Today’s escalating, competitive, and demanding IT environment has forced business players in the marketplace to think innovatively and stay ahead of the competition.
When adding consumer value to the product or service, you have to ensure quality and better service and this has become an essential requirement in the international marketplace.
IT outsourcing is the best and attractive option to take advantage of global opportunities. This significantly helps in increasing customer service while enabling businesses to focus on core competencies.
In this particular post, we will be giving a deeper understanding of the Informational Technology Outsourcing’s role in the competitive marketplace.
Why Outsourcing is Important Today?
To implement IT outsourcing services, an understanding of all the stages and implications of outsourcing is important.
From a startup or budding business perspective, it is one thing to understand the basics of outsourcing and completely another to utilize it as a competitive advantage.
Successful implementation requires careful planning, approach, and understanding of the impact across business departments.
If you utilize the services of an outsourcing company as a competitive strategy for your business, it will turn out to be an everlasting advantage. You should understand how your company, in particular, will be benefitted and how to get started by devising your strategy.
Let’s begin with a disclaimer: Outsourcing offers a long-term competitive advantage.
As partnering with IT outsourcing companies brings cost-cutting, enhanced product development while maintaining high-quality standards, it can help every company whether big or small in the long run.
Now, when you start thinking of it from a startup’s perspective, it is a completely different ball game.
Therefore, business outsourcing works to get ahead of the game. Plus, it offers faster product iterations, quicker time-to-market cycles while extending your business lifeline. This further helps in getting to the next milestone.
How Outsourced IT Services Competitive Strategy Look Like?
For a deeper understanding of the competitive strategies, you should consider them as tools to get a product-to-market faster, enhance customer satisfaction while shortening the product roadmap, or have more customers via marketing.
Let’s have an insight into how it works from a development standpoint:
Outsourcing development is the most common outsourcing strategy businesses take advantage of today. Especially when hiring a new IT team and then retaining it is so affordable.
The new approach involves branching out a significant chunk of your development, say a mobile app or website creation, etc.
And then outsourcing it to an overseas country that is tech hubs like India, Philippines, and Ukraine.
Best practices of Outsourcing Solution Strategies:
Completely outsourcing your technical team:
This is possible only when you hire offshore developers. In this way, all your product roadmap can be easily built, deployed, and managed by the outsourcing development team.
You will own the vision but the outsourcing agency will be owing execution.
Having an in-house CTO, Project Manager and outsourcing the project:
This strategy helps in giving more control over how the project is being created, executed, and managed.
It is very important to have an “inside professional” who understands the thought process.
It further helps in leading the software outsourcing team towards the right direction as per environment.
When startups or other companies have limited budgets but they still need to get to the market, you can save a lot of time, money, and effort by employing a strategy like this.
It is a fact that a developer in the US costs approximately $95,000 annually whereas it costs $35,000 remotely.
So, you can take help of software programmers thereby speeding up the development!
Summarizing the aforementioned, it affects your company in the following way:
- Finance: Reduces the development cost
- Project: Reduces your product roadmap timeline
When it comes to software outsourcing, you should be aware of the fact that there is no one-size-fits-all strategy that you can simply choose and employ.
Everything depends on what your company does and the current stage it is in.
The best advice is-the the earlier the startup, the better it is to outsource to get to MVP or product-market fit. Conversely, you should keep consolidating the tech decision-makers in-house.
How Do I Get Started with an Outsourcing Strategy?
The below-mentioned will help you jump start with finding out if you can outsource some of your company’s functionalities.
- Find the core competencies of your organization
What core functions will move the needle revenue-wise or product-wise?
- Define roadmap & milestone
In what direction will outsource take you, how will the goal be reached, and by when?
- Note outsourcing activities that produce faster, better or higher quality results
What are the best activities to outsource in order to achieve milestones, or reach their faster or at a lower cost? Make sure you note down the list of responsibilities and job functions.
- Set expectations
Under what conditions will you be willing to invest in offshore developers or offshore development teams?
- Take the help of professionals
You have the list with you. So, get out there to find your desired professional!
Following are the steps to be followed:
Step 1: Define Your Goals
- Make a long-term plan especially when you are looking forward to cost reduction. This helps in getting access to other resources. Find a reliable and experienced knowledge process outsourcing provider.
- Outsource non-core and labour intensive functions.
Step 2: Choose Optimal Management Policy
- You can take advantage of outsourcing while making sure your in-house staff feel secure and try to rest any kind of rumors. Make sure the management policy is transparent, aiming on the employees’ rights.
- Another outsourcing benefit is, you get extra cost savings by means of flexibility reduction.
Step 3: Define the Functions to Outsource
Avoid failures of outsourcing functions that are of the little dependence on people and know-how transfer.
- It is advised that in the beginning, outsource the processes that are of less importance.
- For prompt short-term cost savings, non-core functions should be outsourced.
Step 4: Outsourcing Provider Selection
- Outsourcing work that is customer-driven results in long-term cost savings. It is important that you choose an experienced, customer-driven outsourcing provider that offers quality services.
- Choose an outsourcing firm that has sufficient resources, more flexibility, scalability, and lower service rates.
- For long-term outsourcing projects, pay attention to the features being implemented in the process. Compare information concerning economic stability and IT resource availability in different countries across the globe.
Step 5: Ensure Your Company is Ready for Changes
- Inform your in-house staff about both long-term and short-term goals of the outsourcing process.
- Don’t believe in any outsourcing rumors and make everything as clear as possible.
- Try reducing the cultural gap between your in-house employees and the technology outsourcing team so as to establish a good job climate.
Step 6: Upgrade Your Operation
- When giving the offshore outsourced team with network access, it is important to know if the security policy is updated.
- You should know that there is uninterruptible communication between offshore teams and your onshore employees.
Step 7: Take Your Time
- Never adopt IT outsourcing only because others are following that pattern. Also, don’t go for complex activities. Start low, go slow.
Step 8. Maximize the Opportunity
- Choose the best offshore engagement model in order to attract more suitable rates from an offshore provider.
- It is advisable that in the beginning outsource only those functions in which your provider has a competitive advantage.
How Does an Outsourcing Development Team Will Help You?
Focuses on Marketing Research and Planning
A mandatory quality every organization should consider is to have a deep understanding of customers’ real needs.
You should know in-depth about these requirements that your long term strategies become not just adaptive but also anticipatory of what audience you are targeting.
Taking the help of an outsourcing provider helps you instinctively learn what makes companies ‘tick and click’ with regards to your brand.
In other words, you should know your audience enough so that you can accurately anticipate what they want and why.
Know Your Customers Better than You
Understanding your customers is a continuous process. This is something companies should start living and breathing on a daily basis.
Besides cost, there are many reasons for outsourcing. One of which is the top outsourcing companies move beyond the regular surveys.
Creating quality marketing research is something that the outsourcing firm does differently so as to understand the customer.
In outsourcing product development, companies dig deeper and look for ways for the best utilization of tools and resources.
Furthermore, it helps in creating an integrated customer profile that is constantly added to and made to evolve. Some of them are:
- Daily online and even offline habits
- Information about your buyers professional, personal and family lives
- Interests, passions, and hobbies
- Customer’s social media and online browsing preferences
- Awareness of advertising and different marketing platforms
- The dynamics of your customers (regarding the purchase, shopping, and desire related habits)
The aforementioned are a few of the obvious examples and the more you investigate, the better you’ll be able to make strategic predictions about what your consumers will respond to.
Avoid Reactiveness at Any Costs
When you are 100%reactive, you keep playing a game of catch-up, Well, when you’re constantly trying to catch up, you’ll have no time to create any kind of long term strategic plan.
This is a fact that it makes you fall behind your competitors while disappointing your existing customers eventually.
While you’re busy reeling from surprises in the marketplace, it is a possibility that your competitors are going to move ahead of you. Especially if they are implementing the strategic planning process.
Your outsourcing partner makes sure that strategic planning concepts are covered in much greater detail.
Whenever there is in-depth research by offshore IT outsourcing, it helps in emotionally triggering the audience way more effectively than your competition.
The Bottom Line
Outsourcing is a fruitful strategy but it requires strategic planning and careful execution to bring it to life.
It also comes with the overwhelming benefits associated with this strategic move. This is one of the reasons why IT Outsourcing has become popular.
Many new startups and established companies are coming up with plans to have their work outsourced to various offshore locations.
And most companies chalk out their overall business strategy around the functioning of external resources and offshore service providers.
Some experts have also come to the conclusion that outsourcing is beyond cost-effectiveness, and has become a successful business model in itself.
Whether you are a small or big firm, you have to understand that there is no one-size fit strategy.
This takes some real company introspection to find out what is the most effective way to implement outsourcing in your organization. Use this as a baseline and adapt according to your size, industry, and company age.