Do it right & Offshore Outsourcing can be powerful tool for achieving competitive advantage. Do it wrong & it can easily turn out to be a forgettable investment. To ensure success, outsourcing must be a strategic decision. Few points that can make your Software Development Outsourcing or BPO initiative a boon to your existing setup are listed below:
1. Planning initiatives: Form a multi functional team to study & implement the outsourcing options. The team should be able to access the impact of Outsourcing a function to an external party on different functional areas of business.
2. Explore strategic implications: Determine how software development outsourcing fits in with the company's long term strategies. Outsourcing can be very powerful. To harness its power, however includes asking fundamental questions regarding outsourcing's relevance to the organization’s:
-Vision of its future
-Current & Future Structures
-Current & future core competencies
-Current & future costs
-Current & future performance
By exploring the answers to these queries, the project team is able to estimate better how Business Process Outsourcing can fit within the organization's strategies
3. Selecting Providers: The project team must list the criteria for a qualified service provider. When potential service providers are identified, investigation should be made to determine their qualifications & confirm their interest in the transaction. Considering all these factors, one or multiple providers can be selected.
4. Finalizing Terms: The parties must negotiate and finalize all terms & culminate the discussions in the form of a written agreement. Discussions can be aimed at arriving at a mutually acceptable:
-IP and data security framework
-Management, Reporting, Deadlines and Control policy
-Pricing and payment structure
This term sheet leads to the detailed negotiation which enables the lawyers to draft a contract document. This brings a great assistance in successful outsourcing.
5. Managing Relationships: Success of outsourcing largely depends upon how both the parties while developing a new relationship will monitor performance evaluate the results & resolve problems. If the relationship is handled in a proactive manner, it will defiantly lead to better reward for both the parties involved. A healthy association can lead to repeat business and lasting relationship in between the two parties.
