What to Look For When Choosing an Outsourcing Partner

In the United States, the 1990’s was a time of huge hi-tech growth – where offshore outsourcing opportunities reached new heights and achieved a high level of success, with IT services moving to India to tap into top talent. During this time processes were moved to Asian countries and the launch of the North American Free Trade Agreement in 1993 was signed by the United States, Mexico, and Canada as a way to embark on the biggest trade undertaking between these countries that would result in increased economic growth output, create numerous jobs abroad and build foreign direct investment.

The U.S., Mexico, and Canada wanted to build long term international partnerships, outsource business processes to help companies operate efficiently. Move parts of manufacturing and tedious operations overseas to seize advantageous outsourcing opportunities by neighboring countries.

  • More than half the IT outsourcing projects are not delivered on time, exceeds budget and project management timelines are constantly moved, causing expensive realignment of project.
  • Remember to choose a vendor wisely and ensures successful project timelines and task dates are in chronological order of events.
  • Clear communication and project/product activities are understandable and documented by a project manager.
  • Know what tasks need to be accomplished within the project scope and deliver dates are agreed upon by both parties.
  • The duration of tasks and dependencies between tasks are added to Ganttt chart timeline and project management tools are used for transparency and smooth project execution.

Today, global outsourcing is at 92.5 billion U.S dollars in revenue and companies are now using outsourcing strategically for access to specialized skills such as energy, healthcare, pharmaceuticals, travel, transport, telecom, and media. Organizations can focus on solving capacity issues, business management, budgeting, planning and production and the creation of goods and services.

Outsourcing other functions include

  • Content writing
  • SEO, marketing
  • Web designer and programmers
  • Personal assistants
  • Tax preparers
  • Web development
  • Designing mobile applications
  • Drafters
  • Human resources
  • Security guards
  • Call Centers
  • Medical and Computer Professionals

It is estimated that 800,000 jobs moved to Mexico due to lower base wages and less strict business regulations. Organizations outsource for many reasons but mostly it’s to reduce costs, so they can build a strong core business and hire highly skilled tech talent since it’s very expensive to hire locally.

  • Offshore outsourcing services have been around for decades and many organizations it’s a step in creating advantageous opportunities-built on improved services and profitable partnerships to cut costs and access new markets.
  • Outsourcing leads to a higher return on investments and increased speed of delivery; however, for others, it’s deeply alarming as US employees know only too well that layoffs, reduced workforce, and displacement of jobs are in their future.
  • Acquiring technical experts its affordable and easier to acquire top talent.
  • Improves the global marketplace and businesses can hire in emerging markets and can help their business be more competitive.

Today, top executives are looking to onshore, offshore, nearshore and right shore outsourcing services to…

  1. Modernize their legacy system and move to a cloud computing system
  2. Build high-quality mission-critical applications
  3. Develop operational modifications, improvements and upgrading platforms
  4. Information Technology and new technology implementations

How does businesses choose which service is right for them? It first depends on the type of work that is needed or if it’s project-based work, application design or modernizing legacy systems. Businesses are outsourcing 68% of consumer products companies are outsourcing their workforce with 300,000 positions moving overseas which accounts for $85.6 billion of the global market.

The number one reason organizations look to outsourcing is to reduce expenses, acquire expertise and having their business run 24/7 is a strategic move.

Look for a Strategic Technology Partner that has these skills, competencies, and expertise:

  • Building reliable infrastructures
  • Experience in cloud migration
  • ERP, CRM, and SFM
  • Skilled in mobility, security, social media
  • Competence in compliance, omnichannel
  • Aptitude for big data, digitization and enterprise collaboration
  • Talent in infrastructure modernization

Which Outsource Service is Right for You? What should you be Concerned About?

  1. Language – Does the production team, programmers and engineers speak English clearly and fluently. Are they easy to understand and communicate with and can they document what is agreed upon?
  2. Time Zone – Texas, Florida, California, and Costa Rica have a 1-2 hour difference. Is this important to your team? Then, choosing onshore instead of offshore should be considered.
  3. Development – Does the nearshore team resemble Silicon Valley expertise?
  4. Simplification – Documents, reports, and communication simple and easy to understand.
  5. Knowledgeable Project and product management teams. Easy reporting and expertise in the project.
  6. Cost Reduction – Nearshore can help reduce production costs and using Costa Rica instead of China or India is more cost-efficient. Convenience, accessibility, and geographic area should be considered.
  7. Location – Where is the partner located? Is location a factor and does it need to be local or can a surrounding country be sufficient? If its more than 3-4 hours difference, working together could be a challenge.
  8. Working Version – Can you see the working version of the product after each change is implemented?
  9. Samples Available – If they are a good outsourcing company, can they give your team – code samples to check the quality of code?
  10. Innovation, Culturally Aligned – Can they deliver deep and new technology-driven by innovation that is culturally sound.

Keep Moving Forward with Aptude

Aptude is your own personal IT professional services firm. We provide our clients with first class resources in a continuous, cost-containment fashion.

Our support services will free up your senior IT staff from the overwhelming burden of day-to-day maintenance issues. Now they’ll have time to launch those new projects and applications you’ve been waiting for. Simply put, we can free up your resources and contain your costs. Let’s have a quick chat to discuss our exclusive services.

CONTACT US

Keep Moving Forward with Aptude

Aptude is your own personal IT professional services firm. We provide our clients with first class resources in a continuous, cost-containment fashion.

Our support services will free up your senior IT staff from the overwhelming burden of day-to-day maintenance issues. Now they’ll have time to launch those new projects and applications you’ve been waiting for. Simply put, we can free up your resources and contain your costs. Let’s have a quick chat to discuss our exclusive services.

CONTACT US

Outsourcing Options

On Shore

Onsite is another word used that means a team working temporarily within the physical office while the project is in process. Companies will hire domestically and find skilled workers locally and top talent from companies within the United States.

  • This service is most expensive however offers convenience, speed of execution, same language and time zone, zero cultural barriers and high-quality work and low-risk investment. Same country and they understand U.S clients and have similar missions and goals.
  • Your company can save 10-15% since you will save on office space, employee benefits, no travel or limited, reduced software development expenses.
  • Your team can meet the programmers in person and have hands-on with the project and the agreement laws are governed by your home country.
  • Hourly rates can be as high as $100 hour and talent is difficult to find for certain projects.

Off Shore

Businesses look to pull resources from countries such as India, China, Taiwan, and Malaysia.

  • The partner is the most cost-effective, labor cheaper and work and processes are handled in a remote country. Real cost savings from Latin America, Eastern and Central Europe, Baltic States and Asia. Developers’ hourly rate ranges from $8.00 per hour to $50+ per hour for Finland and Estonia workers.
  • Reduced software development costs up to 50% less. Hire an experienced Project Manager by the vendor and remember cultural differences sometimes lead to misunderstandings, prolonged deadlines, and contract issues.
  • Client needs to have fluent English and US knowledge, extensive experience and time zone proximity should be considered. The time zone is 12 hours or more and communication is more difficult

Near Shore

Companies hire talent in a neighboring country or with the time zone that is within a 2-hour window.

  • Hire a workforce that is located in Latin American countries, from Mexico to Columbia.
  • Organizations can access a pool of talent and acquire a higher quality of work, easy access to countries; convenient traveling to your destination is only a few hours away. Neighboring country.
  • Communication is a breeze, same time zone makes working together easier and more efficient interactions and on the spot consultations.

Right Shore

Right Shoring is a combination of all the services working together and restructuring a global workforce to use off-shoring, on-shoring, and near-shoring simultaneously.

  • High levels of work and project efficiency and high productivity.
  • Strong market presence and the number of completed projects is strong since there are so many services working together.
  • The scope of services is numerous and using various technologies creates and effective project management and product development process.

How to Successfully Work with Procurement Outsourcing Company:

  1. Purchase a list of providers of offshore partners in the country your company is targeting.
  2. Put together a marketing package describing your business services, reputation, and mission, add customer success stories and add existing partners you currently work with.
  3. Start with direct communication via conference call.
  4. Document everything on a spreadsheet on what is agreed upon between both companies.
  5. Check to see if you and the outsourcing company have some customers in common.
  6. Explain in greater detail your need and requirement and what problems you currently are struggling with.

What Questions to ask when selecting an Outsource Partner for Software Development?

  1. Do you want to outsource the entire software development process or just parts of the coding, design, and testing?
  2. Do they have basic design aspects of IP networks guide and implementing new IP networks or redesigning existing IP networks?
  3. Can they project focus on internetwork and transport layer issues such as address and name management, routing, network management, security, load balancing and performance, design impacts of the underlying networking hardware, remote access, quality of service, and platform-specific issues?
  4. Can they successfully build application design aspects, such as e-mail, gateways, web integration and the design of an IP network?
  5. Do they experience in web integration and can briefly talk about the influence of the design of an IP network. Executing Transmission Control Protocol/Internet Protocol is essential.
  6. How many years of successful experience does the partner company have in design, coding, testing methods?

Take into Account before Hiring a Partner

  1. Is your culture similar to how our team is comfortable working?
  2. Is your company ethics similar to our company?
  3. Can the partner provide references, billing model and rates?
  4. Can your team create a prototype, if so will you agree to our request?
  5. How do they deal with unexpected situations, urgent issues or problems within the project?
  6. Can we do a small test project? Before we agree to the big project.
  7. Can you supply us with a copy of your portfolio of completed work and successful projects?
  8. Have you done a similar project to our project?
  9. Can you successfully scale teams and react to problems and demands smoothly? Please give me an example?
  10. Do the partner’s team and developers meet your business needs and do they know what you want? Can they reiterate the project details?

Preparing and choosing an Outsourcing Partner for software development:

  1. Talk to some of their clients and look for testimonials and customer reviews.
  2. Contact their previous partners and ask them about their communication style.
  3. Ask the past customer if they keep promises.
  4. Have a one-on-one with their development team.
  5. Do they have clear and concise English and good communication skills?
  6. Interview their programmers, engineers, before you make a decision.
  7. Ask for a non-disclosure agreement and signing a document will build trust.
  8. Know if you want your software programmed or coded.
  9. Make sure your partner develops a robust security architecture that has highly readable with high-performance codes.
  10. Have your requirements and specifications documented in detail.
  11. Are you interested in using the latest trends in user interface and can they comply with your request?
  12. Request a first draft of the design and will the partner agree with your demands.

Have your Team Create a Short Project Outsourcing Checklist:

You can save a lot of money, time and eliminate frustration by putting together a list.

  1. What is the goal of the project? Be specific and detailed as possible.
  2. Can our product team precisely and clearly define what the application goals are?
  3. Does the product development team understand our company’s vision? So they can better develop the app to meet all our business needs?
  4. Define the scope of the project? Creating a product mockup for a visual representation of the functionality of each application screen.
  5. By designing mockups it will help the product team understand the user’s story. How will the customer interface and use the product successfully?
  6. Do you want a local outsource partner? Pricing will be higher if it’s within the US.
  7. Or does it make sense to use a nearby country like Mexico or Canada to do manage the project or operations?

Things to Consider

  1. What kinds of products does your company need? If its mobile applications, including which platforms do you want.
  2. If you’re interested in building an administrative panel include the content management system as part of the project.
  3. Remember to include external integration like payment module, shipping details, etc.
  4. Describe the existing system components and the current state of the project.
  5. What technologies do you want and select the partner with the most experience in this technology?
  6. Create a project team that includes a Product Owner, Project Manager, and Developers and add Support Administrators to document tasks and activities.
  7. Define Timelines, Budget and Project Scope. Get a copy of the formal agreement.
  8. What approach to project management and communication? What method will be used – Scrum, Kanban and what tools will the agency be using such as Jira, Redmine, Asana.
  9. Add some chat solution (Slack, Hipchat) it will help to understand the big picture and the organizational process.

The Takeaway

The stigma around offshore outsourcing is real and the negative opinions attached to this old-time business practice force organizations to dip into this reality to increase in-house efficiency and cut costs.

According to a recent survey conducted by the consultancy firm Bain & Company, 82% of the largest companies in North America have outsourcing agreements in place. 51% of American companies do offshore outsourcing with an organization in another country.

Outsourcing benefits:

  • It helps to reduce and control operational costs.
  • Streamlines time-consuming activities for the purpose to move parts of operations overseas.
  • Reduce expenses; don’t have to pay benefits to workers.
  • Reduced workforce and tapping into top talent were the top reasons why organizations moved parts of their operations overseas, to be more strategic and competitive.

Technology and the digital age has impacted the American business to look for cheaper ways to conduct operations and moving call centers, human resources, finance and factory-based jobs to a foreign country for offshore outsourcing has exploded over the past 30 years.

  • Offshore outsourcing has become commonplace and has gained in popularity over the years with access to IT services and lower labor costs as a few reasons why organizations reach out to third-party vendors to move parts of operations to increase quality and establish a larger workforce without having to train and pay for health benefits.
  • It helps organizations be more productive, gain a competitive edge and helps in cutting costs.
  • The reason to outsource is diverse but its main attraction and popularity are to have access to top talent and a skilled workforce and your business can run 24 hours a day, 7 days a week.

What Are You Working On?

Looking for intelligent technological solutions? Seeking consultation on your upcoming projects? Need a quote for services? Contact Aptude’s executive team directly. It’s amazing just how much one little email can rapidly accelerate your productivity.

Guy DeRosa

Senior Vice President & Director of Operations
EMAIL GUY
p: 630.692.6700
ext. 406

Srinath Parepally

Vice President of International Development
EMAIL SRINATH
p: 630.692.6700
ext. 402

Uday Mehta

Vice President of Development
EMAIL UDAY
p: 630.692.6700
ext. 403

Diana Guzman

Client Advocate & Communications Administrator
EMAIL DIANA
p: 630.692.6700
ext. 409

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