly defined scope of the project. It should specify everything that you are expecting the outsourcing software development company or the remote developers or the dedicated team to accomplish. Define everything upfront from the tasks in every sprint to the number of hours dedicated to the technology used to the price and everything. 

Do not assume! State everything, even the obvious. There is never too much information when you are outsourcing. 

Outsourcing Strategies (2)

As seen above, communication problem and improper planning are two of the major reasons why outsourcing projects fail. With a clearly defined scope of the project, you can avoid the issues created in communication or planning.   

Also Read: Outsourcing Contracts: What You Need To Know

Taking the agile approach can be beneficial in defining a clear scope. It can help you break down your development task into small sprints. An example of a development scope efficiently broken down into sprints can be:

1st Sprint: MVP development after discussion and market research

2nd Sprint: Analysis, assessment, and monitoring of feedback and performance

3rd Sprint: Improvement based on the data collected

4th Sprint: Launching and testing the revised version

You should also have a clear scope for your project in the beginning to ensure you achieve success in outsourcing

5. Establish Strong Outsourcing Relationship 

One of the biggest trends in the outsourcing industry in 2020 is to build a strategic alliance. The outsourcing practices are changing in 2020 and people are evolving in the way they entered any outsourcing relationship. 

  • Building Relationship Networks: The traditional value-chain network is paving the way for building relationship networks or adopting a multi-vendor approach. 

  • Digital Outsourcing Model: Another common approach that is taking shape is a digital outsourcing model. Here, you will have services offered by digitally automated tools to make work more digitized. 

  • Forming Strategic Alliances: A strategic alliance is when two independent companies sign an agreement for a business operation. 

Once you know how you want to approach IT outsourcing to India, you can start by forming a strategic alliance for the same. Establish a strong outsourcing relationship where there are no communication barriers and you can trust the work. Just make sure that you have found the right company to join hands with. 

See How We've Helped Clients Succeed With Outsourcing 

Success Stories


6. Leverage the Time-Zone Difference 

Most of the companies believe that the time zone difference is a set-back in their development task. But if you think strategically, you can leverage this time-zone difference to your advantage. How?

Well, for starters, you have a team working undisturbed on developing your software. The most important thing when you talk about the time-zone gap is that you can use this gap to ensure your operations are running 24*7. 

Choose a software outsourcing company that has an overlapping time-zone of at least an hour or two in the day. It could be in the morning or during the evening. This way, you will have the time to collaborate and communicate with the team for the project. The rest of the time, the outsourcing company works on your project to ensure the work carries on 24*7. 

Wrapping Up

Outsourcing is proven to help companies cut costs, improve business processes, make in-house teams more efficient, and add value to the project. However, simply rushing to delegate your business operations to an outside company can lead to failure. You need to be very strategic in outsourcing to succeed. 

Wrapping up, we would also like to throw light on the importance of joining hands with an software development outsourcing company. Whether you are hiring remote developers, setting up offshore teams, or getting remote product development, the role of the outsourcing vendor is always the most important. You need to be very careful in choosing from the top outsourcing companies in India. Check for their expertise, experience, technology stack, offerings, flexibility, engagement model, etc., before joining hands. 

outsourcing due diligence

Topics : Outsourcing

Swati Sharma

Written by Swati Sharma

Swati Sharma, a writer by day and an avid reader by night, works with Classic Informatics, a leading web development company in India. Owing to her passion for her profession, she loves to stay updated about the current & emerging trends in the IT industry.

Join Our Newsletter

Get the best of Web and Mobile world straight to your inbox.