Are you Really Ready to Outsource?
Outsourcing is a very powerful phenomenon that, when used effectively, can not only enable substantial savings, but can also bestow speed, accuracy and several other benefits. However, when used without proper understanding, it can backfire and lead to losses that negatively impact the business. This is why one should indulge in a thorough research to understand if outsourcing is suitable for you and to know if you are indeed ready to begin an outsourcing initiative.
Assess your outsourcing objectives
Some of the benefits that entice companies to outsource are, the liberty to focus on core competencies, cost savings and enhanced profitability. However, irrespective of the anticipated benefits, you may not be actually ready to outsource. Moreover, something that worked for another company may or may not work well for your organisation. To be sure, you must assess the pros and cons of outsourcing and verify that your outsourcing objectives are measurable, actionable, result-oriented and time-bound. Do not overestimate the benefits, be prepared for the initial negative financial impact, which is very likely.
Define the scope
Once you assess the objectives and benefits, the next step is to define the scope. In an outsourcing agreement, it is crucial that the expectations regarding input and output, milestones and timelines are well-defined. Demarcate the success criteria for the vendor as well as your in-house team. Leave no scope for ambiguity regarding the budget, timelines and quality goals of the project/process. Unless you have all these aspects in place, you are not quite prepared to outsource yet.
Check that internal processes and procedures (required to support the outsourcing team) are in place
Check that you have a sturdy Software Development Lifecycle/Methodology (SDLC) in place and whether it is adjusted to accommodate the outsourcing impact. All the control systems, automated systems, ticketing systems, knowledge sharing and management tools should be in place and able to support distributed development. A metrics framework for controlling the outsourcing engagement has to be in place if you have decided to engage with a provider and want to be ready to outsource.
Last but not the least; confirm that you have the necessary funds to bear the cost of establishing an outsourcing contract, allocate funds for the vendor search, start and ramp up, retention, operations and change management. Additionally, it is important to have legal support before you get into contract negotiations and progress to the drafting of the contractual framework.