13 Best Practices for IT Outsourcing in 2022

Published On: May 19, 2022
Last Updated: July 5, 2022
IT Outsourcing Best Practices

Various startups and small-scale businesses don’t have an IT team that looks after the technicalities of the project. Moreover, it is challenging for them to gather a team of IT professionals. In such a case, outsourcing the IT project is one of the best solutions.

Outsourcing is a process in which a business hires a third-party provider to carry out tasks, build products or provide services that can be performed with the help of an internal IT team.

One of the primary benefits of IT outsourcing is that you don’t have to invest a massive amount. You only need to hire a team of professionals having expertise in the project and pay them as per the requirement.

The main drawback with IT outsourcing is that the company finds it challenging to understand your culture and what you want to achieve with the project. Besides this, there are various pros and cons of IT outsourcing.

You can resolve all the issues of IT outsourcing by following some of the best IT outsourcing practices. Moreover, different companies have believed in IT outsourcing and reached great heights.

Here we will walk you through several best practices for IT outsourcing that you should consider for making a successful product.

So, let’s start.

1. Identify Whether Project is Good for Outsourcing

Not every project is suitable for outsourcing. Outsourcing is beneficial when you have particular project requirements, or you have to build a project that doesn’t belong to your core business.

For instance, various companies opt for cloud services such as Microsoft Azure or Amazon Web Services to host their websites. The company might have expertise in developing web and mobile applications; however, they do not possess enough resources to establish a hosting environment.

Therefore, they purchase cloud service providers to handle the entire infrastructure for their business. By doing this, they get the advantage of a highly-organized environment without any cost of keeping their systems.

Do you have an awesome idea in your mind? Then reach out to Guru TechnoLabs. We are an offshore outsourcing center with a talented pool of engineers. We will provide a free analysis and quote for your project. Don’t worry your idea will remain confidential.

2. Define a Proper Objective

It is essential to define all the objectives and specifications of your outsourcing project before reaching out to the IT outsourcing companies. Make proper documentation that mentions accurate details about the project with your business goals.

When you possess a list of all objectives and specifications, you will be able to identify the best provider who meets your requirements. Moreover, you do not need to explain your requirements to the outsourcing vendor. You can just send the documentation to them and instantly choose the vendor that understands your project property.

3. Select a Provider You Trust

Choosing the right IT outsourcing service provider is highly beneficial for web development, app development, or any other project. To find the right provider, you should define what you want from a service provider.

Here are the following qualities that you should consider in your IT outsourcing service provider:

  • The experience that matches your business requirements
  • Quick turnaround time
  • Utilizes the latest tools and technologies
  • Transparency and quicker communication
  • Confidentially along with the security
  • Works on the most popular coding practices

4. Choose a Suitable Outsourcing Engagement Model

There are different types of engagement models available in the market whenever you decide to outsource your project. One of the best IT outsourcing practices is to choose the engagement model according to your project requirements and goals.

Here will look at these engagement models in brief:

Fixed-price model
Here, the working relationship is decided considering the budget. You have to pay a fixed price for the project. To define the price for the project, the outsourcing team wants complete details about the project with the budget. As a business owner, you have to communicate all things clearly.

The main drawback is you cannot change the scope after the project gets started.

The primary advantage of this model is that you have the option to hire the best professionals and plan your project well. If you have issues in planning, the outsource vendor helps you with that.

Time & Material Model
In the time and material model, the hourly cost is decided based on the real-time needed for the project and the resource utilized. You are fully engaged in the development. The pricing model relies on the time the developer team invests in product development. It is challenging to predict the final product, as you have the flexibility with the scope.

As the requirement changes in real-time in this model, you get a functioning product at each stage.

This engagement model is highly-suitable for a business with a changing environment, modifying requirements, and wanting to build a new-age developed product.

Dedicated Team Model
Whether you want to develop a small or long-term project, we recommend you go with a dedicated team.

When you hire a dedicated team, they will work for your project from start to finish. You may think it is expensive, but it saves money in the long run. The entire team has to understand the project once, and they are good to start your project instantly.

The monthly charge is decided depending on the experience, size of the team, and hourly rate of the outsourcing vendor. Here, you have complete control over the software development process, and you get the desired output as per the need.

Moreover, the outsourcing vendor helps you with the recruitment, and infrastructure and provides administrative support for the project. Here, you have to remain engaged with the development team. Hence, you might have to look after project management sometimes.

At Guru TechnoLabs, we have a dedicated team of developers. You can manage the entire team, and we provide support to get the desired output.

5. Don’t Make Your Decision Based on Price

It would be best to consider IT outsourcing to reduce development costs. However, this should not be your primary goal.

The primary purpose is to find an IT outsourcing provider that is less costly than an in-house team; however, it provides a similar kind of quality and service. It might be challenging for you to find an IT outsourcing vendor, but please note that you get service as per your price.

Various experienced outsource buyers who analyze hundreds of bids always suggest neglecting the lowest and highest priced bid. Later, choose the best IT outsourcing vendor that suits your project requirement and budget.

6. Check Portfolio

Explore the earlier work done by an IT outsourcing provider to ensure that they can fulfill your project requirements according to your expectations. If you have analyzed the provider’s portfolio, experience, and references and still have any doubt, request them to offer a quick mockup or highlights about how they will execute your project.

An experienced service provider who truly wants to get your business may be able to provide a simple idea by which you can understand their method of executing a problem.

7. Begin with a Small and Simple Project

If you are dealing with an IT outsourcing service provider for the first time, consider outsourcing a project that is probably small and simple to build. With this, you will get an overall idea about the service provider’s style and work before you think of allocating a big project to them.

8. Check Outsourcing Vendor’s Reviews on Different Platforms

Even though ratings do not determine how a company works, they are essential. For selecting the best IT outsourcing service provider, it is recommended to check the company’s reviews on popular outsourcing ratings and review platforms such as Clutch, Goodfirms, etc.

9. Establish Proper Communication

Communication is vital to bridge the gap between both parties and keep them hooked on the latest updates in the project.

Communication can be challenging if your IT outsourcing service provider belongs to a different country. Also, language, culture, and time zone are some of the crucial factors that have a high impact on communication.

But a project’s success highly relies on communication. Development issues and frequent updates can adversely affect a project if you don’t communicate at the proper time.

With the availability of various tools, there should be no excuse for teams not to communicate. If you are unable to fix a video call, go for a phone call, send an email, start a chat room, or access any messaging platform.

It doesn’t matter which method you choose; you should keep cooperating with the outsource vendor.

10. Develop a Good Relationship with the Service Provider

Establish a relationship of partnership with the IT outsourcing company that emphasizes the growth of both the firms. The way you hold the relationship with a provider contributes a lot to the success of a project.

Here are some of the ways by which you can build this kind of relationship with a partner:

  • Detailed understanding of the project
  • Valuing each other’s commitments and abilities
  • Strictly following the contractual terms
  • Staying alerted about the project’s progress
  • Admiring each other on successful completion of project milestones

11. Negotiate about ownership of your project in advance

One of the best practices in outsourcing project work is negotiating regarding the ownership of your project. Before outsourcing your project, make clear-cut decisions about who owns the final product and any essential elements of a product. You should inform clearly to the service provider that you are the sole owner of the project and how you will use the project.

12. Make sure that data security and regulations are fulfilled

Whenever you are starting a project with an IT outsourcing service provider, understand how they would protect the data of your company and the customers. Also, check that the company follows the latest practices to decrease any risk of a data breach.

Build strong service level agreements so that all the tasks regarding your project work are accomplished as per the latest industry standards, and your data remains completely safe.

Secondly, you should check that the service provider fulfills the data security regulatory needs of the specific market. For instance, if your goal is to outsource mobile application development for the European Union, then your outsourcing service provider should be able to fulfill all the things mentioned in the General Data Protection Regulation (GDPR).

13. Think about the after-release support

When you are working on a software project with the vendor, you should think about the after-release support. By this, you have a guarantee that you will get support from the vendor for a specific time.

The best time to talk and finalize the after-release support for your project is before it starts.

Final Words

Here we conclude some of the best IT Outsourcing practices for every business. By following the best practices for IT outsourcing, you can find the most compatible IT outsourcing vendor and build a reliable & effective product for your business.

If you are not sure about an IT outsourcing company, you can begin by allocating a small part of the project. Depending on the results of that, you can later outsource your critical project.

By doing this, you can share risks and by any means, if you haven’t got results as per your needs, then you can transfer your project to another company.

If you still have any doubts about IT outsourcing best practices, then contact us.

Guru TechnoLabs is a professional IT outsourcing company. We provide web and mobile app development services to varied industries at a cost-effective price. Share your project details with us today to get a free quote.

Ravi Makhija
Ravi Makhija

Ravi Makhija is an entrepreneur, an IT professional, tech geek, founder & CEO at Guru TechnoLabs - Globally Trusted Web & Mobile App Development Company. He loves writing about new technologies and the latest trends in the IT field.