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5 Outsourcing Tips for Building a Better Business

5 Outsourcing Tips for Building a Better Business


You can be an inexperienced startupper, a rookie being ready to dive into the world of outsource opportunities or a skilled swimmer who knows all the pitfalls of outsource ocean. No matter what level of your swimming you are at, you’d like to hear our advice and ruses of outsorce before setting off a new business venture.

IT outsourcing popularity increases, particularly among pledges-startupers as well as small and medium-sized business limited in resources but eager to get a piece of the delicious cake in the world where technologies and urgency have become almost everyday life necessity. It is available and proven strategy that helps companies to use the best digital technologies and implement the best servicing.

Customers often face communication problems between providers and themselves, don’t know how to build a right business model, close a deal as well as make profitable long-term and, what’s more important, trusted relationships with your partners. You would hardly like to risk your business and hand it over to some strangers after having put your heart, soul, time and money in it. Outsourcing may seem a gamble, it really has its disadvantages, especially at first.

Not long ago, we wrote an article about why outsourcing works well for business. We will transcend details and get right to it: how it’s actually being done. Here are top 5 tips for those who want to use IT outsource. We hope they will allay your fears, open some finesse of IT outsourcing and also will help to start with outsourcing.

Choosing the right partner

Before starting, take a moment to choosing of a clever and reliable developers team you will work with.

Ask for a recommendation

Usual outsourcing criticizing includes a risk of obtaining service inappropriate quality, actually not at the level you’re counting on. That is why if you have acquaintances who have cooperated with the particular outsourcing company and were satisfied with their service quality, then better ask them for a tip.

Visit virtual forums

Take a moment to outsourcing sites viewing. Such sites as Upwork are an excellent way to increase your contacts. They give an opportunity to see detailed profiles and portfolios expected providers and get feedback on their work from other customers. Former customers’ recommendation can significantly influence your decision when choosing an outsourcing company as well as lead you to the best one.

Choose among company and freelancer

IT outsourcing agencies’ advantages are obvious. They usually hire professionals who are quick to replacing if they don’t fit the project. Many firms also use a check and counterbalance system and take up the whole development therefore mitigate any risks. With so many skilled engineers and experienced managers, they take full responsibility for workflow and all problems solving if needed.

Anyway, regardless of hiring a company or a freelancer, find out if they developed themselves or they gave this work on outsource to anyone else. Work with the mediation can hinder communication and therefore the entire development process.

Hire workers with special skills

You don’t want to be a “guinea pig”, do you? So, provider’s experience and specialized skills must be taken into account in your final decision. Before hiring a provider, make sure, he is appropriate for the tasks you will set to him. Choose a respected company who has experience working with a project similar to yours. It is particularly important when working with big, technically difficult projects.

Conduct interview

Analyse all applications, narrow the list of potential suppliers down to 4-5 candidates and go to next stage: interview. Here are some compulsory tips for the interview:

  • Be a specialist. Prepare several technical questions to examine knowledge and skills of interviewee.
  • Ask them about previous projects contributing. Were they involved in full project or only its small part?
  • Resist the temptation to hire the first candidate you have conducted an interview, even if you had liked him. You should compare them.

Do you have a question?

Matter of price

Cost is another important factor when choosing outsourcing company. So how do you test the water before the jump?

Ask the price

Never choose provider only due to price - proceed from ratio costs/value. If work is worth it, be ready to pay a good company-developer. You don’t have to squander but also don’t be overgreedy.

Unlike freelancers, companies often charge much. But you could still find a good deal. They offer the high level of implementation for significantly less pay. For instance, IT outsourcing to Ukraine provides an opportunity to get quality product for the price that will meet any budget.

Choose a correct model of payment

Use a model of full payment “all inclusive” for outsource of Scrum or Agile development. This structure requires you a one-time payment for full service instead of hourly rate. It is based on high productivity and offers cost full transparency.

You could start from task-oriented form of payment to understand how well this partnership works. Divide payments into well-defined sprints appropriate to definite production stages. Make a monitoring template to assess their work. It is recommended to pay 20-30% of total cost in advance and the rest - at the end of a definite task. Or to pay gradually for each finished sprint.

If your partners demonstrate the ability to provide the result constantly, you can go on the fixed price model. There are still several things to keep in mind. Fixed price agreement works better in case there is a certain amount of work than in startup. In fixed price model you provide specification at the beginning, have an approved budget and pay for finished service. When having signed the contract, all changes are undesirable.


Even if you have found a good developers team at a reasonable price, it’s not over yet.

You will have to struggle in the pool of outsource risks and make some additional efforts to provide your business security and contribute to a good working relationship.

Write a big contract

The contract must conclude as accurate information about project terms or definitions for Scrum outside groups, expected productivity, roles, business processes, payment terms, deadlines, maintaining, copyright and release strategies as it possible. It sets expectations “from the go” and serves as a guide to action in future. In contract farming make sure it contains all the details to avoid confusion and misunderstanding.

Address legal issues

Security and privacy are absolute necessity for risk reduction related to knowledge-sharing. To protect your business from theft of intellectual property, add an NDA to your contract. Provider must understand that all intellectual properties and source code rights must be at yours disposition.

Let a lawyer examine the contract before signing. You should also keep records of all changes and email.

Create flexible conditions

Outsourcing partnership is that you and your provider are working hard to make win-win conditions. When you have discussed all details, be ready for balance maintaining and leave room for adjustment and compromise of you or your provider.

Advice for a successful partnership

You have signed a reliable contract with provider. However, a good partnership goes much further a contract. But it doesn’t happen on its own. Here are the most important components of building strong business relations.

Establish successful development

Any successful project starts with business tasks and processes understanding, specific requirements and finished product clear vision. You will be unlike to find yourself in project nightmare because of incorrect transmitting tasks to outsourcing company. Provide them with a project context so that your vision fits their results. Set the tone through a comprehensive discussion about project details, like metrics, terms, quality level and procedures. The better you express your tasks, the greater chance of success it will be.

You will probably have not much personal contact with a team, so bridge this gap through transparency methodology. Stay open for communication by talking via Skype.

Outsourcing always globally implies a command of English, so it’s better to make sure that a candidate knows it. People you are working with are important to understand clearly what you are talking about, especially when it comes to software development. Communication problems can cost you a lot. You need to make an effort to speak slowly, articulate and express your ideas more efficiently for those who haven’t got English as the mother tongue.

Do you have a question?

Build an interactive process with a client

Don’t cut off the contacts with your outsourcing partners and hold tight. Make a review on their work, offer some improvements.

Set a project management system up to set tasks, track time and keep informed.

Make a schedule of regular checks with your outsourcing partners to communicate during the entire project.

Be ready to negotiate on difficult problems.

Treat the provider as a team member. Invite him to become strategic partners.

Be a client pleasant to work for. Establish good relationships with your providers showing respect, gratitude and advice patency.

Setting effective communication channels is crucial to your project. Your team working on outsourcing must have an experienced manager knowing the team well, being able to monitor the work to make sure it fits your vision, ready for detailed and transparent report and to facilitate the development process in any way. If PM forgets about his weekly reports and he is constantly not available, it can be a signal to stop relationships with this provider.

Final recommendations

Your strong sense of ownership can make you fully commit yourself but sooner or later it will juice you off. So how can you back off and leave room for confidence?

Always stay in cycle

You should understand, outsourcing is not shifting work to another’s shoulders. You made your own project up. You are involved in it like no one else. You must manage its development, make sure everything goes right. All you need is a well-thought management structure that will describe how to run your business. But you don’t have to take the whole world on your shoulders. Don’t miss the chance to make more at a lower cost and quicklier.

That’s what outsourcing is!

Do you have a question?

Don’t obsess about control

In other words, let your team members be free to do the job you have hired them. Don’t manage each their step and never limit their creativity. Grow your business.

To find a right provider and to figure out how to build a competitive business with a big potential for profitability is getting harder over time! As a new player in IT outsourcing or someone who has already an existing partnership, you would like to know about best outsourcing practices and use this advice for building a better business. Business partnerships are not easy. Like any other business relationships, they require effective management but as soon as this partnership starts operating, it all will be amply repaid.

So go on, succeed!
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