Why to outsource:

Outsourcing a software development project to an expert team has grown as a successful practice in last one decade. Supporting factors for outsourcing a project are:

You can handle big customer accounts, even with low staff levels.
No much infrastructure cost is required. You may just need few laptops, a good internet connection, and a telephone to start your business.
Highly skilled developers are available at nominal prices.

What homework has to be done on your end:

Make sure that you are well clear about your project requirements. Sudden introduction of a new feature during the project progress will not be a problem though but, its really difficult to accept the fact that you signed the deal in $A but the project finally reached a cost of $(A+B). That leads to a conflict which is not good for either of the two parties.

10 pointers to be checked in an outsourcing partner:

  1. Check their portfolio, if they do have an experience in similar projects earlier. You may not find that on vendor’s website as such, but talking to them may help you understand the actual situation.
  2. Filter down a few vendors and send them your requirement. Do a skype call to find out, if they have really understood your requirements well.
  3. Ask for the price from the shortlisted vendors. You may find it ranging from $10 to $25. Do not follow “Lowest bidder is best”. Check who has covered all your requirements in proposal. Quality of proposal matters most. Choosing the vendors with better proposals will prevent you from bad surprise in future.
  4. Be very much sure that the vendor is not a freelancer. Prefer a well established company indeed. Companies have hierarchy levels where people bother about reputation and client satisfaction.
  5. Now ask for payment terms. There are three models in Indian outsourcing world. i) Fixed Price, ii) Dedicated and iii) Time and Material. If your project requirement is a small, then prefer Fixed Price model. If you have a big project like some sort of customized social networking website or bidding portal then opt to start with Time and Material Model and if you like the team then jump on Dedicated Model.
    • Fixed Model: Vendor may not allow you an access of code, until the project is complete, but the cost is fixed with fixed scope of work. So if you are not technical enough to manage a developer and are comfortable with the quoted price, then go ahead for Fixed Price Model.
    • T&M or Dedicated: Vendor will ask 100% upfront payment for the time, you will hire a developer from him, and will give an access of the code to you on daily basis. So if you understand code and can test its quality, then prefer any of these two models.
  6. Make sure you get in direct contact to the developer, while working with the company. That reduces communication gap and also if you come back with a repeat business to the same vendor in future, then working with same developer will ease the process for you. Time investment in first attempt will pay off during your 2nd project.
  7. In any of development models mentioned in point 5 above, ask for a published link of the application to keep testing the project yourself, so that you may not land with surprises after the project is complete and is delivered to you.
  8. Ask for UAT period, i.e User Acceptance Testing time. Normally vendors offer it to be 10% of the total project cost. This makes sense in Fixed Price Projects most of the times, though. You have all reasons to reach back to your vendor, if you find any issues in delivery, even after the development is over, during UAT time.
  9. Ask your vendor to keep sending you updates on project progress through emails or through some Project management tools on daily basis. You have full right to know the progress status everyday, because you are spending money 🙂
  10. Last but important… A good sense of humor is an advantage while dealing any business 🙂 . There are situations when tense negotiations can be handled with a quick joke or a positive attitude.
Posted in Business Outsourcing | Tagged , , , , , , , | 4 Comments

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