Software development outsourcing is today popular more than ever, and companies that provide such services are considered as good employers.
“It’s no longer the big beating the small, but the fast beating the slow.”, explained Eric Pearson, CIO of the InterContinental Hotel Group, when it comes to the situation in the IT sector.
Outsourcing your development team is no longer a cost saving strategy, but a necessity for some businesses. This is the time when companies need to be responsive, to act to the fast digital transformations occurring daily.
Did you know that 69% of US employers have difficulties finding the right people for their job roles? IT is the leader in this, so called, talent scarcity.
This is when outsourcing can really be the solution, that can not only reduce costs, but enable a business to have a talented, experienced workforce on board.
And the other way around.
On the other hand, if you are “the talent” seeking an opportunity to work for an international company, without moving abroad, a software outsourcing company can be an ideal employer.
Hm, still not sure what outsourcing actually is? Check our guide where you can find all needed details: Software Development Outsourcing: From A to Z.
To leverage all the benefits of outsourcing, we’ve prepared some useful information and tips from our (…extensive) experience that can come in handy, no matter if you are searching for a vendor, or an employer.
Factors to pay attention to when choosing an outsourcing vendor
If you want the TL;DR, here it is:
- (Relevant) Experience
- (Relevant) Tech Stack and Knowhow
- Availability & Method of Communication
- Pricing Model & Fees
- Company Culture
- Financial Stability
- Project & Data Management
- Onboarding Process
- Risk Management
1. (Relevant) Experience
If we need to pick just one thing out of this list, that would certainly be the vendor’s previous experience. When it comes to outsourcing, experience is a necessity.
Yes – everybody was a beginner once, and that doesn’t mean that a beginner can’t do a good job.
However, when it comes to outsourcing, you should look not only to reduce development costs. An outsourcing vendor can offer so much more. A experienced professional should be able to help you, to advise you on matters that you don’t even expect
For example, OSM is now over a decade in the industry, but we were a startup once. That’s why we know to recognize the typical startup issues that our clients are facing, and suggest a solution. Even if it is not related to software development.
2. (Relevant) Tech Stack and Knowhow
You might already know which technologies you’ll use for your project, or you need help figuring out. Whatever the case is, you should make sure that your outsourcing vendor is well informed about what technology can be used for what functionality, and that they have enough experience using it.
Sure, everybody can do some headhunting, but you should double check that the vendor already has the needed talents in its pool.
That’s why we, at OSM, made our tech stack visible to anyone who visits our website and they can immediately see if our team is potentially a good fit.
3. Availability & Communication Strategy
It is essential to have clear communication with your outsourcing vendor. Transparent feedback and smooth communication are essential. Here are some questions to think about before signing a contract with an outsourcing agency:
- How will the communication look before, during, and after the project?
- How much insight (and control) will you have into current activities?
- Which communication channels will be used?
- What timezone and working hours are considered as relevant for having communication on a regular basis?
- Will you have a dedicated person to whom you can reach out no matter the subject?
- WIll you schedule recurring meetings?
…and so on.
4. Pricing Model & Fees
If you are not familiar with the outsourcing pricing models, this is the time to jump to our article Software Development Outsourcing: From A to Z, where we covered the pros and cons of each model.
To sum up, here’s a comparison between the most popular outsourcing collaboration models:
Depending on the project needs you can choose the pricing model…but make sure that the vendor supports it. The vendor itself should be able to suggest the best solution, based on your needs (…and that’s why we said previously that it’s good to have previous experience).
As for the fees, it goes without saying that you should choose a vendor whose fees fit your budget.
5. Company Culture
A collaboration between two companies can easily be compared to a relationship. To have a good one, you should share the same values and be able to understand each other easily.
Collaborations where these aspects are fulfilled are more likely to be successful than those with cross-cultural differences. Some, on the first sight small differences, might create a huge friction and misunderstandings. Of course, it’s possible to merge these two (company) cultures together, but we strongly advise you not to risk it.
Make sure you check a company’s About us page, it can tell you many things that will get you prepared for the initial meeting.
6. Financial Stability
Hiring a vendor with financial issues carries many risks. One of them is that the company can ease operations before finishing your project. The second one is that the team members who work on your project will leave the company due to financial reasons.
Fluctuation in the IT industry is already huge, so you don’t want to work with risky companies.
The challenge here is to recognize the real financial stability of a company. Here’s what you can do:
- Get insights of the vendor’s insurance policy to make sure that it’s sufficient to handle any unexpected issues.
- Do your homework and make a background check of the company’s credit history (if available).
- Ask for the vendor’s growth plan. It can tell a lot about the situation in which the company currently is.
7. Project & Data Management
When choosing an outsourcing partner keep in mind how important it is to keep your data safe. Nowadays, data security and privacy are two of the biggest concerns among users, no matter the business.
That’s why you must ensure that all of their data, and other sensitive information are safe, that the vendor is reliable to prevent any data leaks.
On the other hand, there is project management itself. You should not only look for a vendor that has competent project managers, but one that you can trust with your project ideas, “secrets”, learnings, ideas. Of course, an NDA can keep you safe when it comes to some information, but anyone can “steal” your business idea. And you certainly don’t want that, right?
Get well informed how your project, and all details regarding it, will be managed.
8. Onboarding Process
When hiring an outsourcing company you’ll need to establish a collaboration and that means that the whole process should be as smooth as possible. A good outsourcing vendor will know how to onboard you, or your team, so you feel welcomed, to understand the whole process.
It is more likely that you’ll be able to recognize the vendor’s quality if the onboarding process goes smoothly,
9. Risk Management
Just imagine how frustrating it was for companies that hired external vendors when the Covid-19 pandemic striked? Okay, situations like this don’t happen that often, but still, you need to be sure that your outsourced vendor knows how to handle difficult situations.
The holiday season can be considered one of them, as well! It is challenging to make sure that deliverables are on time when you don’t have all team members on board.
For example, OSM has an ongoing, non-stop recruitment process regardless of the active project needs. That is how we maintain our talent pools and keep the OSM pack alive.
Factors to pay attention to when applying for a job at an outsourcing company
Outsourcing companies are very popular among IT talents since they enable them to work for international projects, from their own country (or even home office), to use the latest technology and to keep pace with the international IT trends.
However, there are some important things to consider when choosing an outsourcing company as a potential employer. Here are some:
- Projects & Technologies
- Team & Management
- Company Culture
- Financial Stability
- Projects Management
- Employer Reputation
1. Projects & Technologies
Salary is surely one of the most important factors you need to consider when applying for a job. However, we are sure that you know how fast things are changing in the IT industry, and how important it is to keep up with all the trends. That’s why you want an employer that will enable you to learn, to work with the latest technologies and on challenging projects.
We, at OSM, are passionate about having clients that we can grow with, and we are motivated when we are a part of their success. Just imagine how proud was our team that worked on Kasparovchess project when they saw all of these newspaper headlines 🙂 :
2. Team & Management
We don’t need to stress out how important it is to have a good, healthy atmosphere at work, no matter if you are working from the offices or remotely. A toxic environment and micromanagement certainly isn’t something you would be happy with.
Okay, but how to make sure that you’ll be happy with your colleagues and superiors?
Luckily, there are a couple of platforms where you can find IT company reviews (Glassdoor, Joberty, etc.). Make sure you’ve read all the comments, or don’t be lazy to reach out to the people who left relevant comments and ask them all needed questions.
We, at OSM, try to be transparent as much as possible, and we gladly listen to all of the suggestions, comments and critics that our (ex)employees write about us.
3. Company Culture
This goes hand in hand with the previous factor we’ve mentioned. The company culture can tell you a lot about the company’s top management, the atmosphere in the offices, etc.
Well, you certainly don’t want to work for an outsourcing company that has financial problems. No doubts about that.
The problem is, that you can just make assumptions about the current situation. If you don’t have relevant insights do a background check of the other employees (via Linkedin) and the company’s clients. If they seem as someone who wouldn’t work with a financial unstable company then you (probably) don’t have anything to worry about,
Besides, there are stats available about companies that suffered financially during the Covid-19 pandemic. That can also be a good sign if a company has its “savings”.
Of course, these are only guesses, but at least good for starters.
5. Projects Management
Don’t mix this one with “project managers”. Of course, a person who leads the project management process certainly plays a great role here, but there are other factors to consider.
For example, if you like agile project management, then make sure you check if the outsourcing company is also a fan of it.
Do you need to track time?
How many tasks does an individual handle?
Would you have a mentor, or will you mentor another person?
How many team members can you expect on each project?
These are some of the questions important to figure out before you decide to work in the chosen outsourcing company.
Here are some insights about how we work at OSM: Can a Small Team Really Cope With a Global Project?
We handpick our OSM perks to help our employees grow. That is our mantra when choosing the benefits for our employees. We, at OSM, believe in work-life balance and we act as a pack, so we seek for team members who share the same values.
We advise you the same. Think about what benefits would be really important to you. Is it private health insurance? More days off? Perhaps a game-room?
It all depends on your preferences, and there’s no need to try to fit in a company that actually isn’t a good fit for you.
Oh, don’t be shy to ask for a custom benefit – most employers love honest feedback and suggestions!
7. Employer Reputation
Well, this is something that perhaps sums up all of the above mentioned factors. And it is really important to know how the chosen outsourcing company is known as an employer.
How long can you expect to stay in the company?
Is overtime work often?
Can you get a promotion and a salary raise during the first year?
How about the main legal issues – is everything as you expected?
These are some questions to think about. All in all, you should do a good research on this matter…cause employer branding is not enough. You need to hear real experiences before you make the final decision.
We’ll just leave some photos here, since we think that they can say a lot about the way OSM works: both as a vendor and as an employer :).