How to Outsource Effectively?

As beneficial as IT outsourcing can be, it can also be a disaster if done wrong. So, outsourcing the right functions at the right times, considering cost implications, in-depth research, and choosing a reliable outsourcing partner are crucial for your ultimate success.

This article will give you practical insights on how to outsource effectively to help you grow your business faster and avoid the pitfalls that often come with first-time IT cooperation.

Every company has its own time and reasons to outsource. For some, this may be smart cost optimization and seizing growth opportunities during a crisis.

Others may see outsourcing as a way to gain necessary talent, unavailable in their home region.

Some may outsource tasks when their company is growing rapidly. Developing fast brings various challenges, and many businesses require additional assistance from third parties.

Under any scenario, organizations receive competent and cost-efficient talent to handle their business processes and reduce internal workloads fast and efficiently. Thus, businesses have more time to focus on their core activities and clients.

For each company, these reasons will be unique. Determine the one for you and decide whether outsourcing will really bring you the desired result in this scenario.

Outsourcing isn’t just about picking business areas that a company doesn't want to perform in-house, or that are too costly for it, and offloading them to a vendor. It’s a strategic approach that can help you increase efficiency and grow your company.

Understanding your company’s processes and how they could be improved to bring more value to your business, form a clear list of which areas you want to outsource.

A good practice is to get away from broader business functions; dig into the details of all processes to define which directions will bring the most profit if outsourced and which if kept in-house. For instance, while you outsource software development, you still hold DevOps on your side for seamless delivery and the quickest problem resolution.

It’s best to outsource the areas where you don’t have proper in-house expertise and knowledge. Meeting largest talent pools and deep expertises, capable of satisfying all their needs, these areas will flourish like never before.

Among the most commonly outsourced IT functions are software development, IT maintenance and customer support.

Compare the cost of hiring in-house staff and an outsourced team and the financial impact this investment will have.

In brief, outsourcing to cost-effective regions such as Eastern Europe will unlock comparatively lower rates for the same high quality level as with your domestic teams.

On top of that, you’re also free from paying outsourced staff benefits — a services provider covers any vacations, sick leaves and any other absences that occur during a project.

All this sums up into a significant total costs optimization figure. Here’s a high-level overview of what you can reach, outsourcing to SENLA:

We are also happy to provide you with a more in-depth look on the topic. Read our comparison of in-house software development vs outsourcing to dive deeper.

Selecting the functions you want to outsource is key to outsourcing effectively; nevertheless, you also need to research the supplier market to ensure you find the best-fit partner with principles.

Having principles clearly illustrates a vendor’s serious attitude and dedication to their business and global goal that they’re pursuing.

Here’s what we in SENLA believe in:
Our purpose - To make the world better through effective Software Development. 
How - Make money for us and our Clients. 
Our foundation - Taking care of our specialists.
Our aspiration - Do deliveries on time.

Conduct adequate research to find various options and do a comparative analysis. Choose a vendor with experience in the tasks you’re outsourcing.

Although partnering with a new service provider may be beneficial due to a lower price, you don’t want to be the first company to test its effectiveness, do you? So, before choosing a company, go through its performance, reputation, qualifications, previous records, experience and principles. This is very important when outsourcing complex functions requiring an experienced vendor.

Conduct a background check on various prospective companies and choose one based on your business requirements.

In addition, visit specialized review sites that allow previous clients to rate vendors; read testimonials. You can also look for referrals from other organizations that have outsourced workers.

Don’t fall prey to the trap of a low price when choosing an outsourcing partner. Consider their efficiency, ability to meet your needs, and availability. When using cost as the only gauge for selecting a vendor, you may choose the wrong match just to save a few coins.

You might think about trying out recruitment agencies, who will quickly staff your open positions with their powers. But this may not be a good option because these agencies are first of all oriented on speed, then quality.

First, they might give you a lot of non-targeted resumes, wasting your limited and valuable time. And second, they will ask for a commission, making precisely smart cost optimization, as a reason, pointless.

But even going for IT outsourcing, you might still stumble upon a recruitment agency, just masked as an outsourced software development company. They will pretend they have the experts you need on staff but at the same time unleash the same recruitment machine underground.

This will be even worse because while you expect such behavior from traditional agencies, with companies labeled “outsourcing software developer” your expectations are quite different. You count on a knowledgeable provider’s in-house staff, nurtured and plunged into the processes.

And when, in reality, you get the same newly hunted people under the skin of internal staff, and this comes out, that’s where problems begin.

Exactly for this reason, we’ve written an article on how to locate and avoid such companies, called “The Real Outsourcing vs The Fake One”. There, we list the typical red flags in such companies' behavior and tell what to pay attention to to choose a reliable partner. Be sure to read it if you want to learn the topic and save your money and time.

While, again, you may want to trade the necessary expertise for a smaller price tag, bear in mind that the time that such a provider will spend getting this knowledge may seriously impact the outcomes, in terms of both time and money (which may well offset any savings that you’ll get with such a partnership).

You can’t maintain effectiveness while simultaneously carrying out different operations and  correcting errors. Therefore, it’s best to outsource to contractors who specialize in your niche and pay them reasonably.

Before outsourcing, consider giving the vendor a paid trial project to determine if their performance lives up to their marketing. At the end of the trial run, you’ll evaluate whether the targets and deadlines have been met. The trial duration will showcase any possible challenges that can come up.

If there are any, ask the vendor to make improvements. If the service provider cannot offer suitable solutions and doesn’t meet your business needs, opt for another one.

Speaking of trials, we can find one of the most notable examples of utilizing them “at scale” looking at the US government. They never choose a team right away but instead allow several ones to perform different tasks and only after that, choose the best one for them.

Many companies realize that the times of crisis are the times of big opportunities. And they strive to seize those opportunities to the maximum.

On top of that, a client and a service provider may differently interpret even the same goal — take smart cost optimization for instance. While you are definitely viewing it as a way to optimize operational expenses without losing in quality, some vendors may not share your vision.

These firms, who typically only impersonate outsourced software development agencies, as we mentioned above, will simply bombard you with resumes of cheaper IT talent that often is not even theirs. They won’t have absolutely any commitment to what your cooperation will result in.

Once again we highly recommend you to read our article on how to expose such unscrupulous players and how genuine outsourcing is different from such fake one. Study it to save yourself from a potential disaster, it’s really a worthy piece.

When correctly employed, outsourcing can significantly accelerate a business’s growth. Take time to research the functions it would be best to outsource and select a service provider that perfectly meets your business needs.

Outsourcing your organization's processes to an experienced, competent and honest vendor will streamline functions, enhance productivity, reduce costs, and give you a competitive edge. At SENLA, our Client’s satisfaction is a #1 priority for us. We always strive to cater to our clients’ outsourcing challenges the best way we can.

If you'd like to know more about how we achieve success with our Clients and understand whether we are suitable for each other, whether we are like-minded people, fill in the form below, and we’ll contact you within one business day!