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Optimal Outsourcing Partner

Choosing the outsourcing partner for your project is a very important task, since the quality of collaboration with your outsourcing partner has a huge impact on success of your project.

Let's assume you have already decided to outsource and have chosen the outsourcing model. Now is the time to decide who you want to work with. In general you can choose between freelance experts or an outsourcing development company.

Freelance expert

Although in this article we focus on examining the hiring of an outsourcing development company, we would like to point out advantages and disadvantages of hiring a freelance expert first.

Pros:

  • no need for good experience in managing complex teams

Cons:

  • managing a lot of freelance experts might become a challenge
  • hired freelance experts do not have common standards in processes and tools
  • keeping track of scattered resources is time consuming
  • less resource control - if the freelance expert is not working on-site with your team
  • laws in some countries prohibit freelancers to solely work for just one customer
  • recruiting every single freelancer is a tedious and time consuming process

Recommended:

  • for small external support of well-established internal teams
  • if you have no or little experience in managing complex teams

Outsourcing software development company

As the hiring of freelance experts has some advantages and disadvantages, so does the hiring of an outsourcing software development company:

Pros:

  • offers bundled resources and know-how
  • no need for recruiting process of individual resources
  • external resources already work as a team on the same location
  • external resources can work full time on your project since there are no legal restrictions
  • very good resource control since the management of the outsourcing providers is also co-leading the team
  • much easier accounting and billing since all the work is documented transparently and systematically by the outsourcing provider
  • team members can be quickly replaced
  • lower risk compared to hiring freelance experts

Cons:

  • need for very good experience in managing complex teams
  • slightly higher costs compared to freelance experts

Recommended:

  • for complex and long lasting projects where new know-how needs to be applied quickly
  • when the project manager has experience in managing complex teams

Due diligence

When choosing an outsourcing company there are several critical parameters which must be concerned in your analysis of potential candidates:

  • physical and cultural closeness
  • skill-set & experience level
  • reputation & references
  • price

Physical and cultural closeness

It is very important to be aware of some major cultural and technical differences that a physical distance to your outsourcing provider dictates. Nearshore providers live and operate in a same or very near time zone as yours, have similar cultural background, but cost more than the offshore providers. On the other hand offshore providers operate in time zones which are distant from yours, have completely different cultural background but cost less since the cost of living in those countries is lesser than in nearshore countries.

Skill-set & experience level

One of the most important criteria are the skill-set and experience level. You have to make sure that the outsourcing provider offers the required skill-set and experience level in those skills. Also bear in mind that not only tooling and technical skills are required but also a process ones. If you are an agile operating company, you have to find a partner which shares and implements the same process philosophy.

Reputation & References

Checking the reputation and the success rates of former projects by examining references is also a part of the due diligence when selecting an outsourcing provider.

Price

If you have a very limited project budget, then you will definitely consider the costs of each outsourcing provider candidates. Nevertheless we advise you not to overweight this criteria since at the and of the day you want the best possible quality for the given budget of your project.

Executive summary:

Choosing the optimal outsourcing provider that should become your project partner requires some due diligence. Several important questions need to be answered before making a decision:

  • Do you need just slightly to expand your team, or you need a large amount of extra workforce and komplete new know-how?
  • Do you have a good experience in managing complex teams?
  • Which criteria (price, cultural compatibility, skill-set or reputation) is most important to you?
  • Have you done the due diligence on potential candidates?

If you have any further questions, or simply need help by the analysis to make your decision, please contact us. We offer you a free consulting.