What to do when choosing IT Outsourcing Provider

IT Outsourcing is the answer for cost reduction and domain expertise for some particular industries, which can facilitate consistent application of your requirements.

The benefits of IT outsourcing are pivotal to the development and digital transformation of one business, but to choose a capable IT Outsourcing provider with a strategy and development plan tailored to your requirements is no easy task. You have to follow these steps to find yourself the best-suited vendors:

Define objectives, goals, scope for your IT Outsourcing project

There is no one-size-fits-all approach for business in IT Outsourcing, no matter what sector you’re working in. Even for businesses in the same industry, the approach for IT Outsourcing varies, depending on the scope, objectives and goals of different companies.

Define your goals – Choosing IT outsourcing provider

To successfully manage the outsourced project, the first and foremost thing to do is to define what your business wants to achieve when outsourcing. A checklist of the project structure, features to develop, functions to be outsourced and evaluation criteria should be made.

Once these are identified, your business can both know the expected outcomes for the outsourced project (for internal evaluation) and the criteria for the project’s effectiveness.

With the detailed specifications of what to be outsourced and whatnot, your business can further devise the agenda and HR allocation for the next step of the outsourcing project. A set of roles and responsibilities within and without your business is also a metric for better management.

For the best outcome, businesses are advised to work with the providers with the same goals or have experience working with the companies in the domain.

Clarify how you want to outsource

The clarification of how you want to outsource should be addressed based on what you want to outsource. The goals of your IT Outsourcing project should also be considered in this step to choose the right IT outsourcing vendor.

Know how you want to outsource – Choosing IT Outsourcing Provider

There are many engagement models for businesses to work in IT Outsourcing, and you can take a look at the three main ones as follows:

Time & Material

The Time & Material model only requires general and basic requirements of the project. The IT Outsourcing provider will form a dedicated team just to work on this project. Specifically, this engagement model is perfect if you’re doing a project with complicated or non-predefined requirements. Throughout the process, you might want to add more features for the Outsourcing team to work on, hence generating more costs during the process. This model is designed for long-term projects with frequent updates to be carried out.

Project-based

The project-based model is the engagement model tailor-made for small and mid-size projects which have solid requirements. Every feature is noted for the outsourcing team to work on. Since the features are unchanged during the process, the budget is fixed. In case of any changes, the whole project will be re-estimated with a new contract. The project-based is usually for short-term projects.

BOT

BOD, or Build, Operate and Transfer, is a popular engagement model, in which the IT Outsourcing Provider carries out all tasks, and the outsourcer’s in charge of giving requirements. After a while, based on the team’s performance, the business will decide whether they want to take over the whole project.

When outsourcing, businesses should also consider the strategic approach and the transitional approach. With the strategic approach, a long-term relationship in which both parties invest to develop partnership. With transitional one, IT outsourcing is applied for an IT infrastructure upgrade. While the Outsourcing team manages the system, the in-house team takes care of the new technology.

Evaluate the quality of the IT outsourcing provider

Once you’ve decided what you want and how you want things to be done, it’s time to find the right partner for your business. Regarding the quality of the IT outsourcing provider, you should put into mind the following:

Talent quality of the IT Outsourcing provider: For different IT projects, it requires different skill sets of programming language, management tools, etc. This is the reason why you should identify which skill sets are necessary to find the best-suited service provider.
Infrastructure quality of the IT Outsourcing provider: The infrastructure includes physical infrastructure, device lab (for software testing service), wi-fi, the internet, etc.
Work process: The work process varies for different IT outsourcing providers, but it should comply with the international standard and adapt to the clients’ requirements.

Evaluate quality – Choosing IT Outsourcing Provider

Data security and confidentiality documentation: Intellectual Property Rights and Patents should be clarified. It would be best to ask about the physical layers of security (with or without biometric scanner and lock), staff confidentiality, legal documentation, etc.
Experience in the field: It’s not about the general experience. It should be the experience in your domain.
Language competency for communication is a must for project efficiency.

Set up a team of tech leaders for management

Even your business’s focus is not the technology itself, you should always have an in-house team of 2-3 personnel to manage all IT operations.

Set up a team for management – Choosing IT Outsourcing Provider

This team takes full responsibility for the project, hence being in charge of the communication with the IT Outsourcing provider. The project’s outcome lies in their hands. To do this, your business should allocate HR for at least a project manager/product owner. He/she will take matters into their hands by writing a handbook of terms, specifications and notes for the whole project. This is the shared documentation/a standard point on which every operation is based upon.

Also, during this project, weekly/monthly reports are issued for those who are involved. The project manager should pay much attention to this.

With this checklist, you can find the basic information for your business to consider when it comes to choosing an IT Outsourcing provider.

If you don’t know what to start in this, LQA can help you. Contact us for more information: