What is Outsourcing?
Outsourcing is contracting with another company or person to do a particular function. Almost every organization outsources in some way. Typically, the function being outsourced is considered non-core to the business
The OPD (Outsourced Product Development) option brings down the total cost of output, helps boost the bottom-line by availing of the best talent, and saves time for core activities.
5 Key reasons why ISVs outsource product development:.
- Focus on core business needs and strengths: By outsourcing, you get more time to understand customer needs, innovate ideas for market-centric products, and build customer relationships
- Augment your Product Development expertise: You get the best of skills and talent to work for you
- Get enhanced Return on Technology Investment (ROTI): You save huge infrastructure and staff costs and in return you get a high quality product
- Speed up your time-to-market: Your product development partner ensures fast development and deployment
- To gain competitive advantage
Where to Begin?
- Outsourcing concept
- Offshore Industry
- Pros and cons of offshore outsourcing
- Prepare an RFI questionnaire
- Send it to offshore vendors
- Get offshore companies from the countries selected
- Evaluate based on company vision & values, clientele, language and technology match
- Shortlist good companies that you need to further evaluate
- Educate all stakeholders
- Get a buy-in from the management team
- Get them to choose offshore outsourcing as a strategic tool
- How will your account be managed
- What Project Management tools are used?
- How available is the Account Manager
- Check financial statements
- Check with references on how satisfied they are
- What are the provider’s strengths
- What has been the quality of delivery
- How efficient they are in Project Management
- How does the provider deal with problems
- Service commitment
- Industry recognition & certifications
- Customer satisfaction
- Service level agreements offered
Do's and Don'ts in outsourcing:
Five do’s of successful outsourcing
- Outsource the bottlenecks-those things that are really keeping you from growing your business profitably.
- Pick great partners. Check them out. Talk to their current customers.
- Once you outsource, your provider is part of your company; treat it that way.
- Demand excellence-this is what your provider does for a living. The way it does it should constantly amaze you.
- Outsourcing can scare employees. Get, and stay, ahead of the rumor mill through straightforward, honest communications
Six worst mistakes in outsourcing
- Not clearly defining the desired results and how they’ll be measured.
- Not talking to a provider’s current and former clients.
- Failing to consider the long-term relationship dynamics.
- Signing a standardized, multiyear contract.
- Not planning up front for how the relationship might end.
- Treating the provider as an outsider.