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Outsourcing for Enterprises – The Need, The Strategy & The Setup

Published: October 8, 2021

Enterprises are evolving.
Getting Agile.
Getting Better.
Getting Smarter.

With constant market shifts, changes in trends, and industry fluctuations, especially during COVID-19, it’s pretty hard for entrepreneurs and executives to adapt quickly to keep their business running.

These changes are making businesses consider alternate ways to survive – whether through operations, hiring, scaling, or cut-backs.

With survival in question, most enterprises are now increasingly choosing Outsourcing as a solution to improve, expand or just stabilise their business operations – and for good reason.

The global IT outsourcing industry was valued at USD 232.32 Billion in 2020. It is expected to touch 435.89 Billion in revenues by 2028. (Grand View Research)

Outsourcing for enterprises is a great way to continue operations and consider scaling and expansion, while being prudent with their investments.

The trend is not new, since many successful companies worldwide have been outsourcing their projects to vendors – offsetting costs, and hiring+training hassles. To maintain continuous growth and productivity, you need to balance internal staff and outsourcing resources.

However, to relative newbies considering Outsourcing (CTOs, Business heads, Founders) there are a few tenets, principles and basics to consider to get the best out of Outsourcing, since there’s a lot more about it than just handing over a job to someone experienced. Let’s begin…

Outsourcing: An Overview

Outsourcing is a deep-set business practice that serves to enable or accelerate business growth while offsetting costs incurred in localized operations.

The idea is to outsource tasks, processes, functions or entire roles to a vendor that can deliver.

For Software organizations, that means outsourcing code, features or product development to a developer or a team of developers in their country (remote outsourcing), near their country (nearshoring), or to a different far-off country (offshoring).

Each organization considers costs, reliability, and experience of the outsourcing vendor to increase the value proposition in Outsourcing as an option.

Outsourcing is to out-task some of your services/projects to another company/a person who doesn’t otherwise work for you on a project-to-project basis. Outsourcing is considered a reliable pillar to scale up your business operations while easing out on investments.

Also Read: Ways Outsourcing can help

Types of Outsourcing that is Popular Among Businesses

Before you decide to outsource your business operations, it’s essential to understand the types of Outsourcing picked mainly by businesses.

Onshoring: Assigning the job or task to an outsider living within your country. For this situation, you can consider organizing face-to-face meetings daily, weekly, or monthly to discuss the prerequisites, work status, and other project management subtleties.

Offshoring: Hiring an organization from a distant country to perform specific business work. If the outsourced company is an auxiliary, i.e., another branch of your company — it is prominently known as in-house offshoring.

Nearshoring: Assigning a job/task by recruiting an organization near your nation or within the same time zone. For this situation, you can facilitate face-to-face meetings with the nearshore vendors because of the proximity.

That takes care of your probable options.

Make sure to consider and vett all 3 means for your requirements.

The Need to Outsourcing for Enterprises

From cost-cutting to saving resources or time or developing quicker – there are a myriad of reasons to justify the need to outsource. Even big companies such as the FAANG outsource their services, allowing their in-house team to focus on core competencies.

For enterprises, outsourcing makes all the more sense since they can ease in their in-house operations, manage complex software, and save costs while doing that.

Complex operations + Millions of Lines of Code + Need to expand + Need to add features or product + Need for Flexibility to Scale
results in
an Absolute Need to Outsource.

This arrangement allows your team to use their day wisely, making an effort to deliver on core functionality while the outsourcing team manages, updates and fixes code and works on routine-based tasks every day.

Outsourcing can help you provide an edge over competitors. It can indeed save money, but that’s not the only reason. Many reasons show the need to outsource by saving your time, money, and effort.

Here are a few:

  • Foster higher flexibility to scale up/down your team as per project or task requirements.
  • Fast tracks the development of your digital product.
  • Provide Access to an elite pool of talented development teams.
  • Improve services, customer experience, and performance quality.
  • Help Utilize the latest technology trends and tools to enhance your projects and workflow.
  • Offer reliable workforce ready when you need them delivering fruitful results within deadline and budget.
  • Deliver as per industry’s pace and allows business leaders to track the data.

Also Read: Future of Enterprise Software Solutions

The Strategy You Need to Follow While Outsourcing

You must execute a robust and determined approach to incorporate outsourced members into your team to guarantee a positive outcome. Below you will find the four strategies that will create effective Outsourcing for your enterprise.

1. Address Communication Issues

The thumb rule while Outsourcing is to stay away from freelancers who struggle with communication. Also, it’s a good idea to replace email communications with a robust and faster solution. For example, Slack, Zoom allows your team to put together discussions into explicit channels and threads.

You must also incorporate Trello, Basecamp and similar project management tools to get an accurate hold of the progress.

2. Develop a Virtual Space

To include a remote team, it is also necessary to establish a digital work ecosystem based on project management, communication applications, and other cloud-based platforms. For example, Zoho, ClickUp offers a central hub for your remote team activities, communications, and task management.

3. Build Your Team

Forging Long-term relationships with a vendor is a great way to encourage a culture in your ever-evolving remote teams. However, it does not mean that they should stop taking up new talents. More the company develops, the better access to talent you will have – particularly to manage the expected workload. Try looking for staff augmentation to build your team services.

Remember that there are certain definitive advantages offered in a Managed Service –

– Constant Team allocation
– Contingency plans
– Guarantees of Delivery
– Proven Methodology of delivery
– Clear outline of expectations and Milestones
– Extra talent to scale
– Clear IP protection clauses

The Set-Up Once You’ve Chosen the Software Outsourcing Vendor

The most crucial step to develop an effective enterprise is to choose the right software outsourcing vendor. For many people, choosing the perfect outsourced company can be a bit daunting, especially when there are so many out there.

Here’s what you need to set up to make sure you’re on the right track:

1. Smooth Communication & Workflow

Smooth communication and workflow is the most crucial step in Outsourcing. Your outsourcing partner must be fluent in English or your preferred language. In addition, their workflow should match your workflow throughout the software development life cycle.

2. Elite Pool of Software Developers

Outsourcing enables businesses to avail of the most talented IT software developers globally. The job of an outsourcing company is to bring together the best software developers from all around the globe & use their abilities to create the best possible product for you.

3. Standardized Security Protocols

In a world increasingly driven by advanced tools & technology, IT security is more important than ever. Please make sure you choose an IT outsourced company with up-to-date security protocols to protect all data and software products.

4. Quality Experience

Always check references from potential IT partners, past customers, and completed projects. This information will give you a deep insight into how your IT business works, how the vendor can work in your processes, their workflow, and the quality of their software products.

5. End-to-End Service

Whatever is trending today or what you might need today may not be what is trending or what you require tomorrow. The best outsourcing companies specialize in many areas to manage your project from a holistic and highly experienced approach.

Final Thoughts

Outsourcing creates value for companies of all sizes and from all corners of the world. It can help you scale your enterprise and grow. However, it can be a double-edged weapon if done indiscriminately and without due research. With this blog we have tried to elaborate on the need, strategy, and setup to develop a continuous workflow and compete when Outsourcing.

Let us know in the comments section if this blog was helpful to you and how you leveraged Outsourcing for your business.


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