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Seven Steps to a Successful IT Outsourcing Project: Insider’s View

There are many benefits to outsourcing IT services that can empower and grow your business. Many software vendors and enterprises have employed outsourcing as a strategic plan to keep pace with technology and support evolving applications, many of which are moving from legacy enterprise services to cloud-based applications.

Whether you are interested in outsourcing business analysis, architecture, development, or quality control, there are a number of mission-critical services that can be successfully handled by a strategic outsourcing partner. Services such as public facing web applications, mobile applications, business intelligence, and other applications supported by a cloud-based SaaS model are ideal for a partner to develop and support.

The issue today isn’t whether outsourcing is a viable business model – indeed it’s proven to work for numerous companies. The issue is how to select a partner, integrate the teams and manage a successful relationship.

The following summarizes the framework for software vendors and enterprises to create a successful working relationship with a strategic partner.

  1. Choosing Your Outsourcing Partner

    When selecting a partner, evaluating proposals, and interviewing staff, it’s is important that an outsourcing partner has an IT background that meets your organization’s unique technical needs, as well as the business domain necessary to help meet the business goals and future demands.

    Price is always an important element of a business discussion, but shouldn’t be weighed above all other criteria. Low rates can be misleading and possibly a sign the prospective partner is not fully equipped or underestimates the level of support required. 

  1. Preparing for an Outsourcing Project

    When beginning a project with your partner, there are a number of things to consider, such as preparing a product vision presentation and outlining non-functional and system-level requirements. Expected availability, performance characteristics and security requirements are critical to establish before engaging with a partner. These details will be finalized and addressed with the architecture traits during the Discovery phase discussed later in the post.

  1. Why a Partnership Model is most successful

    Outsourcing models can range from a project model that terminates when a project is completed, to a long-term relationship or dedicated model that begins with an initial project, and continues with multiple projects in the future.

    If a product is planned for long life and evolution, or it is subject to laws or government regulations, and also if it is based on complex logic or extensive domain knowledge, long-term outsource relationships are usually more advantageous. Long-term partnerships have an advantage of affording the outsource partner more control over the development process, architecture, and other aspects of the project that often result in better product quality, as well as allowing your organization to focus on the business goals. 

  1. Supporting the Outsource Process

    The first item in building a team is the decision on a collaborative development process model, most likely a form of Agile. Odds are the partner will already have an experienced Agile development process and experienced managers to enforce them.

    If your organization doesn’t use Agile, a common set of standards that both organizations can effortlessly support is required. 

  1. Effectively Communicating with Your Outsourcing Partner

    Communication and collaboration are fundamental to the success of any relationship, and outsourcing is no exception. Establishing tiers of communication is important to a long-term business relationship. This will allow the teams to respond and reasonably react to changes in a project without compromising business goals and objectives.

    Email, chatting, phone and video conferences, as well as live desktop sharing and face-to-face communication can all work well. Communication plans and toolsets should be agreed upon during the Engagement Phase.

  1. Strategic Management of Your Outsourcing Relationship

    With a long-term partnership approach, the outsourcing partner has the essential communication and collaboration framework necessary to lead the development process, allowing your organization to focus on the business goals.

    Strategic management includes, but is not limited to defining a clear project scope, establishing a release schedule, and removing development bottlenecks.

    To maximize success, your company should assign an architect or technical leader to manage technical issues in a timely manner. It’s critical to oversee development issues such as authentication, authorization, access permission and audit models implemented in a solution. Additional areas that are worth special attention include transport security, industry specific protocol implementations, and error handling. 

  1. The Importance of Discovery

    The outsourcing process can be looked at in three broad project phases – Engagement, Discovery, and Implementation. While all three phases are important and require dedicated attention, I here we would like to emphasize importance of the productive Discovery phase for the success of the entire project.

    The Discovery phase identifies the scope of a project and includes deployment models, technologies, SLA agreements, and required integration with external systems.

    The result of the Discovery phase includes a comprehensive report and plan for the Implementation phase of a project. These artifacts address architecture, communication, and management aspects of the project at hand. Thus the Discovery prepares quick and smooth Implementation start and guarantees the commitments for the successful project completion are based on the firm foundation.

Final Thoughts

The guidelines above summarize a seven-step framework for software vendors or enterprises to create a strong working relationship with a strategic partner. They can be referenced when your organization is selecting, establishing, and managing an outsourcing partnership.

What are your thoughts on this framework? Is there anything you could add from your experience? We will be happy to hear your comments and respond.

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