When a company chooses to outsource, they are making a choice whether or not to trust another company. Outsourcing is an agreement in which one company hires another to be accountable for a planned or existing project. That is or could be done within the company. It also involves transferring employees and assets from one firm to another, at times. There are a lot of other things that are associated with outsourcing. When you are outsourcing your tasks a lot of questions come in your mind. That has to be answered by someone.
We at Vyrazu Labs have written this blog for answering these questions that fog your mind with cryptic thoughts. In the meanwhile, we have prepared some points that will help you to recognize how you will hire a company that best suits your interest. Outsourcing software development has become a common trend followed by maximum companies. For dealing with tasks that eat up valuable time of the company’s dealings.
Outsourcing is a welcome concept not just for the companies who are looking for outsourced software development projects, delegate or sub-contract business activities but also for the Asian countries like India, Bangladesh, Myanmar, the Philippines, etc. As I am based in India I would like to use this country as an example in the rest of the blog. These are the English spoken countries whose talent pools are being subjected to outsourcing projects. Outsourcing has answered the call for the unemployment rate in the developing countries.
The labor force of these countries for specific industries has indulged in this process. In the Philippines outsourced tasks have made a positive impact on the developers who had thought there were no jobs waiting for them as they graduated. It is the same thing in India, as you must have heard about Bangalore being the Silicon Valley of India. Bangalore is home for a maximum of the development companies and the IT sectors.
The technology and infrastructure that India has made for itself is proof enough that they are capable of anything. When the time comes, India, Myanmar, or the Philippines don’t score-less in terms of the technology they have. When it comes to outsourcing software development, it is essential that India or the other Asian countries have the technical support to give their final word. And, guess what they do, they use that same set of technology used by any software development company in the entire world.
This is important, as you might want to know if anyone is compromising with the quality of the product. The infrastructure that India has, they are capable of keeping in touch with foreign companies by sharing data both ways using modern technologies, using the satellite, deep-sea cables, etc. This helps both India along with other Asian countries to keep good business contact with other countries.
As the IT sectors are responsible for giving us (India) a lot of business in terms of outsourcing. Hence, the financial value of this company is maximum so the government has decided to reduce the tax amount and support pro-IT development. This helps the employees to focus on their work as they are being able to make decent earnings. This helps them to lead a balanced life maintaining expenditures accordingly. Furthermore, it also helps in finance management and reduces the cost for the companies who want to outsource to India.
When you choose to outsource to India, you will be able to use the financial benefit. As the Indian rupees is lesser than the dollar, it will help you keep some savings. Not only that, but you will also be able to take advantage of the time gap. If you need something to be done by the next day, an Indian will be able to complete it the previous night. It will help in the progress of the work.
If you are choosing to work with companies in the US then be sure to pay $40 to $90 per hour or even more. However, if you choose to outsource your work from India or any other Asian countries you will be able to cut costs. As you can bargain the hourly price as low as to $10 per hour. When you are outsourcing your work to countries like India, you can be sure they will not be taking any extra charges from you. The reason is that they don’t have to pay much for rent, the wages are less, the tax is less and many other such factors that allow these countries to twist and turn their cost.
Now that we have discussed the benefits of outsourcing offshore, let’s dig deeper. It’s time we explore the questions that might come in your mind when you are planning to outsource to India.
There are questions that are often asked before someone is actually outsourcing their tasks. These questions are as important, as understanding which outsourcing companies are best suitable for your needs.
There are many reasons for outsourcing the task in countries like India:
There are many reasons which explain the areas where outsourcing is not beneficial. Like:
There are times when the amount you were prepared to pay for the development process or outsourcing software development exceeds its limits of consideration. When you are aiming to outsource in western countries or countries like Australia. The amount that you were prepared to pay for development will rise, without a doubt.
Don’t go for such developments that you will cost you more than what you had anticipated. This will eat up a maximum of your budget for development. Ending up with nothing when you think about marketing the product. If you feel that the price is going overboard just find another company that will be able to do it without charging you a truckload of money.
There can come a time when you will not be permitted to outsource. When you opt for outsourcing a task you must read the contract signed by the client. There might be a clause that stops you from outsourcing the task. This will mean that you alone and have to take care of software development and you will not be allowed to give it out to any other company.
This means that you are tied by the law not to outsource the job. In some cases, we have seen that this has been the major reason why a company was unable to outsource to any other company. When it comes to satisfying the client, it is your job to say yes to the valid notions they pass. This is the key to performing better.
There are times when you choose a company to outsource who can turn on you. When you ask that company to submit the codes and the documents associated with the outsourcing software development. The company can say that they will not give you any of their work items. This means, even though you are in charge as the owner or employer of the product, the raw material they are making might not reach you. If the company doesn’t allow you to keep in contact with them regularly. Then you must not go for development as well.
The company that you outsource to should come clean when you ask them for the codes and the essential elements that you are entitled to see. As you are the owner of the project you are also the person who gives the orders. In the beginning, when you outsource your task, your work will be done by an outside company. That is when you will not have to worry about the tasks. But when you hire your own team. That is when you will need access to the codes so that your home team can make further developments.
The least common reason for a company to outsource is for “better managing the costs of internal processes”. However, there can be other reasons like tap outside sources of expertise, reduce headcount and related expenses, and concentrate resources on core business. These, on the other hand, are common reasons for outsourcing. Now to further explain “better managing the costs of internal processes”, it means there are very few companies who use this reason to outsource.
To break it down further this statement literally means that, few companies who have a cost management issue or are running on a low budget will go in for outsourcing using this reason. This, however, is valid only if the company has to complete their work on time, maintaining the quality as well as taking care of cost management. However, the other reasons that I shared can be used by different companies who are looking forward in that direction in terms of outsourcing. Many companies outsource their tasks just to have a different culture influence on the product.
If you have been given four options:
Then your answer will be option d. This statement is true outsourcing since among the other options this is valid. This is valid as it speaks about how two companies are contractually bonding for an assessment to be completed. When one company is trusting the other by giving rights to the technology that they own, to a company that will finally develop it. But the other statements here can mean outsourcing as well as anything that is not related to outsourcing.
When you are served with four options:
Then the primary reason why companies outsource will be to tap outside sources of expertise. If you look carefully at the options all the given points are valid for outsourcing. However, the primary reason why companies choose to outsource is for tapping outside resources.
As the companies want to extend their reach of the global market. If we put it like this: if you tap outside resources that will lead you to reduce the headcount, concentrate the resources you have in the business, and be able to manage costs of internal processes.
The primary reason or the core reason will be followed by different other reasons why companies choose to outsource. This literally means that while a company has made up their mind to stretch out they will do it in such a way that it helps both the company and the product that has to be developed.
There can be two elements that best describe outsourcing is:
Outsourcing can also mean finding resources at a lower price or using temporary employees to perform a task. However, these statements don’t explain outsourcing only. But when we say that another organization will perform a huge set of tasks on behalf of a company or organization that sets up manufacturing and retailing facilities in a new country that is outsourcing.
Outsourcing can be broken down as out-resourcing. That is when a company gives their part of work to some other company for completing the task is outsourcing. This also involves mixing up the resources that the other company has and making sure that they are giving their best in completing the task. Once you have given out the work that is essential to you, that means you are ready for outsourcing.
When you are outsourcing software development you are looking into a broader market. This is the time when you make the right decisions and are choosing the right company for the task. This involves research and a thorough examination of the market. This means that when you will be choosing a company you will have to know everything about them. While about outsourcing software development here are the points you can look into:
When you are moving in for an outsourcing software development company. There are risks that you will be taking. But all of that can be avoided. When you are looking for outsourcing to a development company you will have to make thorough research before you can actually give in. This means that when you choose a company you will have to look into their background first. If you know about the company, that means when you understand the types of work they have already done.
You will be able to get assurance for the type of work that needs to be done. Here are some ways in which you will be able to hire a good development company. When you understand the primary ideologies for hiring a good company you will be able to hire the development company that best suits you. First of all, you will have to understand that the company you choose should know how to build the type of software/app/website and other such development.
Once you are certain that the company is capable of making the development you are looking for, you can then ask them related questions that will help you. This means that you can ask them questions about the charge, maintenance, etc. The very moment you see that your job can be fulfilled by a company, you can ask them to provide you with the paperwork so that the company you hire can sign an NDA and you can wave a green flag for development.
This is the process where you will have to choose from an outsourcing model. In this process, you will have to understand the processes that are best for you. It has often been observed that staff augmentation is used in abundance worldwide. This will help you in bringing in talented software engineers for an as-needed basis. While you are on to it, you might as well consider taking in an autonomous team.
It will comprise a project manager, developers, designers, and testers. All of whom are required for a healthy development process. Without this crew, the project will be incomplete or lag in terms of accuracy. Hence, when you are choosing a company, be sure to choose in such a way that benefits you and your company. As they take care of the tasks that your in-house team doesn’t have to worry about.
When you are opting for an outsourcing software development company you will have to come clean. If you miss out on the details they might miss out on the development work. For making the task easy for both the companies, you should know the work standards and you should address the information that the outsourcing software development company asks you for. When you are coming in for development you make sure that the goals that you set are clear to the outsourced company.
If you have design expectations you must state it clearly in the beginning, so that they can follow your set of instructions and help you with the development tasks. There will be many assessment points that will be built into the process so that you can recognize the development and offer suggestions before multiple resources have been used and invested in.
When you are choosing an outsourcing software development company you will have to talk to them about the communication methods. There are few companies who prefer communicating using a particular social app. When they declare the app that they choose to communicate, you either agree to it or you tell them that you have a different way of communication. This will open the interaction lines between both the companies. When you do so, you will be able to know that the outsourcing software development company that you hired is working properly or not.
This means that you will be able to keep in contact with the company and look into the elements that they are integrating and when. With this, you will be able to measure the amount of progress that is taking place. When you start communicating you will have to make sure that the company is clear with the strategy and if they are following it or not. This means that you will have to produce the documents. These documents will carry the list of features you need, the functionality of the product and the design framework.
If you have content ready then you will send the same to the outsourced company along with the other documentation. The communication between you and the outsourced company will inform you of the work hours of the employees. Like at what time of the day they will be working on your project and how much progress they are making. If they are located in a different part of the world then, it is only fair to keep a positive note on the company who is doing the development.
When the development is over a good outsourcing software development company will give you a maintenance period. It is the company’s duty to provide you with the maintenance plan, as they developed the product, they will have to make sure it runs without any errors. After the coding and testing is over, and after you have verified the product yourself, the outsourced company will ask you if you need a maintenance plan.
If you have an in-house team you can shift the maintenance towards them or continue with the maintenance plan that the outsourced company is providing you with. When the job is done, and the outsourced company will want to move out, you can start training your own team by that time. This in-house team will help you maintain the app after the outsourced company has slowly phased out from your set of tasks.
A company can choose not to outsource over several points, that can concern the company both internally or externally. Well, for starters, these points can be the core reasons for an organization not to outsource:
When the work is not being done in your own office, the quality can lag. As you will not be physically present to see what the development team is preparing a thousand miles away from your actual firm, right? If you got to check the work that is being done, it will take up a lot of your time. So, you might feel that it is better to hire in-house employees who will take care of the development. If a product that is sub-par, and it reaches the customers, it will be rather shameful.
It will cost you the reputation that you have made for yourself. Suppose you hire a marketing company for handling your social accounts, and they break a rule, no one will see whose fault it was. Your customers will not like that change and blame you instead. This, however, can be avoided. If you are following the rules, no one will be able to cheat you.
If you belong to a sector who has to keep their doings confidential. I would suggest you not to go for outsourcing. Even though you are going in, for any reason you have. Don’t forget to get the company to sign a non-disclosure agreement. This will restrict the company from sharing any of the information that you will be providing them with. Before you go in, you will have to understand how the other company’s employees are trained and monitored.
There is a possibility of the information being saved on an electronic device and the data can get hacked if the company that you hire doesn’t have a proper security strategy. When you choose to outsource make sure that you are aware of the security of the company, the points in the non-disclosure stop the company from making any mistakes that will cost your company.
When you are outsourcing your work, and you choose a small company over a bigger company. This is for your advantage, that when you make any change when the project is ongoing, that company will be able to turn their employees in that direction faster. In the case of a bigger company, it will lag and the work might not accept the change that you’d like to make, until the very end of the project.
When you are outsourcing to a company you should make sure that it is a flexible company, and it can change quickly with your given instructions. This will help you and your company to make reasonable changes in the given time. If the company that you choose it not flexible then you will have to look for a different company that will help you out. You can have a business that requires change frequently, if you don’t find a flexible outsourcing company then your processes will lag.
When you start a company, it is you who builds the brand name for the company. When you are doing so, you will make sure that when anyone hears the name of your brand they understand what your business is all about. This means that the message that your brand carries is the most important thing. This means that when you are outsourcing your work, you will have to keep in mind that if this process includes interactions.
Then there will be huge problems regarding the data that is coming in. Well, to clear out if you are planning to outsource a call center or a company to handle social media, it might cause the other company to give out messages they were taught, other than natural replies that the customers want. However, if you just want to stick with outsourcing software development, then you will not have to worry about this. As the company you choose will only do the part they are supposed to do.
When you outsourcing there can be many issues, while one of them is being legally held guilty. This means when you are hiring a company make sure that they are not harming the customers financially or otherwise. If you are hiring an outside company for bookkeeping or financial documentation. If that company goes wrong somewhere you will be held responsible for the same. Suppose you have given out work for making you a Human Resource Management. Here you will have to give the outsourced company all the crucial details of your company.
If that other company uses any of that information to get to your clients. It might happen that a product is crafted by the other company that does something to harm your client. You will be held legally responsible for the wrongdoings. Hence, to safeguard your company from any harm you should keep the key elements inside your firm. This means that the work that is most crucial to you should stay in-house so that you can protect the process as well, save yourself from any legal obligations.
For both internal software development and outsourcing the analysis phase especially the primary activity of gathering the business requirements for the proposed system is taken care of. It doesn’t matter if you are doing the work internally or outsourcing a company to complete the task for you. The first step rather the unavoidable phase is the analysis phase. In this phase, all the given parameters are looked into. After the list of items that will be integrated has to be taken into account, the design will be taken care of.
After the analysis of the product is complete, where all the necessary items will be recognized. In this process, the workforce will also be given a set of tasks they will be doing in the project. This phase makes sure that the entire process is written down like a plan. In this plan, the necessary items are collected and the team is allocated tasks. The question, which SDLC phase is performed with both internal software development and outsourcing can be answered be one word: Analysis.
I hope that you have got a good idea about outsourcing software development, from the FAQs. These are the most important questions that everyone is worried about even when they are just thinking about outsourcing the task. Well once you have in-depth knowledge about the way things work, hiring will be easy for you. Once you have understood the basics of outsourcing, you will be able to make decisions faster. When it comes to outsourcing you must not trust anyone until you have the right proof and your requirements are being answered.
If you think that I missed out on any essential point, feel free to mention it in the comments. You can also leave feedback, any article is not complete without the critical acclamation of the audience. If you have any software development that we can help you with don’t hesitate to contact us. Being, one of the leading software development companies, we assure you that you will be able to help you with anything that you require. So, if you are having second thoughts pick up your phone and call us for knowing anything that crosses your mind regarding the development process.