Outsourcing IT department shows impressive results for businesses, cost reduction being one of the most appreciated. Other benefits include risk management, agility, and access to talent. Since the business's core competencies are not always within the IT area, it makes sense for the companies to go for the professional, skilled, and experienced outsourced teams who have it all.
So, how does outsourcing IT department work, and how to make sure you benefit from it?
As a tech startup, you encounter many difficulties, like balancing product development demands, customer service, and other essential tasks. Meanwhile, each process costs you money. So it is the point when you think about optimization and offshore IT outsourcing as a life-saving step for the business.
Advantages of Outsourcing IT Department to Stay Agile
The 2018 survey on Google Workforce showed that the number of outsourced employees was higher than the direct ones. Apple, Facebook, and Microsoft are regularly increasing their overseas staff. While they predominantly see value in reducing the cost, outsourcing a development team can give you a bunch of other benefits.
Risk reduction
Let's say you have a great idea for a unique product that will be in high demand on the market. You want to make it happen now, but the team lacks a high-class UI/UX designer to develop an outstanding mobile application. The recruiting process may take you weeks, if not more, in order for any specialist to align their vision with yours.
Instead, you can opt for a synchronized, skilled outsourcing team that understands your vision and knows the algorithm for bringing it to life as soon as possible. In other words, less risks and quicker time-to-market.
Expertise
Your core area of business and the skillset aren't always sufficient to cover the needs of the product. Hence, your team might have superficial knowledge but can't forecast and follow the trends. Meanwhile, an outsourced it department has an extensive experience with the diversity of projects that can add a valuable perspective to your development process and ensure that all bases are covered.
A prime illustration of this point is Slack. The founder realized that his idea was great, but he lacked the expertise in design and outsourced it to specialists. The result was amazing, and now, Slack has about 8 million active users enjoying the product.
Technology selection
Deciding on a tech stack is a question that only professionals will give you the right answer to. Based on experience, they can recommend what is better for digital wallets, and they definitely know what does not work for open banking.
Insights
It often happens that your idea needs refining and other perspectives. Whether you hesitate with the approach to planning the releases, stages of development, and financing it, or you have a missing element, a tech partner is there to support you. All the industry insights help startups add value propositions to their idea and select the right track for development.
Agility
As a startup, you prefer to spend money wisely. There is no excess budget to allow a mistake of developing the product without ensuring it satisfies the customer. The agile model of software engineering allows you to remain flexible and decrease the cost of development. Working in sprints, making changes on the move, and getting instant feedback from the market before the product is rolled out benefit startups the most.
How to Find the Right Offshore IT Outsourcing Partner for Your Project?
The world is connected like never before, and with that comes the problem of having an abundance of options. Looking for a tech partner for a startup is one of them. To make an educated decision, not a guess, equip yourself with research. Think about the requirements you have, your product, your business model, and your plans. Your tech partner should be on the same wavelength as you in terms of product vision and its implementation.
If you have gaps in your vision and feel like the tech side of the project needs enhancement, try consulting services to see if the team is right for you.
Here are some of the ways you can use to find your "outsourced soulmate":
- Referrals and recommendations. It can be feedback from someone you know or worked with or an online website like Clutch. It provides a detailed review of the type of work the team performed, deadlines, and the professionalism of the services.
- Search for the company by the case studies. So you might not know the executor of the idea, but you know the brand. Famous e-commerce platform Alibaba, for example, focused on outsourcing IT projects to more experienced US teams. If you know successful cases of projects similar to yours, find out who stands behind their completion. Cases paint a thousand words and provide you with enough information to decide on your tech partner.
Tips to Manage Your Outsourced IT Department Effectively
Outsource software development team is self-sufficient and works like a clock. Yet, you need to know how to benefit from it to the full extent, and for that, some rules should be established.
Creating a culture of understanding
Communication is crucial for successful cooperation between a startup and an outsource development team. Hiring overseas, outside your time zone, comes with the need to align the schedules. Another important aspect is reporting and responsibilities. Ensure you establish all the roles initially, so when you need to ask for the result, you know who is in charge of it.
Feedback and support
Agile envisages constant communication and feedback. Without getting your opinions, the team won't be able to move forward, implement the changes, and polish the product.
Clear expectations
The outsourced development team is a partner rather than just a service provider. It is better to approach your cooperation with the understanding that it works both ways. The team needs to know your true expectations and ambition to develop a top-notch product. The feasibility of the idea should be tested in the initial stages of your work, and it is recommended to document it.
Collaboration model that aligns with your goals and objectives
Before planning the project, decide on the pricing model that works best for you. It can include a variety of plans such as fixed price, dedicated team, or time and material. Depending on the budget you operate, some models will work better for you. If you hesitate, consult the tech team since they will have more experience and insights on that topic.
Common Challenges with Outsourcing IT Departments and How to Overcome Them
Working with the outsourced team means interacting with other organizational structures. Everything from communication to assigning responsibilities might be drastically different from your organization. With that in mind, outsourced teams mostly employ Agile methodology since it allows them to maximize the benefits of cooperation with multiple companies that differ in policies and visions of business conduct.
Agile presumes flexibility in everything - planning, change management, and delivery. Still, there are some considerations that companies should look into to prepare.
Control
The outsourced team is a contractor. Hence, you get to control the project, but the executors are away, and you might feel like you do not influence who works on your project. It might come as a challenge if you are used to having an in-house team and watching them work.
Fortunately, the solution is simple. First, define the boundaries and controls in the agreements you sign. Meet the teams and discuss their work model, approach to completing tasks, and needs. Make sure they know your vision and agree to your ways.
Security of data and intellectual property
When working with any external party, you should consider incorporating the rules and regulations to protect your intellectual property and data. It's worth discussing the initial stages when you are selecting the partner. Implement robust security measures, and add the necessary points into your contracts, like non-disclosure and non-compete agreements.
Failure to transfer knowledge
Documenting is a good idea for companies that outsource. It gains even more value when you hire a new team to continue a previously started project. Without thorough documentation of expectations, plans, and technical requirements, the next team is set for failure due to a lack of knowledge.
As an option, create a kind of Knowledgebase or Wiki for the main processes, flowcharts, and general documentation. It will also serve you for maintenance after your cooperation with the contractor ends.
Onboarding difficulties
Although when outsourcing IT projects, you get an organized, well-synchronized team, you still need to help them catch up with your policies and rules. To make it seamless and trouble-free, make sure you pass all the right information:
- Key people in your company who will be contact points and their availability schedules;
- Brand books or any guidelines that describe your company well;
- Project management tools you want to use to organize the process and reporting tools;
- Knowledgebase of your project/company.
Leveraging Outsourced IT Department for Successful Product Delivery
Staying on top of emerging technologies, implementing them into your product, and balancing the budget are challenging for a startup. Outsourced teams become a supporting pillar and lead the way to efficient and effective use of the existing means. Expertise, experience, and motivation to deliver the product make it easy for them to see the gaps in your planning and enhance the overall idea.
Finding a partner is something that bothers most startup owners. There is an abundance of small and large outsourcing companies, and it complicates the selection. Start with checking the case studies, or in other words, the portfolio of the projects.
Undoubtedly, letting a third party into your business comes with some difficulties if you are not prepared. So, it is worth looking into how to manage outsourced teams and establish certain rules. But on the other hand, Agile practices do not require much effort and facilitate smooth integration of the teams. So, rely on experience and Agile, and you will be impressed with the results.
ElifTech has a solid track record of projects in fintech, healthcare, e-commerce, and more. We are passionate about technology and innovation. Our expert team with years of experience knows how to reduce costs and accelerate time-to-market.
Contact us if you are looking for your reliable tech partner.