Nowadays, more and more companies are deciding to offshore their software development to deal with increasing demands and workload. With benefits such as lower prices, easier access to talent, and potentially quicker time-to-market, it is not surprising that outsourcing is gaining traction.
However, IT outsourcing is not all smooth-sailing: Working with third-party dedicated software development team still demands finesse in communication and project management. If you are not careful, you may ignore the hazards of outsourcing or fail to implement best practices.
To minimize the risk that many companies may encounter when outsourcing their technical capabilities, including communication delays, the inability to match expectations, security risks, etc., we will discuss 15+ best IT outsourcing practices to consider in 2023 and beyond. While considering hiring a technical service provider, if you follow the best practices, it will make your IT outsourcing journey successful.
Best Practices for Hiring a Dedicated Software Development Team
The outsourcing picture is not simple since there are lots of things to consider. In fact, when searching for an IT services provider, you will need to analyze available vendors thoroughly to find the appropriate one for your specific project’s requirements. Here’re some tips for you to start the hiring process effectively:
#1 – Identify what to delegate to third-party IT vendors
One of IT outsourcing’s main objectives is cost reduction. Thus, you’ll need to identify which tasks can be performed externally to minimize the investment in the in-house teams and infrastructure while still ensuring the quality of the outcomes.
Start by listing down all scope of work required to be done in the project and the internal capabilities that you have, then categorize your tasks into two main groups based on the following criteria:
| Activities should be outsourced | Activities can keep internal |
| Tasks slowing you or your team down: refer to usually time-consuming, repetitive tasks that must be completed regularly. | Tasks where it won’t be profitable to outsource: jobs that may cost more to delegate to third-party companies than to train an internal team to do. |
| Tasks that require specialized expertise: your team may lack the knowledge and experience to perform certain activities. | Tasks that you only trust your team to perform well. |
| Tasks that won’t demand a full-time staff | Tasks that should be kept confidential |
#2 – Communicate your requirements and goals clearly
Prior to working with an outsourcing business, determining what business objectives you wish to achieve is necessary. Besides, the third-party partner also needs to understand your goals. Hence, it’s worth considering providing them with a definitive list of requirements to ensure you are both on the same page.
Some information can be included in the list are:
- The technical functions that your company wants to outsource,
- An engagement model that fits your demands,
- Roles and the number of staff needed,
- Estimated deadlines, and outcomes.
#3 – Prioritize the outsourcing team with high credibility
Genuine reviews are always the most reliable indicator of quality. You can verify the trustworthiness of most IT service providers by visiting B2B review platforms like Goodfirms and Clutch and checking their service ratings. Such sites will provide you with neutral overviews so that any particular names won’t bias you. The companies that are reliable often have ratings for their scope and services above 4.5, with at least 3 reviews.
For instance: The profile of KMS Solution on Clutch indicates that the corporation has an overall rating of 4.8 over 5.0, with specific customer feedback regarding 8 projects it has completed so far.
#4 – Check the vendor’s proven track records.
Alongside checking B2B review platforms, you can also check the case studies of the IT outsourcing companies to understand their service quality, timely deliveries, and customer support services. With information regarding the types of clients they have worked with and the number of projects that have been carried out, it’s easier to decide whether the vendor is suited to your project or not.
In addition, checking the accreditations and rewards that vendors have gained so far, such as the Asia Pacific Enterprise Awards (APEA), Top B2B service providers on Clutch, etc., is one of the effective ways to verify their reliability.
#5 – Ensure the IT outsourcing team’s workflow is compatible with yours.
It’s worth considering asking IT vendors about their operations and how they interact with customers to understand what would the working process be. Moreover, as the project may change, you can check whether they have the ability to scale up or shrink the development team based on your specific requirements.
To ensure an effective working process, it’s a good idea to determine whether the workflow of the IT outsourcing company is consistent with yours, especially when you’re going to sign a contract with a remote team.
#6 – It’s not just about the money
Choosing the lowest bidder is tempting, and sometimes it’s the best option. However, any savings of 5% to 15% are meaningless if your product is of poor quality. In fact, the shoddy work provided by cheap services not only encumbers you from achieving expected outcomes but also costs you more to fix and rebuild the broken code. So, putting cost over expertise and quality is not a wise choice.
The main point is finding a provider that delivers the same technical knowledge and service at a lower cost than an in-house team. Aiming at ‘middle ground’ prices is one of the possible ways to help you control the expenses while still ensuring the product’s quality.
#7 – Be time-zone friendly
Let’s say you’re in Australia but use the services of an IT outsourcing firm based in Africa. In this instance, working across time zones can cause missed deadlines and inconvenience. Therefore, you should find a technical service provider in a time zone that is reasonably compatible with your own. The benefits of having a dedicated digital team that lives in the same zone or with minimum deviations like 3-4 hours include:
- Real-time work discussions to solve actual working issues together
- Rapid response to inquiries, issues, or changes in direction with outsourced engineers
- There’ll be less chance for missed deadlines or incompleted tasks
- Same time zone means proximity; thus, if travel is required, it will be a short journey.
#8 – Choose one that can communicate in your preferred languages
When discussing your ideas for the project, your goals and specific requirements shouldn’t be lost on its recipients. Thus, the best practice here is choosing a dedicated software development team that can understand either your preferred language or English – the globally spoken language. This will help eliminate the communication barriers and improve the collaboration effectiveness between two teams.
#9 – Pay attention to data security
Before starting your project with a third-party technical service provider, ensure you’re well aware of safeguards and data security to prevent sensitive information from cyberattacks. In the interview session, you can check what security measures and protocols they have in place already and how they plan to handle your project, to eliminate the possibility of a data breach.
In addition, you can create stringent service level agreements to verify that all of your project’s actions adhere to industry standards. This will give you more security, and your data will be completely safeguarded. Don’t forget about the NDA (non-disclosure agreement); requesting the NDA to be signed during the interview process is also possible.
Best Practices for Managing the Dedicated Software Digital Team
#10 – Have effective onboarding processes in place
The ramp-up and information transition plan is critical to the success of many projects since it helps clients and digital teams understand and transfer knowledge effectively. Typically, it takes 2-3 months to have a full dedicated software development team of 25-30 experts capable of fully owning the product knowledge and taking on the task independently.
During this period, as a project owner, you should concentrate on training skills and knowledge for the outsourcing team to be well-equipped before officially joining the large project team.
This process can be divided into 3 phases:
- Product exploration
- Product in-depth
- Hands-on.
Learn how to make the most of your outsourcing team onboarding and knowledge transfer here!
#11 – Stay involved and committed to the process
Outsourcing a project doesn’t imply that it’s out of your control while your software partner handles the work in their way. In fact, stakeholders’ involvement and timely decisions are crucial to the development process.
You can manage the digital team’s working process by:
- Communicating with the team consistently and regularly.
- Having a team of Project Managers (PM) or Business Analysts (BA) to supervise and guarantee that every stage of the software development goes smoothly.
- Holding short meetings every week or at least 2-3 weeks to update the working process, discuss any concerns/issues that may occur, and find instant solutions.
#12 – Maintain effective two-way communication
Communication in any project is crucial to help both parties be engaged and aware of updates. Even when your IT outsourcing team can speak the same language as you, it’s still challenging if both teams use different communication methods. Bugs, development issues, and requirement changes can have disastrous repercussions on a project if not communicated quickly and properly.
Thus, to improve project communication, it’s crucial to ensure both teams agree to use the same communication tools, such as Skype or Slack for instant messaging and Zoom or Google Meet for brainstorming sessions, routine team meetings, etc.
Regardless you are using Google Chat or Slack, centralizing all project communication will boost responsibility and make it possible for all team members to connect in real time.
#13 – Determine the level of supervision required
This will be determined by your degree of experience and comfort. For projects that have a high level of simplicity, you can examine the completed tasks at the end of each week or each sprint. Nonetheless, certain projects will demand extra supervision from beginning to end to ensure that everything runs properly.
In case this project is new for both you and your outsourcing team, starting with more supervision and gradually reducing it as you become more comfortable is worth considering.
#14 – Go Agile
Agile methodology is the most popular and effective approach for the majority of software projects. Agile is utilized by 71% of firms, and agile initiatives are 28% more effective than traditional projects.
Agile development is done in multiple short iterations, allowing the implementation of new innovations with flexibility and speed. This methodology is ideal for you to track and manage the process of the outsourced developers since it enables sprint planning, weekly reports, and product backlog.
#15 – Organize works with project management templates
Despite outsourcing your project to other technical teams, you still have the right to manage and track their development process. Having proper project management templates make it easier to outline an action plan, track the project’s duration, and manage your dedicated software development team’s workload capacity.
Our effective collection of templates will include:
- Agile Project Plan Template: helps you note down the detailed tasks for each feature development, including the person in charge, the start and finish dates, and the status.
- Capacity Planning Template: provides you an overview regarding the capacity required for the entire project.
- Weighted Shortest Job First (WSJF) Template: allows product teams to determine which items to prioritize on the product backlog.
- Team and Technical Agility (TTA) Template: illustrates the team’s strengths and weaknesses, from that assigning the right task for each person.
It might take a while to find a potential match right away, but choosing the perfect software developer means that your company can grow and expand more than your expectations. Entering an agreement with a dedicated software development team isn’t a simple task and should be considered a complicated involved process. Therefore, by combining these best practices with KMS’ Checklist for Selecting Software Development Vendors, you can find the appropriate IT software provider for the corporation’s specific demands and manage the outsourcing team effectively.
