How To Outsource IT Software Development Project

24 April 2019, 5:47 pm EDT By Staff Reporter Tech Times

In this modern age of technology, the traditional idea of workplaces has been decentralized and deconstructed. With effective IT systems, one can create teams outside the office or, better yet, hire services of another company to do the job at a reduced cost. This is the concept of nearshoring. In nearshoring, companies can guarantee that the agency who does the back-end and front-end tasks can perform effectively as they are within reach geographically.

Partnering companies can easily find common grounds, as they are bound by similar financial and legal constraints and thus establishing systems addressing these considerations can be managed. Also, the small time-zone difference and fewer cultural differences make nearshoring a better option, so any concerns can readily be negotiated and solved. Actual meetings to negotiate or settle big decisions can also be readily done, as travel expenses are less expensive, and physical contacts and actual observations can promote greater control and timely decision-making.

Choosing The Right IT Supplier

To manage the risks of offshoring, there is a need to carefully select a good and reliable IT supplier and to check whether their performance, capacity, and special skills are in accordance to the partner's goals. To do this, one has to ask for a Request for Proposal (RFP), Request for Information (RFI), as well as IT Supplier Evaluation. The RFP should be comprehensive and transparent enough for the partner to discern and make a good projection as to the estimated workforce and its costs involved, the general idea of the contract, and possible risks and how to mitigate them.

The RFP is just a part of the first step on how to outsource an IT development project. After considering the RFP and, hopefully, finally selecting an IT supplier, the partner may proceed to the next steps on how to outsource an IT development project.

Contract Procurement And Risks During This Phase

The contract procurement stage is as equally important as other stages. Contracts are extremely important, as they will allow parties involved to foresee all aspects of the job, hoping it will empower them all the way. If a contract is well-defined, then the partnering agencies can avoid risks and eventually avoid poor IT outsourcing operations.

Common risks that may happen in this stage involve the following: failure to thoroughly prepare contract documents; failure to negotiate with questions and solutions in the contract; relationship problems among several providers may arise; changes in the agreement may suddenly arise; there might also be a breach in trust in one of the parties with one of them selling the software to another company; or worse is the unauthorized disclosure of confidential information. In the worst cases, some disagreements may never be resolved, and there is a need to terminate the contract.


Service Transition

When these risks are finally resolved, then the client may decide to move on to the service transition phase in which services from an old team will be handled over to the new team to achieve operational performance. The old team may refer to clients who decide to outsource their service to a new team. It could be another provider of a service, which in most cases, would still be the client.

This phase requires a lot of careful planning to accommodate the new company or agency in the process and, at the same time, avoid any disruption in normal operations with customers and the business in general.

This phase also comes along with corresponding risks that every client and partner agency must consider. Inadequate knowledge and skills transfer may occur. This may happen because the company have overlooked the nitty-gritty and gaps in the operations. There might also be an unwillingness of staff members to share their knowledge, or simply, the new supplier may not have enough access to certain skills required.

Problems may be compounded and may result to degradation of service quality, partial or full interpretation of service, project delays, additional costs, and unharmonious relationships among workers.

Outsourcing an IT software development project could be the answer that you are looking for so your company can expand or move on to achieve higher goals. However, it involves careful planning, a clear foresight, and effective backup solutions and mitigating steps. Even in the RFO/RFI stage, the client and other parties involved should work hand in hand in foreseeing risks and finding solutions to address them. They may also seek the services of other agencies and experts for further advice and assistance.

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