Business process outsourcing is becoming prominent these days. Some common outsourcing activities include human resource management, facilities management, supply chain management, finance and accounting, customer support and service, call-center services, data entry services, telemarketing, inbound and outbound marketing, computer-aided design, medical billing, research, design, content writing, engineering, diagnostic services, and legal documentation, etc.

As Statista survey, the global market size of outsourced service is around 92.5bn US dollars, BPO industry value is around 26 bn dollars and ITO (Information technology outsourcing) contract value worldwide reached 66.5bn US dollars and it will continue to rise, as modern businesses are leveraging software outsourcing, digitize and optimize their business processes.

Outsourcing projects is becoming a trend for most businesses in the world nowadays because of its benefits and convenience. Some advantages of outsourcing:

• Expand expertise with a highly skilled level and full experience.
• Saving much overhead cost for the project.
• Focus on developing core competencies of business.
• Faster development and speed up product time-to-market globally.

However, outsourcing your project means using the external workforce and being with different project management methodologies, businesses need to consider the risks and rewards carefully and take the time to thoroughly evaluate some disadvantages of outsourcing project management including:

• Exposure of sensitive company information.
• Not sure about professional conduct, ethical behavior, time commitments, scope, and other factors into any agreement.
• Language and cultural barriers:

This article sums up 8 tips to outsource your project effectively.

1. Project Planning

Before you can outsource your project, you will need to plan it in great detail. It’s going to be handled by a remote team, so the project plan should be more detailed and specific. This helps outsourcing providers better understand your project ideas and get them done successfully.

You have to break projects down into tasks, write a description for each task, and explain which resources and information have to be used for each task specifically.

If you are outsourcing to a team that charges by the hour, you will also have to negotiate with them regarding how much time they will need for each project task and how much hourly rate working for each developer. From there, your business can calculate and estimate the project budget which creates the effect of the project.

The whole project plan should be summarized in words and sent to the software outsourcing vendor.

2. Pick a suitable outsourcing model

Depending on the company budget and characteristics of every project that business chooses a suitable outsourcing model which helps to get a successful development process.

Basically, outsourcing models can be divided by location-based which is how far away from you the team resides including:

• Onshore software development is the process of sourcing or relocating a business' production operations within domestic national borders which is within their own country.
• Nearshore software development is the process of sourcing or relocating a business' production operations to a foreign country geographically nearby which is a neighboring country or one in the same time zone.
• Offshore software development is the process of sourcing or relocating a business' production operations to third-party providers overseas which is a more distant country.

For instance:

• If your business is located in North America where the labor wages are so high, you can consider using an offshore outsourcing firm based in East Europe or Asia, e.g outsourcing to India, where hold a profuse labor force with high competence, expenditure, and lower cost with only $17- $25/hour because the onshore development set the highest development rates that go up to $150/hour and more.
• If you live in Germany and hire a team that resides in Poland or Ukraina which are nearshore countries with little time difference, it is more cost-effective compared to onshore. (In Germany, software companies charge $80 - $100 per hour, while in Ukraine or Belarus the costs are twice as low $37 - $50/hour).
• If you are an Asian enterprise like Vietnam, consider an onshore outsourcing provider because of the many benefits of high-quality expertise, cost reduction, no huge time zone, language issues, or cultural differences.

3. Choose a good outsourcing vendor

In the digital transformation era, using outsourcing services trends are booming. Choosing a good outsourcing provider decides most parts of your product’s success. There are specialized IT outsourcing companies on the market that offer end-to-end outsourcing from operating the client’s perspective to handling project management on their client’s part. By using the latest technologies and having responsibility for the procurement of good equipment or the best professionals and freelancers, these companies can provide overall outsourcing for their clients.

Before making a decision, enterprises should search for potential partners in the outsourcing market with affordable outsourcing prices and check their information carefully.

By choosing a suitable outsourcing provider your organization can focus on core areas without the need to constantly oversee and manage the remote team. There are some ways to look for the right outsourcing partner such as:

3.1 Check provider’s information

Businesses can check outsourcing provider’s info by asking providers some questions to clarify their services, experience, and working project methodology.

You have to make sure to check their references and ask for their customer experience, their client’s feedback on who used to use their outsourcing in order to check their credibility and reliability on the market.

Through evaluating and scanning outsourcing providers like you are recruiting full-time developers organizations can easily filter the potential providers for your own outsourcing projects.

3.2 Focus on specific experience

It’s always highly evaluated for vendors with a lot of experience in the outsourcing field. They can guarantee to solve difficult problems and product quality issues.

Ideally, the outsourcing provider you select will have specific experience with the type of project that you’re undertaking, notably, when outsourcing complex technical projects such as software development.

For instance, if you’re looking for someone to develop an application for the iPhone, make sure they’ve actually completed commercial projects on that platform for other satisfied customers.

3.3 Portfolios and samples review

Another way to choose a vendor is to review their portfolios and make sure it fits your expectations for quality and style. If you are still unsure of their capabilities, consider asking them to show some previous work samples or provide a basic outline of a work plan.

If working with an outsourcing provider for the first time, the enterprise should start with a small project that is simple in scope. This will give you a better idea of the provider’s style and capabilities before you decide to outsource a bigger project with them in order to fight with other competitors on the market.

4. Communication strategy discussion

Outsourcing your project means you can not work with a remote team regularly and directly. It also depends on what type of outsourcing (onshore, nearshore, or offshore). Basically, all types have some difficulties in communication such as different locations or language barriers.

Communication is a crucial aspect of every project management task. It helps owners and remote teams understand each other and solve big problems in the outsourcing process. There are a lot of communication obstacles, so businesses need to build a specific communication strategy for the entire team. That helps to get work done on time effectively.

The ease of communication should be one of your priorities. Besides, it is essential to communicate with the project manager of the outsourcing company and the team who will be assigned the project without the language barrier.

Some steps in communication strategy consist of:

• Owners learn the development process which is guided by the outsourced development partner, make sure understand the different development methodology.
• Examine remote developers’ previous experience in various projects developed by them.
• Make sure freelancers are very well aware of the complexities and necessities involved in the project.
• Keep messaging to the entire team development frequently (By asking questions).
• Setting up daily/weekly/monthly reports to maintain the connection through an advanced project management tool.
• Consider using six-sigma which is a data-driven methodology that provides tools and techniques to define and evaluate each step of a development process of the project.

With a clear and effective communication strategy, you will reduce redundancies and increase the productivity of remote workers and teams.

5. Define the scope fit budgets

Some small businesses have a lot of ideas for their projects but with limited budgets. First, they need to determine what is the main purpose of their product which goes with business value and put it in scope, notably, the ones with a limited budget.

Defining the scope is one of the most important tips to outsource your project effectively, but it should fit your budget. You and your outsourcing partner need to discuss the pros and cons of different features to place them in a scope of work and outsourcing contract.

Some key metrics for outsourcing in defining the scope fit budgets:

• Clearly determine the schedule of your project.
• Complete a clear statement of what you are hoping to achieve.
• Define your project requirements up front.
• Set milestones and frequently track progress to provide feedback.
• Consider using cloud services.
• Be specific about the deliverables you expect the vendor to provide.

Make sure that you clearly communicate any schedule, scope, or payment changes to your outsourcing provider and get confirmation from them, and agree to the changes. A quotation proposal with a reasonable price will be sent to you by the outsourcing partner. This ensures that you meet your final deadline and that the final product meets your standards when you tie the vendor’s payment to these milestones.

6. Pay attention to confidential information

Working with an outsourcing vendor means that you need to provide your project information and other sensitive information supporting your project.

To make the management process easier, you have to allow outsourced workers, or teams, to access all project-related documentation. This will allow them to work more efficiently and save a lot of time by not having to answer project-related questions. When the outsourced team has access to all of the information and resources, it is far easier for them to operate and to complete the tasks promptly.

However, there are some risks that businesses face with exposure to important information. As a result, signing and committing not to disclose confidential information is one of the essential activities when outsourcing your project.

For this purpose, you can use any software that is powered by cloud computing technologies, i.e. Google Drive, OneDrive, Project Management software tools, etc. Most of these tools have change tracking enabled. This is very important, as it prevents any valuable information from getting lost after edits and updates.

7. Make sure to own the right resources

After the development process, the business goal is a product that you expect to own. A product contains many different components. You should ask for a project manager and product manager, and understand the product completely. Outsourcing fulfillment will help you streamline your business.

Besides, businesses should be clear about who owns the resulting work product and any important components of that product and make sure the outsourcing partner understands how you intend to use the deliverables that they are agreeing to provide.

8. Get support and maintenance

After finalizing the product, maintenance plays a key role in the outsourcing process. The service quality of outsourcing is in customer satisfaction. A good outsourcing partner with good support from the help desk for the product will be a bonus point in finding a reliable partner.

After completion of the projects, you might have some feedback from potential investors, this is the time for outsourcing providers to support you to change some features with a discounted price that helps to reduce overhead costs and time for businesses.

You might want to innovate your product after defining your competitive edge by finding different ways of being unique in the marketplace. It’s time to need outsourcing provider’s support.

The price negotiation would be easier for the current vendor than for a new vendor based on benchmarking, which is an important tool to ensure competitive pricing over the course of an IT outsourcing deal that some outsourcing providers are using popularly. For technology projects, it’s a good idea to specify a warranty or support clause so that you are assured of some amount of continuing support from the vendor after the project is complete in the future.

Thus, before you actually hire an outsourcing software development organization, consider the efficiency of the maintenance outsourcing provided by the firm.

Conclusion

Besides robotic process automation and virtual assistants, outsourcing service is becoming a global service popularly. It contributes to pushing the economies of scale to develop dramatically. Manpower outsourcing is a strategy that helps businesses achieve their goals without location and language barriers. In order to maximize productivity and profitability, not only startups but also multinational businesses should consider outsourcing as a smart method with competitive advantages compared to the traditional one in the digital transformation era. Some organizations have opened new offshore development centers to maximize operational efficiency and improve outsourcing management systems.

There are some pros and cons of outsourcing, but most businesses get much effectiveness and scalability from strategic outsourcing thanks to the consultancy of those above tips. In a big competitive ITO market, the service quality of outsourcing providers is improved a lot to attract more customers and increase the globalization of outsourcing services.

To use outsourcing services effectively, business owners need to make a detailed plan for the project, choose an outsourcing service provider wisely, consider Agile methodology with emote team’s agility, and create a good communication strategy to achieve the business objectives.