05 Questions
before choosing
an outsourcing company
Choosing the right outsourcing company can be a game-changer for your business, driving growth and innovation. However, it’s essential to make an informed decision. Here are 05 critical questions every CEO, CTO, COO, Director of Engineering, and VP of Engineering should consider before partnering with an outsourcing provider.
1. What are outsourcing company core competencies?
Why does it matter?
Ensuring your outsourcing partner has specialized expertise is crucial. If the outsourcing company possesses deep knowledge in your industry, they can better understand the challenges and opportunities you face. Furthermore, they can assist in addressing specific cases and capitalizing on opportunities to maximize benefits for your company. An ideal outsourcing provider is one who has extensive knowledge and experience in your sector.
How to assess?
- Review customer feedback: Reviewing feedback from customers is a vital way to understand an outsourcing company’s expertise and reputation. Customer reviews often provide insights into the level of satisfaction with the services provided. Therefore, it’s important to check whether these reviews offer detailed evaluations.
- Examine previous projects: You can request to see past projects completed by the outsourcing company, especially those within your industry. By reviewing these projects, you can gain a comprehensive understanding of the company’s capabilities and their knowledge of similar industry projects. Pay attention to the outcomes and how the company addressed any challenges that arose.
2. What engagement models do outsourcing companies offer?
Why does it matter?
Flexible engagement models because it ensures that your project is both cost-effective and efficient. Different projects require different collaboration models, and choosing the most suitable one can significantly impact the success and budget of your project. For a clearer understanding, consider the following example.
For example, company A is a fintech firm looking for an outsourcing company to develop a mobile app for their digital banking services. The app needs to include basic features such as account management, money transfers, bill payments, and customer support.
Company A’s application requirements:
- Deployment on both iOS and Android platforms.
- Integration with the existing backend system of the company.
- High-security measures and compliance with financial industry regulations.
- Provision of technical support post-deployment.
Given these requirements, company A should opt for the team augmentation (T&M) model. Because team augmentation allows for easy monitoring and control of project progress, and facilitates the combination of internal staff and outsourced personnel to maximize resources. However, this model also presents challenges such as the need for strong project management skills to coordinate work effectively.
You might be wondering why this model is recommended after reading the example. Don’t worry, if you don’t want to spend a lot of time researching, you can contact us – IMT Solutions. We will provide specific advice for your case and answer any questions you may have.
How to assess?
During the consulting outsourcing company process, discuss your project/case in detail. Notice if they offer you a variety of models to choose from. Which model should you select? Why should you choose that particular model? What are the costs and timelines associated with it? Listening to the answers to these questions will allow you to gauge their capability and enthusiasm in providing tailored advice or adjusting services according to your needs.
3. How does an outsourcing company ensure quality and reliability?
Why does it matter?
In any venture, finding reliable partners is crucial as they directly impact the success of a project. This is especially true when you are looking to expand, where a long-term partnership is necessary. Choosing the wrong outsourcing company can be detrimental, in complex situations, an unreliable partner may withdraw, leaving you to spend valuable time searching for another. The next partner might also find it challenging to follow through with the ongoing project.
How to assess?
- Project management methodologies: It’s essential to be aware of the project management methodologies used by a company. Methods such as Agile or Scrum often yield better and more reliable results, as they have been proven effective across numerous projects and are widely adopted.
+ Agile methodology: Agile is a flexible project management approach that divides a project into small stages called “sprints,” typically lasting 1 – 4 weeks. Agile enhances transparency, allows better project control, and facilitates quick responses to changes. This is particularly useful when there are frequent requirement changes from clients.
+ Scrum methodology: A subset of Agile, scrum encourages teams to work collaboratively, with regular checks and directional adjustments. This method enhances the project’s responsiveness and flexibility. Scrum typically utilizes short daily meetings to assess progress and make necessary plan adjustments.
- Certifications and compliance with industry standards: Verify whether the outsourcing company holds any relevant certifications or adheres to industry standards. Certifications like ISO, CMMI, etc., or other standards relevant to your industry are evidence of the company’s quality and reliability.
4. What is the outsourcing company track record?
Why does it matter?
A track record is a document used to briefly outline the experience and capabilities of an individual or organization. When a track record demonstrates a company’s ability to meet client needs and expand effectively, it often serves as the best predictor of future performance. Past performance is usually a reliable indicator of future results.
How to assess?
- Request references: Ask the company to provide a list of their previous clients whom you can contact. Some companies might not share this due to confidentiality reasons, but if they do, speak directly with these clients to gain a better understanding of their experiences working with the outsourcing company. Inquire about how the company manages projects, handles arising issues, and the overall client satisfaction with the final outcomes.
- Consider case studies: Request that the company provides detailed project case studies on similar projects they have completed. These studies should include information about project objectives, challenges faced, how the company addressed these challenges, and the outcomes achieved. Reviewing these can help you assess the company’s capability in managing and completing projects that have specific requirements and goals similar to yours.
5. What are the costs and ROI expectations?
Why does it matter?
Transparency in pricing and clarity about Return on Investment (ROI) metrics are essential for making informed financial decisions, especially when considering outsourcing company. Knowing the costs upfront and having a clear roadmap for measuring ROI can prevent financial pitfalls in the future. This approach ensures that your investments are made efficiently, stay within budget, and allow for the successful evaluation of the project’s ROI.
How to assess?
- Get detailed quotes: Request that your outsourcing company provides detailed quotes, breaking down the cost of each service item and any additional fees. A comprehensive quote should include the costs of basic services, software and tools, project management, maintenance and support, and incidental expenses. This detailed breakdown helps you accurately compare different providers and select one that fits your budget.
- ROI Metric: Is a metric used to evaluate the effectiveness of an investment. Your outsourcing company should offer a clear roadmap for measuring ROI, including setting Key Performance Indicators (KPIs) and providing regular reports to track the success of the project. KPIs might include performance, product quality, completion time, and cost savings. Request a clear pathway from the company for tracking and measuring ROI.
Choosing the right outsourcing company is crucial for the growth and development of your business. You can ensure a successful collaboration that propels your business forward by focusing on core competencies, partnership models, quality, reliability, achievements, and costs along with ROI metrics. If you are still deciding, contact us for better consultation on choosing an outsourcing provider.
