10 key factors for successful offshore IT outsourcing

Thomas Tøth, consultant for Right People Group, expert in IT outsourcing

Outsourcing IT services, especially to offshore experts, is a complex task. While the allure of cost reduction and specialized software development skills is strong, many companies miss the mark on quality and savings. To navigate the intricacies of offshore outsourcing successfully, you need a well-crafted strategy and meticulous execution.

Here are ten vital factors to weigh when considering offshore IT and software development outsourcing:

1. Picking the right outsourcing destination, partner, and model

You’re faced with a lot of choices when it comes to outsourcing destinations and partners. The wrong decision can lead to wasted resources and poor service quality.

The solution? To choose the right IT service providers, evaluate political stability, language proficiency, and technical expertise in your chosen destination.

Make sure the outsourcing company’s business model aligns with your needs for a seamless partnership.

2. Identifying tasks suitable for outsourcing

Not every task in your IT operations should be handed over to external providers. The problem arises when you outsource a task that’s too complex or ill-defined, leading to errors and inefficiencies.

To avoid this, dissect each task based on its complexity, documentation, and error tolerance.

Choose to outsource those that fit well with the capabilities of the outsourcing services.

3. Aligning business goals with your IT outsourcing partner

Entering into an outsourcing contract without aligned business goals can result in a one-sided relationship. This imbalance can lead to dissatisfaction and failed objectives. The key is to create a sustainable win-win relationship. Balance your business goals with those of the outsourcing companies to ensure mutual benefits and long-term success.

4. Effective knowledge transfer

A common issue in outsourcing is the gap in knowledge transfer.

Your in-house team may know the ins and outs of your IT systems, but if this knowledge isn’t transferred effectively, the outsourcing company will struggle.

Address this by setting up a structured process for knowledge transfer, ensuring that the dedicated team from the outsourcing company is well-equipped to manage your IT services.

5. Governance and management

Poor governance can lead to misunderstandings and poor performance.

The absence of clear SLAs and KPIs can make it difficult to measure success and implement improvements.

The solution is to adapt your in-house team and processes to work efficiently with external service providers. Establish clear SLAs and KPIs for proactive problem-solving and continuous improvement.

6. Process maturity and standardization

Your in-house team might have a way of doing things, but resisting the proven processes of mature outsourcing services can lead to inefficiencies.

Embrace standardization and use it as an opportunity to improve your own processes and add value to your outsourcing business model .

7. Language and cultural differences

Ignoring language and cultural differences can lead to communication breakdowns. These barriers can significantly impact the effectiveness of your outsourcing model.

Invest in culture and language training for your in-house staff to bridge these gaps effectively.

8. Mastering virtual communication

Virtual communication is a daily activity, but when it comes to remote collaboration, many teams struggle. This can lead to misunderstandings and inefficiencies.

To solve this, invest in training your team in the nuances of effective virtual communication, especially when dealing with offshore outsourcing.

9. Maintaining employee morale

Outsourcing can often lead to a decline in the morale of your in-house staff. They may feel threatened or undervalued, leading to reduced productivity.

Open and honest communication about the benefits and reasons for outsourcing can help maintain a positive work environment.

10. Seek professional guidance

Going it alone in the complex world of IT outsourcing can lead to costly mistakes. These can be hard to rectify and can damage your business in the long run.

Seek professional guidance in project management and outsourcing contracts. This can help you navigate the complexities and ensure that your outsourcing efforts align with your core business objectives.

Conclusion

Outsourcing IT operations can offer significant advantages in cost reduction, access to specialized skills, and more. However, it’s not a decision to be taken lightly. The right sourcing strategies can make all the difference in achieving successful business outcomes.

Do you need an Outsourcing expert?

Contact us through the contact form below or send us an email at info@rightpeoplegroup.com for a CV and hourly rate of a consultant who matches your project and requirements. Read more under outsourcing expert.