September 21, 2020 7 Min Read by Kanika Gupta

2020 is among the most crucial years in the history of IT outsourcing. As remote working tends to boom around the world, outsourcing has easily managed to reshape the way businesses work with their enormous benefits. As a result of this businesses are now looking forward to influential strategies.

Digitalization and globalization are rapidly evolving customer expectations and demand a shift in how leaders responsible for logistics approach outsourcing strategy,” says Courtney Rogerson, Senior Principal Analyst, Gartner.

When thoroughly planned, outsourcing plays a vital role in ensuring productivity is high; enabling managers to focus on business development and disruptive innovation.

Last year, the IT outsourcing industry was worth $92.5 billion that is 7 billion more than 2018.

This article will help you understand the overall perspective of outsourcing. Making an outsourcing decision is critical to any business type as it involves a lot at risk be it resources, costs, workforce etc. In the current scenario, businesses not only outsource a particular process or a task rather it provides the entire system to the outsourcing providers to operate and handle.

A smart and industry expert outsourcing provider will deliver the fast and accurate results to your business. So, make a wise decision when choosing the right outsourcing provider.

Things To Consider When Outsourcing

Here are some factors that you can consider, while making an outsourcing decision. Considering these 5 things before opting for outsourcing can ensure increased profits, stronger outsourcing relationships and higher customer satisfaction.

Will Outsourcing be cost-efficient?

Outsourcing takes place to increase profit margins, lowering overhead costs while improving business revenues. The cost incurred in hiring employees, buying IT resources, and working space could get a bit heavy to handle financially and outsourcing is the only option left with us.

For all those who are planning to outsource, we have put together an Outsourcing Costs Guide. This is an all-encompassing guide that will tell you everything you need to know about your costs, calculations, savings, and tips to save more for a successful outsourcing relationship.

Also, if outsourcing tasks are not organized smartly, this could result in costly as compared to the in-house operations. Thus, you need to analyze and examine thoroughly how much you are investing in hiring an outsource team versus the cost involved in hiring in-house employees, IT infrastructure expenses, and others. After all, outsourcing should be a profitable decision.

What kind of resources and technology are helpful in outsourcing?

The IT resources and technology play an important role in gaining efficiency and high speed of completing tasks. It applied to your outsourcing partners as well. The technology and resources used are to be considered prior to when you choose to outsource.

You need to ask the vendor about the tools and technologies they are going to use for your project and how capable are they of handling all your outsourcing needs?

And what about the resources? Are they well trained for the assignments?

Does the vendor have an office with up-to-date systems and can handle the most rigorous of the outsourcing functions?

These will lead the way to select the best outsourcing provider who has the best resources and updated technology for seamless handling of your business functions.

Read also: Untold Stories of Successful Software Outsourcing You Can't Miss!

How much risk is involved in outsourcing?

Outsourcing is often viewed as a risky option, and although there is risk involved this depends on the type of processes outsourced. If core business practices are outsourced the risk is huge, as you have less control over what is a central element of your organisation, which can have harmful results.

On the other hand, outsourcing development projects should be viewed as well-calculated risk, offering businesses an opportunity to research their market and work closely with a third party to innovate and generate the highest quality results possible.

Is team collaboration necessary?

Agile development has continued growing in popularity, with continuous communication and collaboration at the heart of innovative projects.

Seamless Communication between onshore and offshore teams plays a key role when developing a software product ready to market. Imagine how chaotic and hampered the workflow would get if your outsourcing team works during daytime and your in-house team operates at night or vice versa.

The time zone, cultural environment, language are the factors that need to be considered first before managing and outsourcing development teams.

Your outsourcing provider should be competent enough to understand your requirements in clear terms so that there are no delays in the completion of your project.

Meeting Deadlines is the one way out.

Delivering projects on time is as important as the costs in outsourcing. For instance, if a provider fails to meet the deadlines, it can lead to major bottlenecks. That alone will nullify any cost-saving benefits that you had anticipated while hiring them.

You need to ensure that the provider adheres to the promised quality and timeliness. One of the ways to do this is by making all your queries beforehand.

If you find that the provider has little quality control measures or does not have any backup plan should they miss a deadline, it is better not to hire them in the first place.

Read also: Top 10 IT Outsourcing Companies: List For 2020

​Glimpse Of Some Outsourcing Tips That Can Get You Started In Your Business

Listed out some outsourcing tips that help you get started in your business:

​Creating an effective plan

With outsourcing, it is good to focus on core areas in your business which will get you maximum growth. It fills the gaps in business with the best tactics and focusing areas that require attention of experts.

So, if you want to bring a radical change in the infrastructure or a major change in the output or manage the operational costs to reduce the outflow of cash.

Thus, you have to create an efficient plan for the services that you require.

Read also: Outsourcing In 2019: 6 Proven Tips That Ensure Success

​Understanding the basic objective of outsourcing

It is not enough to outsource simply because it can help you save costs. It is true that outsourcing is cost-effective but you have to know the exact reason for which you require the services of an outsourcing company.

A business must focus on the reason and benefits of outsourcing which can have a positive impact on the business. You have to identify and find the causes for which outsourcing can be an effective option for the services that you need to obtain from a company that has better skills to handle those tasks.

Make sure that the outsourcing company you have hired has understood your objective and the benefits of hiring come into effect in the real sense.

​Getting quotations from different outsourcing providers

If you want to get the best outsourcing services, you have to talk to a few outsourcing companies to find out the service that they offer and whether they match with your business requirements or not.

Finding a good outsourcing company can be a challenging task as there is a lot of companies that offer these services and you need to find one that can handle the tasks that you want.

Read also: Outsourcing 101: Strategic Ways To Succeed

​Knowing the points of contact

It is important to find out from known resources about the ways in which you have to search for reliable outsourcing companies.

Getting referrals and recommendations from those people that have availed these services can also work in your favor.

​Creating deadlines and completion of work

When it comes to outsourcing, you have to create a set of deadlines for completion of projects.

Although outsourcing service providers offer a time frame for delivering the services, there is no chances that companies fail to meet the expectations of their clients.

It is good to steer clear of such companies and associate with those organizations that have the reputation of offering the best to the clients.

​Reviewing the outsourcing contract

As soon as you get a copy of the outsourcing contract, you have to read in between the lines and try to get a grasp of the points that are mentioned therein.

Unless you read the document of agreement carefully, you might just miss out on some of the most important points that are essential before you get started with outsourcing services.

Hiring a legal counsel is good to get clarifications about the points that have been mentioned in the contract.

​Transparent ideas and work process

While hiring an outsourcing company, do not hesitate to ask questions to the outsourcing providers that can be related to any aspect of outsourcing or specific queries about the project that you intend to assign to the company.

In addition to this, you have to be clear about the hours of working when you hire a company that belongs to a different time zone.

For some projects, the time zone of the outsourcing company can extend the working hours of your business leading to completion of projects ahead of time.

Putting it all together

During a reduction in the economy when the demand for products and services is at the lowest level and cost is sky rocketing, outsourcing acts like a savior to all the businesses floating amidst.

Majority of the organizations look for cost-effective solutions to run the business operations with effectiveness and maximizing the performance of an organization.

​Ignoring the benefits of outsourcing like cost savings, enhanced expertise, and flexible sourcing may put CIOs at risk of falling behind financially and of stumbling into a competitive situation.

Rushing into the outsourcing decision without clear goals can result in misaligned expectations, increased management overhead. So, to avoid putting your project at risk consider the factors affecting your product outsourcing and make the right outsourcing decision.

Reviewing the benefits of outsourcing will not help you much, rather you have to make serious efforts to understand what outsourcing is all about and whether your business will benefit from the services or not.

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Topics : Enterprise Solutions, Outsourcing



Kanika Gupta

Written by Kanika Gupta

Kanika Gupta, a professional tech writer works as a content writer in Classic Informatics, a leading web development company . She loves to write master tech pieces and let readers connect with it fluently.

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