Digital transformation of businesses worldwide is happening at speeds never witnessed before. Given the rapidly changing technology landscape and consumer expectations, it is no wonder that the faster an organization moves, the likelier it is to succeed. According to a study by staffing company ManpowerGroup, “around two thirds of businesses surveyed from around the world reported having difficulty in hiring”. Surprisingly, employers in traditional outsourcing destinations like India faced the highest difficulty finding the right people. In this perpetual and fast-paced transformation, relying mainly on in-house IT talent can be costly. When each minute matters for clients, filling a position in months is unacceptable. Furthermore, insourcing comes with the added risk of a dated talent pool and long-term fixed costs. Thus, the natural answer to resource scarcity is IT outsourcing.
Addressing the Shortage of Talent With IT Outsourcing
IT outsourcing gives businesses access to the global talent pool when insourcing fails. Thus, assembling a team of IT architects, designers, and software engineers with broad and deep expertise can take weeks instead of months. Gaining access to essential skills for your project allows you to implement the right features with the appropriate technology. You might have to tailor the project to your organization’s internal skillset without IT outsourcing. Furthermore, an IT outsourcing partner offers high flexibility for up and down-scaling. The specialists they assign to your organization can design and create the right product for you at the pace you need. When the project enters the maintenance stage, you can reduce the team size to the bare minimum.
What to Look for When Choosing Your IT Outsourcing Partner
The Experience of the IT Outsourcing Provider
You will look for an IT outsourcing provider when your organization needs additional expertise and experience. Therefore, making sure your shortlisted providers can fill your gaps is critical. Consequently, you should assess the technical know-how of the provider. If your personnel cannot handle this step, request assistance from an IT consultant. Next, verify if the IT outsourcing provider has implemented projects like yours. In addition, check the breadth and depth of their experience with solutions for your industry. While industry expertise may seem crucial, it is far less important than technical know-how. Equally important to the provider’s experience is their proven positive track records and happy customers. Therefore, find out if the provider has clients who have used their services for at least five years and request referrals. Besides, check quotes and case studies.
Up-to-date Technology and Infrastructure
The IT outsourcing providers you shortlist must equip their developers with up-to-date software and hardware. Thus, you will at least have the guarantee. Furthermore, ensure they have good infrastructure and effective data security measures. Ask specific questions about the provider’s security measures, internet speed, and bandwidth. In short, make sure your potential partner is well equipped to work efficiently.
Organization Size
The larger your IT outsourcing provider is, the higher your chance to fill your vacancies fast and with the right people. Make sure you correlate the size of your project with that of the provider. Naturally, large companies can attract talent easier than small and medium-sized firms. Thus, if you are on tight deadlines and need a fast ramp-up, go for a large company. For a small project that is unlikely to grow, it makes sense to avoid a large partner. Make sure your project makes a difference for the IT outsourcing provider. When this happens, chances are high that you get the best people for the job.
Financial Stability
Alignment of Values with the IT Outsourcing Provider
Any good relationship requires alignment of values between the partners. IT outsourcing makes no exception to this rule. To build a long-lasting partnership, you must have a solid foundation to build on. That foundation includes common values and driving factors. Since the IT outsourcing provider’s developers become part of your team, they must blend in quickly and seamlessly. This can happen when the two companies have compatible missions, visions, and processes. Thus, they must have similar motivators and consistent employee motivation and retention approaches. Only a provider that understands what makes your company tick and approves of its values can contribute to its success.
The Quality of the IT Outsourcing Provider's Specialists
Any company wishes to attract people with the right set of skills and high motivation. Given the high demand for technical people, it is not feasible to fill up all your positions locally. Therefore, you need a strong IT outsourcing provider that can complement your team with quality people. While providers will not accept a typical recruitment process for the team they allocate to your project, you can test the relationship with a small assignment. This approach allows you to assess the quality of the provider’s developers, the communication process, and the cultural affinity with the provider.
The Work Environment of the IT Outsourcing Provider
Getting good people from the IT outsourcing provider is only half the story. These people can deliver the results you are after if they have the right work environment, career opportunities, and balance between work and personal life. When assessing the provider, start by checking their offices. People need a cozy workplace, ample space per person, good lighting and soundproofing, and meeting rooms for different team sizes to be productive and relaxed. Then ask questions about the measures they take to ensure a healthy balance between work and personal life. Remember company perks such as paid subscriptions to gyms, and sports centers, medical insurance, family support and care, and opportunities for personal development. You should pay attention even to the number of office parking spaces available for employees.
Meeting Legal and Regulatory Requirements
Be sure to include compliance with legal and regulatory requirements from your due diligence. It is essential to determine if your prospective IT outsourcing partner has a clean record with authorities, clients, and providers. The outsourcing provider needs strong, coherent, and well-implemented processes to avoid trouble. Furthermore, they must have an experienced management team, good legal consultants, and project and quality management specialists. If they serve clients residing in the European Economic Area, assess the provider’s compliance with the GDPR. Strong management, processes, and practices at the IT outsourcing provider keep your risks at bay.
Questions to Ask When Screening Your IT Outsourcing Partner
There are many areas you should pay attention to during the screening process. First, assess the technical expertise and experience of the provider. This check should include technologies and previous exposure to your industry, certifications, industry-specific processes, and accreditations. Furthermore, make sure to include team stability, flexibility in up- and down-scaling, the communication process, insurance coverage, and guarantees. We will explore them one at a time and suggest you a few good probing questions.
Questions About the IT Outsourcing Company
- How long have you been in the outsourcing business?
- What makes your company unique in the IT outsourcing landscape?
- Is your company present in any important national and international rankings? If so, please give us a few examples.
- Where are your software engineers working from?
- Can you please tell us about your internal training program?
- To whom can I send my feedback on your company’s services?
Questions About the Experience of the IT Outsourcing Provider
- What relevant industry and technical certifications does your team have?
- Can you give us some examples of IT outsourcing projects you completed successfully in our industry?
- Have you successfully completed any projects using the technologies we need for ours?
- What are your top client references for projects similar to ours?
Questions about the IT Outsourcing Project
- Can we meet key members of your team before signing the contract?
- Will you send key members of the project team over to our site for project kick-off?
- How soon can you replace a member of the project team that leaves your company?
- Do you consider using subcontractors for our project?
- Can you please describe the typical communication process your company uses in a project like ours?
- Can you guarantee that you will not willfully move people from our projects to projects of other clients?
- What will happen if our needs change during the project?
- How fast can you scale the project team during peak periods?
- How often will your project typically have video calls with ours?
- Will we get training and documentation from your team?
Questions About the Account and Project Management
- What software development methodology does your company prefer?
- Will you assign an account manager for our relationship?
- How will we be able to reach the account manager?
- Will the account manager attend the project meetings?
- Will we need a project manager from your company for each of our projects?
- What is your typical escalation process for problems with client accounts?
Questions About Risks and Guarantees
- Does your company have a business continuity plan?
- What potential risks do you see in our first project?
- Does your company offer free bug fixing for errors caused by your team?
- Will you offer maintenance services for projects you deliver for us?
- What types and level of liability insurance does your company have?
Questions About Your Involvement in the Project
- What do you expect from our people during a project?
- How much time do you expect our product owner to spend with your employees in a typical week?
- Do you expect us to define the project requirements with the end customer of the project?
- Will you give us deadlines?
Questions About the Contract
- Will you accept to use our standard contract for the commercial contract?
- What is the minimum notice you accept for contract termination for convenience?
- Would you charge us for terminating the contract sooner than the contract allows?
- Will your people sign a contract with us for transfer of intellectual property to us?
- Do you accept to have your people sign non-disclosure agreements with us?
- Does your company accept to limit the rate increase per year to the expected yearly inflation?
- What services will our contract cover?
- What guarantees do you offer for your performance?
Questions About Data Security
- How do you ensure physical protection of confidential information?
- What are the main organizational security measures in place at your company?
- How does your company ensure the integrity of its systems and services?
- How do you safeguard your systems against disruptions?
- Can your company set aside a separate, access restricted office for our project?
- Do all your employees, agents, and consultant sign non-disclosure agreements with your company?
- Do you organize periodic training sessions on data security and personal data processing for your staff?
Conclusions
This article gave you a glimpse into the aspects you should consider when choosing your IT outsourcing partner. First, you should pay attention to the experience of the provider. Equally important are its up-to-date technology and infrastructure. The next aspect highlighted is the company’s size, which significantly impacts big projects. The provider’s financial stability, values alignment with your company, and the quality of its engineers should also be on your checklist. Finally, pay attention to the prospective partner’s work environment and ability to meet legal and regulatory requirements. The last part of the article offers lists of sample questions you should use to screen providers.