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

Why Outsource?

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

Evaluation Process

Account Management

  • How will your account be managed
  • What Project Management tools are used?
  • How available is the Account Manager

Financial Stability

  • Check financial statements

Customer References

  • 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

Track record

  • 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.

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