An Insight into the Technology world.
Analysis and Insight from Savvycom Team.

Working with the IT outsourcing companies may benefit us a lot, but it requires carefully efforts regarding planning and execution. Below are 10 necessary things to keep in mind, if you are thinking about outsourcing IT or IT-related activities.

1 – Destination, Partner and Model – first criteria for IT outsourcing

We have lots of things to consider just in this division, but Savvycom would like to show out 3 main points that you can’t ignore.

  • First, consider carefully about the destination. You had better attention to political stability, English proficiency, and access to competent resources. Vietnam is a potential destination for you to think about along with India or China. Please check out why you should outsource software development to Vietnam here.
  • Second, who can be your partner? You can make a long list of potential IT outsourcing companies, but measurement to choose the most appropriate one is not easy. Again, it’s important to list out criteria to judge which is the compatible IT outsourcing company for your business. Savvycom has been done that task for you just in case you need more references. Please contact us for FREE CONSULTATION and access to the vendor list in Vietnam.
  • Third, which IT outsourcing model?

If you select IT pure service sourcing, you may consider whether your organisation is able to handle this type of cooperation with complex processes and governance.

You want an IT outsourcing company to provide a full packet of service and you control through your existing organisational setup? So, are your project managers capable of leading a culturally heterogeneous and geographically diverse group of employees? Utilise an outsourcing model which incorporates elements from both, is it possible?

You may have heard about team-based and fixed cost model. Interesting in learning more about them and what is suitable for your requirements? Please keep subscribing us to update in the following post, or contact us directly to find out now.

2 – Deconstruction as demand to Outsource or Not

Which tasks should we outsource? Whether a task is good for IT outsourcing based on a variety of factors but mostly about business demand for business management and development such as exclusivity, complexity, maturity and risk tolerance.

For example, if your business is working in the logistics industry running a few warehouses and trucks for delivery as well as supply chain, you may be excellent in operating the whole system, knowing how to process and keep it working well. However, to manage it better and reduce human resource costs, you’d better have a computing system or software tools. Will you be willing to build a software engineer team or even an IT department just to create and maintain that system? Do you ever think about managing a technical team that you do not even understand exactly what they are doing? That also means you will be distracted and share your time for extra tasks. Besides, there are lots of risks that you could never be able to handle them unless you have a deep knowledge of technology.

So, that’s time for you to think about outsourcing! Looking for a trustworthy technology agency is a way out for you to reduce costs, increase effectiveness, as well as save your time and your budget.

3 – Encouragement for IT Outsourcing companies

IT outsourcing is like a long-term investment. This partnership will not be successful if you ignore to maintain the enjoyment of the cooperation with IT outsourcing company. Keep a win-win situation is the way for both of you to succeed in that partnership.

Therefore, it’s essential to keep a balance between your own business case and the IT outsourcing company’s counterpart. Consideration is concluded in one single question: how to assure that the IT outsourcing company is encouraged to help us reach the goals in our business case?

Following as contract terms is a good thing, in case both of you are able to do it. The negotiation should be processed under the respect of each other. Pushing down the price, putting more strict terms or mentioning that many suppliers are willing to lower their prices significantly to win the contract will just lead to short-term fulfilment or negative results.

4 – Transfer of Knowledge in IT Outsourcing Projects

Normally, IT outsourcing projects is a contractual 6-month transitional period. During the period, the client’s employees are supposed to communicate knowledge to the supplier’s consultants. “When I talk to IT managers about the amount of time it takes for a new employee to get up to speed, most state that it takes up to 2 years”. With that perspective, it is not so surprising that most companies who outsource IT complain because the supplier lacks knowledge about their business!

Setting up a structured process based on an analysis of the concrete needs of the supplier’s consultants is the ideal solution for effective communication for knowledge transfer. Subsequently, a plan should be devised which:

  • Specifies the knowledge to be transferred.
  • Identifies people responsible for the transfer.
  • Looks for methods that are the most suitable for the type of knowledge at hand.
  • States how long the partner must set aside for the transfer.
  • Sets up the environment and means to evaluate whether the goal has been met.

5 – Governance in Organizations Working with IT Outsourcing Companies

Working across organisational and geographical borders is substantially different from working with your colleagues who you talk with every day. Many businesses transfer tasks to an IT outsourcing company but forget one important thing. Can you guess?

They must also adapt their own organisation to a new way of working, including “recipient organisation”. It is accountable for making sure that the outsourced activities are completed properly, also maintaining the contract and the relations to this IT outsourcing companies. A transparent and efficient governance structure, which 2 sides agree on, as well as detailed service level agreements (SLA) and key performance indicators (KPI). Those deals allow proactive problem solving and improve cooperation.

6 – Maturity of Processes – Listen to IT Outsourcing Supplier

The processes of big international IT-suppliers are often at a high level of maturity. They also many experiences before establishing a partnership with IT Outsourcing Companies, so: Listen to them!

Standardisation is an essential part of the added value one may get from an outsourcing agreement with one of the large suppliers.

If you determinedly insist on doing “your way”, they are likely to accept it. However, it is also likely to end up with poor communication and coordination. Their standards are better and you can see it as a chance to improve the maturity of your own processes.

7 – Sociocultural factors and Language – Have you considered this challenge?

You should carefully consider English fluency as a vital factor. Communication about IT-field language without English fluency seems to be not easy at all.

Likewise, it is challenging to work with people from vastly different cultures, if you are not used to doing so. It’s a good idea to open culture training too.

With the right facilitator, software engineers in the IT outsourcing Companies will learn about the new and different culture they have to work with, and probably they could find a number of new perspectives on the current cultural background to find out the tools to help them handle the cultural gap.

8 – Virtual Communication with IT Outsourcing Companies

Regarding far-away cooperation, some still have difficulties with virtual communication, although we do it every single day. Reason? In most cases, we know the people we interact with and we tend to do alright.

In contrast, with remote cooperation, we basically don’t know people very well. And we need to improve at virtual communication, to exchange information in remote partnership successfully.

Good virtual communication is not just about having the best available one. In fact, technology alone will not work out the challenges we are facing in right now. But technology is the main factor can help.

Additionally, we had better learn how to communicate in a new and different way with people in remote cooperation. To do that, you should take knowledge about the quirks of virtual communication as well as practice.

9 – Keep up the Motivation of your employees despite IT Outsourcing Initiatives

Many managers experience that their own employees’ incentive declines in relation to the time initiatives of working IT Outsourcing Companies come in. Their confidence and self-esteem are down because they are not handed in the job in the company they are working for. “How can some foreign guys who just graduated university do the job I spent 15 years learning how to do?” they might wonder.

If your employees think in that way, your attempts working with IT Outsourcing Companies will eventually flop. Offshore IT consultants may make some simple mistakes, employees will consider it as incompetence. They may even avoid interaction with new consultants. Therefore, perceiving necessary understanding and domain knowledge for your company is hard for the new people.

So, how can we fix the problems between employees’ motivation and IT outsourcing consultants?

Perhaps there are 2 helpful solutions for these:

  • Open honestly about the reasons behind ‘moving jobs’ to IT outsourcing companies
    Support the employees in the adaptation to the new organisational setup
  • To simply conclude: The main groundwork of successful IT outsourcing projects is solely the employees. So, preparation for the organisational changes should be one of the first priorities.

10 – Get Professional Guidance for the whole IT Outsourcing Process

It’s best if you can reference and receive professional guidance from experienced IT outsourcing consultants. They can show you both the positive and negative sides of this process, and guide you through some lessons they have learned during cooperation with IT outsourcing companies.

It’s difficult and expensive to improve cooperation if there’s not a good thing happen. So, you may want to be precautious and avoid it right for the first time.

So, to find out external guidance is the optimal option, especially with the field you are not familiar with. Make it right the first time is much better and cheaper than solve the gone wrong situation at a later stage.

Do you know now how to find the best match IT Outsourcing company?

Those 10 ideas are just for you to consider if you’re still wondering IT Outsourcing is the right answer for you or what kind of company is suitable for your requirements. We must say that direct consultation is better for you to understand or to make a decision. Or, listening to what other companies have done and achieved is also a reference.
Let’s check out what Savvycom’s clients talk about us and about Outsourcing their software development projects to Vietnam.

If you have any question or not sure about outsourcing IT services, please do not hesitate to contact us for a free consultation and get the vendor assessment.

  1. Savvycom Headquarter: 12th floor, Viet A Tower, Duy Tan Street, Hanoi, Vietnam
  2. Savvycom US: 83 Devonshire Ave #1 Mountain View CA 94043, US
  3. Savvycom Australia: Level 2, 24-26 Falcon Street, Crows Nest, NSW 2065, AustraliaPhone: +84 24 3202 9222
    Hotline: +84 32 657 2886
    Email: contact@savvycomsoftware.com
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