Best Practices for Outsourcing Development in 2024

Have tried outsourcing development?

or

Are you looking to outsource the development of your website?

Then this post is for you, you can learn the best practices of Offshore development.

IT outsourcing has taken a clear path as a viable option for outsourcing development in many organizations. There are many benefits of offshore development such as reduced costs, reduced business risk, focus on mainstream business, and reliable experts among others. However, prior to adopting IT outsourcing, it is important to consider the following options (practices) which will ensure that you reap the maximum benefits.

Project Definition and Expectations

Some IT managers may believe that project plans are overrated/exaggerated and working without a project plan is still good as long as the project gets delivered. This is a very dangerous route to take and sometimes may lead to business suffering losses since the third party might have hidden costs which would have been disclosed in the project definition stage.

Other business aspects that might be affected besides costs are delivery timelines. Delivery timelines mean a lot for IT offshoring. An IT team that delivers projects on time saves a lot in terms of money and go live dates. Delivering on time gives room for sufficient testing and training. It is important to communicate your project details in a detailed manner as possible. Even if not all requirements will be defined at startup may be a due need for change in development, try to capture as many details as possible.

Partner is Better than Vendor

There is a sharp contrast to how a vendor perceives your business and how a partner perceives your business. Most partners treat your business as theirs and they understand the importance of your customers. Most partners have the same customer perception as yours, and as your business prospers they are also guaranteed their business will foster. It’s like if you can build a good relationship you can also build a business. While in contrast, most vendors perceive your business as a money making cash cow. Profits mean everything to them and hardly will they give you credit delays when your business faces cash flow problems. It is easier to build a long-term relationship with a partner than a vendor.

Onsite/Offshore Decision

Some IT jobs have a little security risk if outsourced whereas others expose your business to risks when outsourced. IT projects such as ERP implementation and support have no big risks outsourcing and having an offshore support. IT projects such as server administration would be entirely riskier if the job would be entirely outsourced. There exists many risks and business may face severe downtime if there doesn’t exist on onsite IT consultant to help troubleshoot and maintain the physical servers. Businesses are different and the kind of risks they face are also different. Therefore it is advisable to say IT projects that are risk sensitive to a company should be dealt in-house/onsite and IT projects that have little risks to business would be best outsourced and done from offshore. I will recommend you to go to Software Development Company or a firm which is reputed.

Suggested:

Why should you Outsource?

Peg Payment to Milestone

It is always prudent to split the project into phases/milestone and pay the contractors/partners according to milestone achieved. Splitting the projects according to milestone will make sure the contractor doesn’t delay the project since the contractors will need their invoices paid. At the same time, it will save you a big deal in case the contractor fails to deliver. You will have only paid the contractor the part that he delivered.

Milestone also keeps the team focused and on track, working on a project that has 5 phases will keep the team focused rather than working on a project without any milestones. Working on a project with phases will keep you highlighted on the where the project is, where the project is lagging and what part of the project is pending.

Communication

Communication means a lot for IT outsourced projects. A formal channel of communication is always good and should be maintained. Where there is an established form of communication, it ties parties to the agreement that was made in communication. If the mode of communication would involve developing a custom software whereby users raise tickets for problems they encounter, then that should be followed.

In essence word of mouth, communication should be least used since it is not binding and most of the times it is not documented. In an effort to establish a more clear communication, business should conduct an onsite visit to the vendor prior the kickoff of the project. It is preferable rather than the use of emails. An official visit to the vendor which has representatives from both sides will enable the participants of the meeting to have a firsthand view of the whole project. This will enable parties to understand the pain points of the project, processes and other important elements of the projects which certainly its impact is greater than just replying to emails.

Suggested:

Ways to communicate effectively.

Documentation

Documentation is a necessity in modern day outsourcing project. It helps to keep track of what process was followed during system build up. It helps in troubleshooting problems and easy transition from one vendor to another. Documentation helps both parties and is an essential part of IT offshoring especially for projects that would involve a contractor to develop/configure a software. A standard layout should be used. Most software giants such as IBM, Oracle and Microsoft have a standard documentation template which IT contractors can use.

Enforce a non-disclosure agreement

A non-disclosure agreement is a necessity for IT projects that are outsourced. An NDA would help to resolve legal disputes in case a party to the agreement breaches part of the NDA. An NDA helps the contractor not to suffer damages for intellectual property that could have been shared with the business. Custom software applications that might form part of the agreement need an NDA signed for them as well. Business outsourcing their services need to enforce an NDA to prevent the contractor from exposing private information or data to a competitor.

An NDA helps vendors from suffering losses as a result of business repurposing their work. Informing part of the NDA, you should involve a lawyer in both jurisdictions to ensure that the NDA is binding and enforceable in both jurisdiction.

Conclusion:

I have tried to share the offshore/outsource practices for hiring developers. I would love to know your opinion in the comments. Although, I am sure that the above practices will help you.