As the world aims to braze the trail in every aspect post-pandemic, IT is becoming the lighthouse for growth in almost all the countries. Where some businesses endeavor for the same by hiring internal professionals, others are preferring to outsource IT tasks for distinguished reasons. After all, it is a great alternative to get things done effectively and professionally without facing trials and turbulence.
IT outsourcing heads towards a win-win situation for every enterprise and offers bounteous benefits such as flexibility, improved focus, cost-effectiveness, reduced risk, and a lot more. However, the fact that not all IT outsourcing companies work in favor of the project entails one to consider only the right choice. This will not only bring your business efforts to fruition but also helps to enjoy a competitive advantage. Thus, looking at the whopping demand for IT outsourcing companies in recent years, here we present a comprehensive guide on choosing the best.
Top Factors To Select The Right IT Outsourcing Agency
The first and foremost attribute to consider before choosing the best it outsourcing company is the quality and proficiency level of human resources they are about to offer. In other words, the human resource in the IT sourcing company should be skillful and experienced enough to carry the demanded IT services.
For instance, if a business is hiring an external firm to accomplish tasks based on cloud computing, it is essential for the assigned delegate to possess sound knowledge of HTML and computing fundamentals. They should also be skillful in handling ERP systems and must have good hands in project management and security skills.
Choosing IT Outsourcing Company Based In An International Market
The location of the selected company plays a significant role in decision making as the right choice lets enterprises relish the entire benefits of outsourcing. In addition, it helps one ensure compatibility with the organizational and corporate culture by eliminating all challenges. Below-mentioned are some of the considerations that prove why location is the key factor in finalizing the best IT outsourcing company.
They say, “Language is the key to better collaboration”. Thus, it is always better to make sure that the chosen outsourcing company is able to understand the requirements on a clear note. They should be capable of making constant contact throughout the duration of service, especially when the location of the IT outsourcing agency is not in close proximity.
In most cases, the alliance between businesses and external service providers relies on virtual connections because of differences in states and countries. Overlapping of the time zone is therefore a usual challenge that one can face during the course of service. To eliminate the hassles caused due to the same, it is recommended to mull over the attribute of location. For example, if a business is based in North America, considering an outsourcing company based in Latin America would make the finest decision.
- Proficiency In IT Sector
Even though today most part of the world has broken new ground in the sector of IT, there are a few countries who are well versed with it. These are Poland, Romania, Ukraine, and the Philippines. Along with churning out the top-notch software developers, they bring into being cutting-edge technology in the IT sector. In short, choosing the location with high competency in Information Technology is one of the substantial factors to be kept in mind.
Company Processes And Communication Standards
Conflicting interests, inefficient communication, and lack of clear understanding by the agency are three significant reasons why outsourcing projects fail sometimes. However, since no enterprise yearns to get off the wrong foot, it is always vital to fathom about company processes and communication standards.
To form an impression about the agency standards and their suitability with the firm’s requirement, one can start by sharing the existing business challenges and asking for potential solutions. The best IT outsourcing services will always be able to present the tailor-made solution after analyzing the situation.
In addition, the enterprises are recommended to communicate clearly with the IT outsourcing agency and are supposed to share only precise requirements and details. Further, hire only when they are able to have a grasp of the business mission and offer well-qualified service in line with the requirements. They should also be competent in providing constant support through communication.
- Preferable Model of Outsourcing
When hiring an agency for business process outsourcing, considering the suitable model will help an organization to make the best out of the partnership. However, it is first essential to be cognizant of the types of outsourcing that exist in the field. Two considerable models based on which the different types of outsourcing services are categorized are Location-based and Relationship-based.
Location-Based Types Of Outsourcing
- Onshore Development
Onshore development outsourcing refers to the situation when IT sourcing service providers reside in the same country but outside the company. It is one of the beneficial options as it let the business take advantage of professional and skillful service without facing location-based challenges such as the difference in time zone, improper cultural accessibility, and ineffective communication.
- Nearshore Development
When a business outsources the IT service to the agency residing in the neighboring countries, it is known as nearshore development. The top pros of opting for such an option are the least time difference, cost-effectiveness, and versatility in offerings.
- Offshore Development
Offshore development means the selected outsourcing service agency is situated in another country, that is quite a distance apart. Though it heads towards the obstacles in terms of huge time and cultural differences, businesses can go for it to achieve the benefits of leading-edge technology, efficient service, and enhanced exposure.
| FACTORS | ONSHORE | NEARSHORE | OFFSHORE |
| Time Difference | No | Low | High |
| Cultural Accessibility | High | Medium | Low |
| Communication Gap | No | Medium | High |
| Exposure | Low | Medium | High |
| Cost | High | Medium | Low |
Relationship-Based Types Of Outsourcing
- Staff Augmentation Model
In the Staff Augmentation Model, an enterprise hires the It specialists on a temporary basis as part of their staff members to get IT to project done productively. It is a convenient option for long-term but temporary projects as it saves time, money, and helps to acquire in round clock service.
- Managed Team Model
It is when a company hires the development team for a specific project but instead of collaborating with an in-house team they directly report to the client or higher manager. Businesses choose this type of outsourcing to let the professionals have full control over the project and accomplish it without risk.
- Project-Based Model
When an organization fully delegates the responsibility of the development project to the sound IT outsourcing service, it is referred to as a Project-based model. It is suitable when one wishes to achieve clear outcomes with decent quality.
| FACTORS | STAFF AUGMENTATION | MANAGED TEAM | PROJECT-BASED |
| Engagement Length | Low | Medium | High |
| Vendor’s Responsibility | Low | Medium | High |
| Pricing Model | T & M | Fixed-price | Fixed price, T & M |
| KPIs (Key Performance Indicators) | High | Medium | Low |
| Ease of Communication | High | Medium | Low |
Intellectual Property Rights And Patents
An IT outsourcing company, if situated in another country, should understand and comply with the intellectual property rights and patents of the client. This is because it helps the client to be sure about the fact that the hired agency will not misuse or mishandle the confidential information shared regarding the project. After all, data security is the core element of the safest business flow.
Thus, it is recommended to every client to ask for a license from an outsourcing company and share their IP rights. Besides, in the case of joint ownership, the business should not hesitate to negotiate as it is the least safe option when it comes to data safety.
Other than this, the agreement between the two parties, that is client and IT outsourcing services should clearly state the consequences of a breach of trust. All this should happen while complying with the rules and regulations applicable in the specific country.
Resources And Technology In Use
No two companies make use of similar technologies and equipment to accomplish the operations. Since the field of IT is quite vast and includes the involvement of bounteous types of technologies for distinguished projects, it is a must for the client to measure the suitability.
The best outsourcing companies always make sure of the availability of the appropriate technology and equipment to present the bespoke solutions. To relish such a type of experience, every client should take into account the latest trend of technology, easy accessibility, and mobile-friendliness. Also, have a clear interaction with the service providers regarding upcoming technologies to be ready for future business strategies.
The Model of Outsourcing You Wish to Go With
The challenge of a lack of technical resources has no scope in recent years. This is because as per the official resource, ‘the global edge computing market is expected to reach up to $6.72 billion by 2022’. This clearly means that commuting technologies in recent years are making headway. Some of the latest trends in IT technology include Artificial Intelligence (AI) and Machine Learning, Robotic Process Automation, Edge Computing, Virtual Reality and Augmented Reality, and Quantum Computing.
Costs and Expenses
Cost-effectiveness is the main reason after splendid service as to why businesses prefer to outsource the IT project. However, with a spike in competition among outsourcing companies, it is crucial for clients to compare the prices to get things done without breaking the bank.
To perform the cost analysis for outsourcing, start by defining the business process that needs to be outsourced. Measure the in-house cost that can be eliminated after outsourcing and the total expense of outsourcing. After deducting the in-house cost from the total outsourcing cost, one can get the amount saved during the collaboration. The resulting saving cost will help the client to be involved in better decision making.
Conclusion
IT outsourcing companies are the finest alternatives for a modern business that is not able to invest in building an in-house team for completing software development projects. The countless benefits achieved on hiring such an agency let the clients enjoy proficient outcomes with less price and effort. Other than this, it also lets the business gain exposure in several aspects, especially when the outsourcing companies belong to separate countries.
All it entails one to concentrate on the right decision-making before seeking IT outsourcing services. The above-listed factors are key to the right selection of agency for better yet fruitful collaboration. Thus, keep your business hassles at bay and join forces with the best IT outsourcing company to be on the crest of the waves.
