IT Outsourcing: Few Characteristics

If you believe that nothing can substitute communications with face-to-face discussions, you can look for an offshore OSP that has the head office in the country. Otherwise, telephone conversations, e-mail, and instant messaging will make it possible to solve almost any issue. Sometimes telephone conversations aren't useful because of the language and psychological barriers, so the best means of communication are e-mail and instant messaging. Language and/or cultural problems might contribute to all kinds of mix-up, so ask for the resumes of those employees who are going to be responsible for each part/stage of the project to make sure they are fluent in English. Even communication with your neighbor can be difficult when you don't focus your attention on it.

Intellectual property problems

Obviously there are intellectual property problems but it can be solved with tactful management. A vendors and a customer usually don't pay each other for their intellectual property rights. Even more important is the answer to the question who will own the rights to the product that is going to be created, as well as the technologies and solutions that might be necessary to develop in the course of work. If you wish to be a sole proprietor of everything, the OSP will make you pay for it this way or the other, so try to be reasonable and find a compromise. However, if a third party's intellectual property is involved in the project implementation, you should take care of proper agreements and licensing.

Schedule problem

Very often what goes wrong is the schedule. Sometimes rescheduling may help, but you have to realize that the project is at risk anyway. If a milestone is delivered late, and if you're not satisfied with the communication or the quality of work, I believe it's time to change your vendor. You can settle your own schedule with proper discussion.

Neglected customer

Vendors place the highest emphasis on the most advantageous projects. Insist on appending to the contract a project implementation schedule that includes as many milestones and deadlines as you find it necessary; stipulate for tough financial sanctions in case the vendor fails to meet any of the deadlines; agree on some incentive payments for completing the project on schedule. And at last, try to build partnership relations with the vendor whose work you are satisfied with and whose high-value customer you want to become. You will not be a neglected customer.

On visiting the vendor

If you want to visit your vendor every now and then to make sure that your project is not neglected, you may be required to schedule such visits and notify the vendor about them in advance. Some OSPs might even demand additional payment for the expenses they incur due to such visits. If your project is a long-term and expensive one, visiting your potential vendor before you make the final choice is a good idea. In other cases, it can be a waste of time and money. You and your OSP should understand each other's concerns: you can't let your project develop as it might, while your OSP shouldn't be distracted from work and kept nervous. You can look for an overseas OSP that has the head office in the country to avoid traveling offshore. Such businesses are a lot better to deal with from the point of view of liability, but their services usually cost more, too.

Iterative approach

The iterative approach typically has the form of a spiral and allows the project phases to overlap. It is not like the traditional highly structured waterfall approach with a fixed plan-do-test sequence of project phases. Applying the iterative approach, you can divide a complex project into manageable components and achieve the expected results by working smart, not hard. Requirements changes are easier to take into account and adjust, risks are usually acknowledged in an earlier phase and thus mitigated, system components can be reused, and integration is facilitated. Whether you apply the waterfall or iterative approach, you can have a project delivered and paid for in parts, and this is one of the best ways to minimize the risk for you and your vendor. While one iteration is underway, the next one can be started. Basically, it is efficient.

Project implementation

Communicate the general issues with the top management of the OSP. Other things have to be discussed with the key personnel such as managers and team leaders. If you try to communicate with the rank and file, it can lead to commotion or even chaos. So contact the right person.

Forecasts for outsourcing

The Forrester Research consulting firm has predicted that, in the next 15 years, 3.3 million U.S. service industry jobs and $136 billion in wages will move offshore to countries such as India, Russia, China, and the Philippines. Data from IDC and Meta Group shows that 60% of midsize companies outsource their HR functions, including related IT systems. Use this opportunity and don't miss it.

Time zone

Time zone difference may be an advantage if you are interested in "round-the-clock" programming. This means working with the overseas team in shifts, so that programming goes on 24 hours a day. The time zones problem arises when your developers are continents and time zones removed. Just imagine: you arrive at the office at the same time when your vendor's employees are going to leave. The best way to solve this time zone problem is to set a mutually acceptable time for online meetings.

All the best!