How to Choose the Right Outsource Development Partner?
By Jaime Aronowitz, Managing Director at Proximiteam
Today, every company is a tech company, and demand for expertly trained IT professionals is stronger than ever. Two-thirds of this demand comes from non-tech industries like manufacturing, healthcare, and banking.
While this climate is a boon for people in the IT industry, finding, recruiting, and retaining top talent is more challenging than ever, especially for companies in North America’s biggest technology hubs like the Bay Area, Boston, Seattle, Toronto, and Vancouver.
One good way to augment your company’s IT department can be software development outsourcing providers. Outsourcing is no longer simply about cost savings. Rather, its benefits include an improved company focus, access to the world’s best talent, and better work/life balance for employees.
Software development providers are easy to find; the simplest Google search yields more results than are useful. However, finding a provider is not the same as finding the right provider for your company.
Finding that perfect-fit provider will be your main challenge, and trial and error is not a good way to go about it. Instead, before you click on that first Google result, you and your team need to define the criteria for success. Qualifications such as education, experience, and references are of course part of that.
However, there are other, often overlooked factors that are no less important, and can make a huge difference in your engagement success.
I define “team ability” as the ability to form highly cooperative and efficient team-working relationships. Successful outsourcing relationships are those that build cohesive and positive teams that combine skills and expertise focused on a common goal.
Criteria to focus on include:
· Communication Skills: Don’t get lost in translation! Partner relationships are built on more than a mere communication of requirements. They should be based on the ability to have open dialogues wherein each party is empowered to express their perspectives trusting they will be understood. If you are considering an outsourcing company from another region, ensure both parties are able to have clear conversations with no language barriers.
· Business Culture: Don’t settle for flashy appearances – a fresh coat of paint can hide a lot of rust on the chassis. Look under the hood for what really makes the company run. Look for practices such as hiring and retention, career paths, and average tenure. Don’t engage with a company that struggles to maintain a team of developers – after all, that accumulated knowledge and expertise is why you’re trying to form this partnership.
· Consistent Methodologies: Best practices and methodologies are the driving factors that differentiate excellent companies from their competition. Matured companies will have established, documented, and measurable processes that support the culture that has made them successful. Regardless of the project, the industry, or the technology used, these processes should be consistently applicable. When evaluating potential contractors, request documentation that can prove these processes exist.
Defining a formula for a successful partnership with your outsourcing contractor will be difficult. However, from the first interactions, responses, and approaches, you will be able to recognize if the contractor has a flexible and approachable attitude.
Naturally, profits and costs drive most aspects of business, and outsourced partnerships don’t escape that formula. However, outsourcing is no longer only about cost savings.
The most common question when evaluating an outsourcing contractor is the hourly rate. While this differentiates the cheap, average, and expensive companies, it isn’t a reliable indicator of value.
Instead of focusing on the hourly rate, companies should consider the Total Cost of Engagement (TCE). This value factors in costs that would otherwise be hidden, such as those driven by lowered communication, misunderstood requirements and quality expectations, and additional resources allocated to a project.
The goal of finding the TCE is to discover which contractor provides the most value. This includes but is not limited to direct costs.
Selecting and managing a productive and healthy partnership isn’t an easy task. If your company is feeling the effects of a tech talent shortage, know that there are innovative resourcing models that can help. We would love to hear about your experiences and offer any support or guidance your business may need.