Outsourcing: Best Practices

 Not once but often we get following feedbacks from top executives of companies who outsource their software work:

1. The application developed by the vendor was of poor quality
2. Test coverage was poor or not complete
3. The project wasn’t delivered on time
4. The entire engagement was at loss both in terms of money and time
5. Never got the anticipated outsourcing benefits

“Outsourcing is similar to any new relationship or marriage which needs to be nurtured with well-defined and measurable expectation of acceptable deliverables.”

Following are two most common reasons due to which any outsourcing engagement can go wrong:

1. Engaging with a vendor who is not able to execute the project as expected and not meeting deadlines due to
   1. Poor communication process
   2. Ineffective team
   3. Poor engagement model
2. Ineffective project management which leads to
   1. Higher cost
   2. Missing deadlines

 In this article, we would discuss about the factors to consider or look out in a vendor for making an outsourcing engagement successful.

• Governance Model
• Transition
• Communication
• Management Connect
• Outsourced Team

Governance Model plays a pivotal role to make any outsourcing engagement successful.

1. Non-discloser Agreement (NDA) should be in place as outsourcing can be a tricky situation when you are working on a product, as the idea and data is confidential
2. Also Clearly defined Statement of Work (SOW) and Service Level Agreements (SLAs) are a must at the outset of an engagement
3. Dedicated project manager is very important for seamless delivery in terms of meeting the timeline and quality of the product. He becomes your single point of contact and makes sure the work is tracked using various Project Management Tools on daily basis and deadline are met for delivery with no last minute hiccups

Transition is key process at every stage of the project. It’s an ongoing process and should never be underinvested in. There are different ways to facilitate the transition and make it successful. Knowledge transfer varies on case to case basis like:

1. In some situations, the engagement may involve transitioning services performed by an existing provider to a new provider
   1. Perform Due Diligence to the define of all the reasonable factors like, number of resources or time required to complete or execute the project
2. Completion of project, handing back over the project to the owner
   1. The project should be well documented both functionally and technically to make the process hassle free
3. Key members in the project should connect at regular intervals and if required travel onsite/offshore to seamlessly complete the activity
   1. In few, knowledge transfer might be from one resource to another in case of existing resource leaving the project or addition of new resources to the existing project
   2. Notice period should be defined for the resource before leaving the ongoing project so that the transition is smooth.

Communication arrangements should be made for daily interactions between the onshore and offshore teams.

1. There should be regular email/phone/skype communication, in between onsite and offshore teams
2. Besides regular email/phone communication, in-person visits by the onshore and offshore teams help build a sense of ownership and team spirit
3. Agile processes such as daily scrums and stand up meets involving parties at various sites also helps in tracking day to day activities along with understanding the larger picture of the project roadmap
4. Offshoring means difference in time-zone, so arrangements like time-overlapping (starting and ending day late) to make sure you work together on the project although at different locations

Management Connect helps in dealing with issues and ensures sound implementation. It is equally important and imperative for both the parties to communicate transparently and proactively so that issues are identified early and addressed effectively.

Having a robust structure where senior management from both sides participate in monthly or Bi-weekly or meets for review and retrospective helps

1. Spirit of partnership goes a long way in addressing teething issues in an effective manner
2. Aligning the roadmap in terms of
   1. Partnership
   2. Business
   3. Product

Outsourced Team should be viewed and engaged as an extension of the onshore team. Focus should be on teams’ ability to deliver. The right partner should bring together a right team for you with a mixture of

1. Certified individuals
2. Individuals with
   • Right Attitude
   • Right Aptitude

Outsourcing also means people from different cities, countries or continents may come together to work for one common cause. Hence cultural trainings are also equally important to understand each other within the team better. This helps in building team spirit. There should also be a robust training and workshop plan for technical upgradation of the team which helps product quality improve and sustain.

Outsourcing can help cut down cost, augment staff, faster time to market but choosing the right outsourcing partner and evaluating it on above parameters is equally important for making outsourcing engagement successful.