Outsourcing 101: Why Outsource, and How to Make it Work

3 min.

I’m not here to tell the world that IT outsourcing is humanity’s best invention and everyone should do it. There are cases where it works perfectly, and there are cases where it should be avoided. But facts are facts: according to the Society for Information Management, CIOs around the world will spend more on outsourcing in 2014. For me, this means a lot: for all these years as the head of Itransition, we’ve been doing something right.

To outsource or not to outsource

At the beginning of every IT project, there are many decisions to make. Despite the fact that outsourcing has grown more popular in the last decade, the decision “to outsource or not to outsource” is analyzed to this day. Why?

In an ideal world where businesses enjoy unlimited budgets, open deadlines and zero competition, outsourcing would be necessary. Outsourcing gains traction, though, when the economy is recovering from major problems, money is an issue, and cutting costs, ensuring quicker time to market and beating the competition are concerns.

But let me tell you this: IT outsourcing is popular not because it’s cheaper, faster or less  competitive. In the majority of cases it is simply better. If you’re going to outsource, outsource for the quality. An offshore software development team is often the only way to get the quality you need at a price only IT outsourcing can offer. The time difference means if you need something finished quickly, the team will make it happen, keeping coffee producers in business while they are at it.

People also hesitate because the perceived risks of IT outsourcing (more like outsourcing myths) scare business owners away – even though they can be mitigated effectively. The process has been perfected through years of mutual collaboration. The tools to keep communication flowing are all there, and IT outsourcing has a high rate of success– that’s a fact!

If a project is complex and requires constant immersion in the business, sometimes it is better to do it with the help of local teams. Obviously, the type of industry plays a large part here, and highly sensitive projects, where a breach of security could cause havoc, should be prepared carefully (federal projects have been outsourced in the past). Projects that involve sensitive data and breakthrough know-how should be approached with caution; but technical and legal tools are out there to solve these problems.

A mixed approach (combining in-house and offshore specialists on the same project) can work wonders in cases where projects are outsourced while key specialists work in-house and most of the project team is situated offshore. With the world going mobile, it is easy to see that mobile development projects will be outsourced as one-off projects (to develop a mobile website or app for a business).

Single Contanct Point

One thing that I strongly suggest is hiring a project manager/business analyst/anyone at all on your side as a single contact point to connect us to your business. That’s one way to bring all the variables together to create magic. This helps us do our job, too, because the two managers interact on a professional level to meet quality, budget, and time requirements.

In IT outsourcing, decisions should be made on a case-by-case basis. Factors such as costs, level of security, quality of the end product, industry, and duration of the project should be carefully considered. A famous Russian proverb says: “Measure seven times, cut once,” and it is a good principle to live by when outsourcing.