How can you avoid IT outsourcing failures?

Written By
Rakhi Sethi
Blogger
Last updated at June 17, 2022
How can you avoid IT outsourcing failures?

By the end of 2027, the worldwide market value of IT services delegated to outsourcing vendors is expected to reach over $682.4 billion, according to a new report by Mordor Intelligence. In the next few years, outsourcing IT will increase (An annual growth rate of about 5% each year).

 

Companies no longer have the option to get away without looking outward for expertise, as a significant talent shortage trend has been going on in the tech world. This has pushed many companies to outsource IT work and hire dedicated developers from various sources, despite various factors such as how competitive such positions are, how much it will cost them or what training it requires.

 

In this article, we’ll go over the most common outsourcing problems and how to avoid them.

 

Let’s begin!

 

Why does IT outsourcing fail?

 

As companies incorporate more technologies into their workplace, it becomes harder for them to get the whole spectrum of software solutions developed internally. That's why companies try to build an effective strategy of hiring a dedicated team of developers by outsourcing.

 

This means you have to design and implement this system and reap its performance benefits. For example, the most common reasons of outsourcing failures are:

 

  • Communication failure between business and IT vendors.
  • The trust deficit between businesses and vendors
  • Failure to optimize and make improvements



Now, let's examine some of the potential IT outsourcing failures your company should be aware of to ensure success.

 

What are the common outsourcing failures companies suffer?

 

Many businesses choose to outsource, but it's essential to know the common pitfalls first. As we go through these, you'll also see evidence proving how outsourcing has failed in other cases.

 

1. Not paying attention to users’ requirements

 

Product development needs to come from a user's point of view, focusing on their needs and wants. Otherwise, you risk losing your investment and keep on sacrificing.

 

How to avoid it?

 

You can avoid this failure by considering the basics of being customer-centric from the beginning, implementing them across the project's planning process, and documenting how to do so in written documentation.

 

This way, you can improve the quality and performance of your IT product and ensure that your product is delivering exactly what you expect it to. This is important because it affects customer decisions more than most people think.



2. Communication failure

 

The next step is planning your communication channels. Suppose you want to use the phone to talk with providers, set up the call, and discuss the call ahead of time. One of the advantages of open communication is that it provides an increased sense of accountability by offering transparency. Many IT services, such as bug finding, localization, and more, can be more expensive with a lack of communication.

 

To succeed with outsourcing work, you first must establish clear processes and milestones. Without adapting to these new developments as they happen, you won't get the best results in the long term.

 

How to avoid it?

 

Setting up the channels for communicating with your outsourced company, setting up regular QA sessions, and assigning someone to manage the project is essential for successful cooperation. The project leader needs to be the bridge between your company and the outsourcing team. They need to be able to resolve any issues that arise between you and the vendor.



3. No vision

 

One of the most popular IT outsourcing failures to avoid is the lack of clarity when planning the project and its actual development.

 

The outsourcing team will focus on the documentation when creating the product. If you do not provide clear instructions on what to expect, you may get a product that isn’t very good.

 

How to avoid it?

 

Project delays and cost overruns with your IT outsourcing team can be avoided by clearly specifying everything about the project. This will help you avoid errors and clear up any confusion with a detailed breakdown of what you need from them.

 

4. Insufficient planning

 

An important factor to consider when outsourcing work is proper planning. If you don't plan for enough time, the project may not get off the ground. A lack of clarity may not be a showstopper for one job but a widespread problem. Poor planning can affect the work.

 

How to avoid it?

 

Taking into account the performance of your IT outsourcing team at each stage of the product development is one of the key things to succeed. When working on designing your project plan, one important thing to keep in mind is to make sure that you're outlining the timelines and objectives for the build, who will have input, and how the progress will be evaluated. Especially details that are specific to your project, such as tools you'll need, milestones or approaches you want to consider.

 

5. Low-quality development team

 

Before starting, it’s essential to find out more about the skills and expertise of your offshore development team. If you neglect this, it will waste your time & resources. Not only that but it will be challenging to re-employ recruiters again because they're already working on other candidates.

 

How to avoid it?

 

It's imperative to check the references and instructions your contractors will be working with before you contract them. You’ll also want to consider researching and reviewing vendors with the necessary experience before making a decision. Finding a good team for your project can be difficult, so investing time in research will lead to better results in the long term.



How to find the best talent for your project?

 

  • I think it's best to prioritize building a minimum viable product first; that way, you will be able to estimate the project value better.

 

  • Compare the prices and services that various providers offer.

 

  • This is the perfect place to provide an in-depth analysis of your product's benefits, how people benefit from them and how it might be used.

 

  • When working on a project, a key consideration is ensuring that processes and planning are clearly laid out.

 

  • Have a realistic deadline in mind

 

  • Plan a reliable way to communicate with developers that enables you to build scalable and custom solutions.

 

  • Focus on the product value over price. This will make it more likely to have a successful final product.




Conclusion

 

You can see that analyzing the past outsourcing failures is key for any company to succeed in this industry. It's essential to work with a development team that has experience in your specific product, knows the project scope, and is willing to provide their time & expertise.

 

We understand that every company is different and strives for its greatness. At Noetic, we look for opportunities to help you stand out from the crowd.

 

Are you interested in finding the best team to work on your next project? Our experts can show you how outsourcing with IT can help you grow your business and make the most of new technology right from day one.





Do you like our Articles?

Noetic-logo
Copyright © 2022 Noetic IT Service Pvt.Ltd