This Checklist Helps You Hire The Best Software Outsourcing Partner
Posted on March 15, 2019
The global market size of outsourced services is over $85 billion. Hence one thing is for sure – it is a massive industry and software development is a major part of it.
Most of the businesses globally outsource to cut down costs and increase efficiencies. The results are rather disappointing, when one looks at it from a value addition angle – 80% of outsourcing relationships fail to deliver any collective value.
Would you really want to cut costs if they are more expensive than the capital you saved by outsourcing? The answer, obviously, is a resounding no.
So, how do you ensure you have the right software development company helping you get the product out of the door? Simple – here is a checklist of characteristics:
1. They promise value beyond cutting costs. If you are looking at an offshore vendor in Asia, you know it for a fact that they will be able to bring down your development costs. This works out because talent and technology are available at cheaper rates in their market. That said, any software developer can promise the same costs – how do you then choose between different partners?
You have to look for expertise and not just competence. There are a ton of software outsourcing solutions providers who promise the bare minimum to get your project rolling. You will get the maximum value for your dollar when your prospective partner has expertise in the area and hence can be a better partner than even your local vendors.
2. They have very strong referrals. In B2B markets, referrals play a very strong role. That said, these days, every single developer has a ton of referrals available.
Finding the right development partner based on the referrals they have can hence get tricky. So, focus on the following:
i. Look at the quality of referrals over the quantity: Which referral adds more credibility – one given by a vice president of a big commercial air carrier or one thousand given by unknown small businesses?
Usually, the bigger company’s referral has more value because it shows that the vendor can handle a project of huge scale and can satisfy multiple KPIs in one go.
ii. Look for referrals on employee level: Most of the software development companies focus on referrals for the companies. You can go to LinkedIn and check out a few profiles of the developers the company has. Here, you will get to see the industry expertise of the very people who will actually be working on your projects. This is where quantity of referrals coming from various sources can be of great value.
3. They focus on a niche of services. If you find a software development company in USA that is ready to take up any project you throw at it, there are very high chances that the company is outsourcing the project further to an offshore developer.
The most credible outsourcing partners have deep expertise in certain market segments like payment solutions, eCommerce or enterprise tech for a specific industry. This goes in line with the earlier given advice and helps you find developers who can add real value to your project above and beyond the mere cost cutting.
4. They are approachable at any time you reach out. More often than not, your implementation or project management team will find a bug in your software. They will try reaching out to your outsourcing partner and outline the problem very specifically.
In a reply, they will get an automated reply from the partner stating they will get back to you ‘soon’. Since you did not have any contracts defining ‘soon’ you are justify waiting.
For projects that have multiple levels of iterations, this can get very tedious and you might miss out on small but important feedback. Just because your outsourcing partner is in a different time-zone does not mean they take forever to revert.
If the outsourcing company does not put up a 24-hour business day revert in their response rate, it is a big red-flag. A potentially good outsourcing partner will be ready to promise you one day reverts and wouldn’t even be hesitant in the contract.
5. They are proactive in understanding your requirements. The ideal outsourcing partner will want the engagement to succeed – because that is the only way they will ever get more business. Hence, they will be ready to sit with you and define the exact deliverables of the outsourcing engagement.
That is the sign of a good outsourcing partner. A great outsourcing partner will go one level beyond that and ask you questions about your business to understand the real-life situations where the deliverables will be used. They will act more like technology consultants and less like software developers.
The ideal outsourcing partner will want to know more about the business case of the deliverables, have expertise in solving technological problems pertaining to your industry, would be approachable and have experience in dealing with big ticket clients. If your prospect shows these indicators, you can get started with the engagement.
Pros & Cons of Investing in Software Outsourcing Solutions
Posted on January 10, 2018
Outsourcing has come up as one of the best alternative solutions for the companies that look forward to hire new resources for a short-duration project. It is defined as an allocation of a project or a business process to an external service provider. A majority of times, the organizations cannot handle all the aspects of a project internally. In addition to this, some processes are temporary and do not have the intention of hiring in-house professionals for performing a particular task.
However, before you select a third-party vendor for Software outsourcing services for your organization, make sure to weigh both the positive as well as the negative aspects associated with it while outsourcing brings with itself a lot of advantages for a company, the pros associated with it cannot be ignored.
Advantages of Software Outsourcing Solutions
Let’s have a look at some of the pros of investing in software outsourcing-
- Opportunity to Strengthen the Core Business Process
Outsourcing allows the businesses to concentrate on their core processes rather than the ones which are of short duration. Since the dedicated resources will be aligned on major projects rather than the supporting ones, your company will have a chance to strengthen them and bring more profit for your company.
- Better Output & Quality
The projects are outsourced to the vendors who specialize in their own fields. Since the vendors have the specific equipment as well as technical expertise, they are better than the resources in the organization which is outsourcing the custom software development services. This way, the tasks can be completed in an efficient manner as well as drive better output.
- Reduced Operational Cost
Outsourcing eliminates the need of hiring in-house individuals and therefore the overhead costing, which includes recruitment and operational costs, can be reduced to a great extent.
- Risk Sharing Between the Vendor & the Company
Risk-analysis is one of the most crucial factors that determines the outcome of a process or a project. Outsourcing some components for your business process assists the company in shifting certain responsibilities from their dedicated workforce to the vendors. Since the vendor you are hiring is specialized in the services you have outsourced, the risk-mitigating factors will also be managed by them.
Cons of Outsourcing Offshore Services
Some of the negative aspects associated with outsourcing services from a third-party vendor are-
- Stretched Delivery Time Frames
One of the biggest disadvantages of outsourcing comes into play in case you do not choose a right vendor for your project. Some of the most common problems which occur are unsynchronized deliverables, inappropriate division of responsibilities and sub-standard quality of the output.
- Risk of Losing Confidential Data
This is yet another loophole which might turn the tables around and that too not in the favor of the company outsourcing the services from a vendor. When an organization outsources payroll, HR or any other personnel, the risk of exposure of confidential and crucial data of the organization becomes really high.
- Lack of Focus on a Particular Project
Since outsourced vendors cater to the needs of multiple organizations at a time, it might get difficult for them to focus on the project of a particular company or a client. This might not prove beneficial for the company as they expect efficiency from the experts at all points of time.
- Hidden Cost of the Services
While outsourcing services is a cost-effective solution for the companies and enterprises, the hidden costs that are included during signing a contract might end up in posing a serious threat if you are hiring an offshore software outsourcing company.
The Bottom Line
Keeping in mind all the advantages and disadvantages associated with outsourcing services from a vendor, it is advised to determine all the tasks for which you need an outsourcing company. This will help you in creating a clear-cut strategy of all your requirements from the vendor and will thus ensure that the vendor gets clarity. If you also want to Software Outsourcing Services from a vendor, then you can get more information about the software outsourcing in California, from Octos Global. To know more about the services offered by the company, Contact us
Tactical Software Outsourcing vs Strategic Outsourcing
Posted on August 24, 2017
What is the difference strategic vs. tactical outsourcing?
The difference lies in the relationship that you create with your vendor. Clients choose to outsource as it benefits them in both ways – strategic and tactical conditions. As long as the client is aware of the advantages and disadvantages of the process, and well one particular subject than outsourcing can be very successful.
Tactical Software Outsourcing
In some situations, you may need help for few months or quarters. These types of situations include meeting deadline, limited availability of specific resources or to bring the project back on track. These are the tactical reasons to outsource; these are the opportunities considered good, to begin with, the long-term relationship called strategic relationship.
Strategic Software Outsourcing
In the Strategic Software Outsourcing pairing of the vendor and client is the most important aspect. How close are you with your vendor? Are you an important client for your vendor? Do you have access to the management team? A vendor for a $1000K per annum relationship is different than the $5M Per annum relationship with the vendor, they both may look similar.
Closeness with the client is another important factor. When things go wrong, you can meet the client/vendor face-to-face and bring things back on track. For that matter, local presence is another important factor. Also, if the vendor has their own facility in their nearby local areas or they have low-cost destinations like India, Philippines, Ukraine, it is an added advantage.
Lastly, demonstrated capability plays a vital role. Has the vendor successfully delivered to the companies like yours?
What is Software Development Life Cycle and How Does it Affect Outsourcing?
Posted on June 24, 2017
Software Development Life Cycle is the process of developing software that serves as a standard in the IT industry for designing, development and testing of high-end software according to customized demands and expectations of a client. SDLC aims to achieve the final result while keeping a control on deadlines as well as the costs associated with development. SDLC is a step by step mechanism that serves as the broad plan for software development and is used by high-end software development firms for developing particular software or enhancing the value proposition of the same. Software development life cycle follows the following crucial stages for developing software:
- Stage-I: Requirement Analysis & Planning
First and the most important stage of SDLC requires careful planning by senior members of software development team who after taking inputs from the client, sales division, market surveys and niche experts come out with a detailed plan for conducting different feasibility checks for analyzing the product viability. Planning requires careful analysis of various technical, operational and economical factors that can impact the success of a development project.
- Stage-II: Defining Specific Product Requirements
Once basic framework is laid down, the next step involves clearly laying out and documenting the product requirements. After clear documentation, client approval is sought or a product is approved by market analysts using a SRS document consisting of various product requirements for design and development.
- Stage-III: Product Architecture Designing
After SRS is documented, it serves as a basic reference document for product architects using which product architecture is developed. The product architects propose multiple design approaches and document the same in Design Document Specification (DDS). The DDS then is reviewed and assessed by various stakeholders on different parameters and one design approach is selected in the end. The design approach defines various architectural modules along with various representations along with third-party modules.
- Stage-IV: Product Development
After all the documentation, actual product development starts during this stage. A programmer uses DDS to generate a programming code that fulfills the different requirements from a product. Program developers follow stringent coding guidelines to write down code that are defined by an organization. Also, programmers use different programming tools for generating codes using one of the various high level programming language according to product requirements.
- Stage-V: Product Testing
The testing stage involves testing the products for perfection according to pre-defined quality standards. Various product defects are tracked, reported and are fixed during this stage and the final product is retested for perfection according to standards defined in the SRS.
- Stage-VI: Product Deployment & Maintenance
After product development and testing, the final product is deployed for usage in the markets. A product is deployed according to the business strategy of an organization- either in limited segment or in real business environment.
There are a number of SDLC models that follow unique steps for successful software development. Based on the SDLC model finalized, software development life cycle impacts development outsourcing in multiple ways. The project timelines, risk factors involved, resources used, final ROI for client and security of the data pertaining to a project are the basic factors that impact outsourcing based on the SDLC model finalized.
We at Octos Global ensure that we provide the right advice in the form of relevant consultation regarding an accurate SDLC for the development of software according to customized demands. Our careful planning, agile development methodology and highly-experienced team help you with the decision regarding the correct SDLC model saving your time and cost related to software development.