Steps to Successful IT Outsourcing

In today’s rapidly evolving business landscape, organizations are turning to IT outsourcing as a strategic solution to enhance operational efficiency and competitiveness. By entrusting specialized IT tasks to external service providers, businesses actively tap into a vast pool of expertise, gain access to cutting-edge technologies, and actively streamline their operations.

Slack, Alibaba, GitHub, and WhatsApp are foolproof examples of companies leveraging IT outsourcing to drive innovation and expansion. And if you’re a business owner thinking about outsourcing your IT team, here’s a comprehensive guide that can serve as your roadmap to successful IT outsourcing.

Assess Your IT Outsourcing Needs

The initial step to successful IT outsourcing is evaluating your existing IT capabilities. Here’s how you can do it:

Identify your pain points and skill gaps – Identify your IT operations’ pain points. Check if some specific tasks or projects consistently face challenges or experience delays. Pinpoint the areas where your in-house team may lack specialized skills or knowledge, whether on software development and coding, network setup and maintenance, database management, troubleshooting technical issues, or managing your IT infrastructures.
Evaluate your in-house team’s workload and resource allocation – Take a closer look at your current IT resources allocation. Assess whether your team has the capacity and expertise to handle all the required IT functions effectively. Are your in-house IT personnel overwhelmed with tasks or struggling to meet deadlines? Is there an increase in errors or bugs in the typical software development process? Is there an increase in customer complaints?
Analyze your team’s scalability and flexibility – There are different ways to assess your in-house team’s scalability and flexibility. You can:
- Evaluate your past project’s success and delivery rates to gauge your team’s ability to scale up or down.
- Determine if your IT team members possess diverse skill sets to handle different tasks and projects.
Evaluate cost efficiency and ROI – Start by analyzing the potential savings in labor costs, infrastructure expenses, and operational overheads compared to in-house development. Consider the long-term benefits, such as improved scalability, faster time-to-market, and access to specialized expertise.

Research and Select an Outsourcing Provider That Can Meet Your Needs

Finding a reputable and experienced outsourcing partner is crucial when embarking on your IT outsourcing journey. Your outsourcing partner is vital in building your offshore IT team, leveraging industry knowledge and expertise, navigating challenges seamlessly, and contributing to your overall growth. To assess your prospective outsourcing partner effectively, you can consider the following strategies:

Evaluate their industry expertise and track record – Several effective methods exist to assess your prospective IT outsourcing partner. Explore their website, examine their client portfolio, and seek case studies showcasing specialized experience in the IT industry. You can review how they handled similar clients’ needs, from due diligence to onboarding offshore teams. Look for industry recognition, awards, and a solid track record in the IT outsourcing sector. You can also request client references to obtain feedback on their experience, success stories, and overall satisfaction level.
Check if they can smoothly handle your workforce requirement – You can consider the following aspects:
- Recruitment process and staffing capabilities – Inquire about their recruitment process to determine how efficiently they identify and hire individuals with the necessary IT skills. Ask about the average time to employ suitable candidates and if they can meet your specific staffing needs.
- Technology infrastructure and capabilities – Gain insight into their technology infrastructure by discussing the tools, hardware, software, and communication systems they employ. This ensures seamless integration of their technology with your onshore team and facilitates efficient collaboration.
- Talent market expertise – Evaluate their knowledge of the IT-specific talent market. Assess their understanding of current trends, skill sets, and the availability of qualified professionals in those areas.
Evaluate financial viability and cost-effectiveness – When evaluating an IT outsourcing partner, assessing how their pricing models and cost structure align with industry standards is essential. Compare the costs of in-house operations versus offshore outsourcing to determine potential savings. Some offshore company websites may offer savings calculators to assist with this evaluation. Additionally, examine if their pricing is transparent and provides the flexibility to scale up or down based on your business needs.
Request for a proposal and conduct interviews – There’s no better way to know your prospective offshoring partner than to request a proposal and talk to them. Doing so lets you assess alignment with your business needs, understand their services, determine cultural fit, gauge reliability, and commitment, clarify concerns first-hand, evaluate other vital aspects, and make a well-informed decision.

Defining Clear Objectives and Requirements

Defining clear objectives and requirements for your IT outsourcing can be challenging. It requires clarity and alignment of your internal and outsourcing needs, desired outcomes, and priorities. Thankfully, your IT outsourcing partner can help you on this journey by:

Collaborating to establish project goals and milestones – Your IT outsourcing partner can guide you to determine your objectives and align with the team you want to build. They can help you project goals, establish milestones to set benchmarks, and monitor progress and success smoothly.
Documenting precise technical and functional requirements – They will also assist you in writing particular technical and operational requirements based on the established goals. They will gather detailed information about your IT outsourcing requirements and process to ensure it addresses all necessary aspects. It will serve as a system or reference to provide clarity and alignment.
Creating a detailed project plan with timelines and responsibilities – With their expertise in project management, your outsourcing partner can create a comprehensive project plan that outlines key activities, timelines, and responsibilities. This plan will provide a roadmap for your outsourcing journey, ensuring all stakeholders know their roles and deliverables. It also helps in setting clear expectations and maintaining project transparency.

Establishing Effective Communication and Collaboration

Proper communication allows the entire team to achieve requirement clarity, align project goals, resolve concerns immediately, have a seamless knowledge transfer, and build a cohesive team.

When you begin working with your IT outsourcing partner, they can help you in the following areas:

Establishing clear communication channels – Together with your offshoring partner, you can establish with your team effective modes and communication channels that will further facilitate effective collaboration. Let offshoring partner know your preferred communication tools from project management software, instant messaging applications, video conferencing, or document-sharing platforms for your team, and they will assist in setting up the infrastructure. Your offshoring partner should also be able to help you configure and integrate communication tools, compatibility, permission access, and defining communication protocols.
Assign a dedicated Points of Contact (POC) – Your offshoring partner can help you hire a highly skilled and experienced Project Manager who acts as a single escalation point between your onshore and offshore teams. The POC is responsible for relaying information, addressing queries, facilitating knowledge sharing and best practices, and more.
Assist in setting up regular meetings and updates – Your offshoring partner can help you create meetings and update infrastructure that is tailored to your business needs. The goal is to keep communication and collaboration within your team as efficient as possible. They ensure that all project updates are documented and discussed in the meetings, thus enabling you to have a real-time status of the project progress at any given time.
Agile project management systems – Your IT offshoring partner embraces agile project management systems such as Scrum or Kanban to promote interactive, incremental, and continuous improvement. They divide the project into sprints with defined deliverables and timeframe. They also implement backlog management, where they prioritize backlogs.

Ensuring Quality Assurance and Testing

When it comes to IT outsourcing partnerships, the focus is not just on technical tasks but also on finding the right people who can execute these tasks effectively. Here’s how an IT Outsourcing Partner can assist you:

Test Planning and Strategy: IT outsourcing partners have access to a pool of highly skilled professionals with expertise in various testing methodologies and strategies. They can leverage their knowledge and experience to identify the right individuals for test planning and strategy based on the specific requirements of the business.
Test Case Development: IT outsourcing partners have access to a wide network of skilled professionals in the field of software testing. They can tap into this network to source candidates who have expertise in test case development.
Test Execution and Defect Management: Outsourcing partners have well-defined recruitment and selection processes. They can efficiently identify and screen candidates based on their skills, experience, and qualifications. This saves businesses time and effort in the hiring process, ensuring that they find the best people for test execution and defect management.
Test Automation: IT outsourcing partners often have dedicated recruitment teams that specialize in sourcing and selecting the best talent for specific roles, including test automation. They understand the required skill sets and can conduct rigorous screening processes to identify qualified candidates.
Security Testing: IT outsourcing partners offer scalability, allowing businesses to quickly ramp up or down their security testing efforts based on project requirements. They can provide additional resources as needed, ensuring that businesses have the right people for their security testing needs.

Managing Risks and Expectations

Managing risks and expectations is crucial in IT offshoring to ensure project success, cost and time efficiency, quality assurance, relationship building, and customer satisfaction.

Through IT outsourcing, your outsourcing partner can help you:

Identify and assess risks – Their expertise and experience allow them to identify potential vulnerabilities and threats that may impact your business operations by analyzing your current IT infrastructure, systems, and processes. By utilizing their expertise, they can help you better understand your IT environment’s risks.
Build risk mitigation strategies – They can assist you in identifying and addressing any prospective IT infrastructure risks. To ensure business continuity in the event of possible disruptions, your outsourcing partner will ensure security measures are in place, develop backup and disaster recovery protocols, or develop contingency plans. Doing this can cut costs and expenses while keeping your IT environment safe, reliable, and dependable.
Set realistic expectations – Setting realistic expectations will allow your business to aim for a much achievable goal, resource allocations, and an effective planning method. They can give you the tools and resources to accomplish your objectives efficiently.

Transitioning and Knowledge Transfer

Transitioning and knowledge transfer is crucial for your IT offshore team. Here’s how your offshoring partner can help you to ensure a smooth transition.

Create a transition plan – Your offshore partner will collaborate strongly with you to create a thorough transition plan. It includes the main tasks, dates, roles and responsibilities, and milestones for the transition process.
Facilitate knowledge transfer – Your offshoring partner will help you in the knowledge transfer involving document reviews, interviews, workshops, surveys, and other means.
Team onboarding – Your outsourcing partner will integrate your offshore team into your company, ensuring they understand your business values, operations, procedures, and culture. They will conduct orientation sessions, provide education on the required tools and technologies, and help them grasp the project objectives.
Training Skills and Development – Your offshoring partner will set up training sessions to improve your offshore team’s abilities and skills. To align the expertise of the offshore team with your industry requirements, your partner will provide domain-specific training and professional training on specific software, tools, or methodologies. They will customize the training to address any unique requirements or challenges identified during the transition process.

Monitoring and Performance Evaluation

Your IT offshoring partner can provide valuable assistance in monitoring and performance evaluation of your IT offshore team. Here’s how they can help.

Establishing Key Performance Indicators (KPIs) – Your offshoring partner will work collaboratively with you to develop relevant Key Performance Indicators (KPIs) that align with the objectives of your offshore team and your business.
Regular Reporting and Data Analysis – Your outsourcing team will actively monitor the progress of the offshore team, collecting performance data and providing regular reports. They will diligently analyze the data to identify trends and areas for improvement, ensuring that information is delivered on a suitable schedule.
Metrics for Performance Evaluation – These metrics serve as valuable tools for evaluating the performance of both the onshore and offshore teams. They encompass various aspects, such as knowledge acquisition and retention, productivity metrics, quality measures, and adherence to Service Level Agreements (SLAs).

Performance Review Meetings – Your outsourcing partner can facilitate performance review meetings for both the onshore and offshore teams. These meetings serve as platforms for open dialogue, allowing for discussing issues and sharing suggestions to enhance overall performance.

These initiatives guarantee accurate performance evaluation and steady performance improvement for the offshore team.

Continuous Improvement and Optimization

Based on the performance evaluation outcomes, your offshoring partner can help you identify areas for improvement and implement necessary measures. They contribute to this process in the following ways:

Encourage feedback and suggestions – Your offshore partner actively fosters an improvement culture by regularly seeking feedback from offshore and onshore teams. They establish effective communication channels and promote a culture where team members can freely share their ideas and recommendations to enhance processes and operations.
Finding optimization areas – Your outsourcing partner conducts regular reviews and evaluations of your offshore team to identify areas for improving efficiency and optimization. They analyze performance metrics, assess workflows, collaborate with both teams to identify bottlenecks, and implement best practices to enhance quality and productivity.
Leveraging lessons learned – As you partner with them, your outsourcing provider actively records lessons learned throughout the engagement. They take the time to analyze previous experiences, successes, and challenges to gain insightful knowledge that can benefit your upcoming outsourcing initiatives. This valuable knowledge exchange serves to improve your potential outsourcing projects, refine strategies, and mitigate risks, ensuring smoother and more successful outcomes.

Your outsourcing partner ensures ongoing improvement to your operations by fostering feedback and suggestions, spotting optimization areas, and utilizing lessons learned. Thanks to this strategic approach, they can improve efficiency, deal with problems, and produce better results for your company.

Start Your IT Offshoring Journey with Satellite Office

Building an effective offshore strategy is way easier if you have a trusted offshoring outsourcing company. You don’t need to create it from scratch and spend months or years to finally implement it. With the right offshoring partner, you can always begin today.

Satellite Office has a proven track record of assisting businesses to leverage the benefits of outsourcing by building them a dedicated, highly skilled, and cost-efficient offshore team in the Philippines.

Our tailored offshore outsourcing solutions give businesses full control of their remote team’s productivity, output quality, and targets while we provide comprehensive support that makes managing offshore employees as simple as possible. Experience a full-service model, including premium facilities, HR, IT infrastructure, account management, and payroll support services, with no hidden fees.