Why software development gets outsourced
Strategic need: outsourcing can strengthen core reputation, letting the company invest more in higher-return projects.
Financial need: outsourcing lowers and controls operating costs, increases the company’s cash flow and improves return on investment.
Management need: outsourcing makes the operating model more flexible. In personnel management, for example, the company only needs to manage the outsourced project, not the project team, greatly cutting management complexity and cost.
Which software suits development outsourcing
Non-core business: first clarify which of the company’s businesses need outsourcing and which can be outsourced. Generally, non-core business goes out first. Outsourcing core business calls for caution, to avoid training up competitors.
Relatively clear requirements: for outsourcing, the company must know exactly what business it is outsourcing. The clarity covers not just core versus non-core but the requirements of each specific development project, so both sides know what is being outsourced and can build an effective cooperation mechanism.
Portable: the plan covers both the master outsourcing plan and the plan for each project. As an enterprise, draw up a relatively clear plan for the business to be outsourced, so a suitable software outsourcing company can be found easily to develop it.
Acceptable: the enterprise must be clear about the final result of the outsourced business, the desired outcome, matching the point above. Only with requirements and expectations clearly defined can outsourcing achieve the intended result.
What outsourcing demands of the enterprise
Before signing the contract, the enterprise must first hold a clear outsourcing strategy and a concrete, workable outsourcing plan. It must be able to select a software outsourcing company, and to manage and evaluate one; choosing a partner who can complete the outsourced task is the key to the cooperation and to lowering outsourcing risk. Next, it needs a fairly complete quality management process for outsourcing, plus risk management and control ability and communication and coordination ability, all vital to completing the joint project. Beyond that, a reasonable cost plan is needed, which is also the basis of lower operating costs and mutually beneficial cooperation.
Draw up a master outsourcing plan
It should include overall cost and budget planning, the master contracting plan (scale, schedule, requirements, preparation, steps and so on), each department’s responsibilities and liaison mechanisms in contracting, and the enterprise’s staffing plan. A system for selecting and managing outsourcing companies: setting the conditions for engaging them, introducing, evaluating and exiting them, with periodic evaluation and published results, and defined exit conditions and mechanisms. For a company new to outsourcing, choose the outsourcing company carefully, and use trial projects during vetting to probe the provider’s true strength.
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