Enterprises are in a constant search to improve their bottom line. One strategy that has proven benefits and is becoming a staple in the IT and CE business sector is outsourcing. Access to additional software and technical personnel assists corporations and small businesses alike to grow their business.
TECHNETIQ’s online marketplace helps businesses outsource almost any type of project. Hundreds of Service Buyers have successfully outsourced projects as diverse as administrative support, cabling, wireless technicians, server administration, graphic design, web design and development, copy writing and even software development.
Our client input has allowed us to compile a “BEST 10” list of successful outsourcing techniques.
1. Clearly define the scope and schedule for your project
Any successful outsourced project always starts with a clear statement of what you are hoping to accomplish. Define your project requirements up front. Service Providers need accurate, complete information to present you with realistic proposals and to quote you a reasonable price. Be specific about the deliverables you expect the vendor provide.
Be clear and realistic about your schedule requirements. Project schedules can have a huge impact on project costs. Put penalties in place if you are concerned about meeting your client’s needs. Be careful with this one as you understand how you would feel accepting such a requirement. Use our PM module to record and follow your communications and timelines.
2. Evaluate a service provider the way you would hire a full-time employee
When you’re evaluating proposals from Service Providers, don’t be afraid to ask questions. Just like hiring a full-time employee, selecting a vendor is a very subjective experience. Check their references and ask for feedback from other clients who have used their services.
Engage in a dialog – if you have any concerns about a vendor’s specific capabilities, voice your concerns.
Think of your posting not as a “single time event” but as a strategic alliance to be grown. This will put your team in the correct mind frame to develop your project successfully.
3. Look experience that is relevant and specific to your requirement
Ideally, the Service Provider you select will have specific experience with the type of project that you’re undertaking. You don’t want to be somebody’s “test subject”. This is especially crucial when outsourcing complex technical projects such as software development. For example, if you’re looking for someone to develop an application for the Palm PDA, make sure they’ve actually completed commercial projects on that platform for other satisfied customers.
This advice holds true for other types of projects as well. If you need a business plan for opening a retail store, you’ll get best results if the consultant you hire has verifiable experience in the retail sector.
4. Don’t choose a vendor based solely on price
Though it might be tempting, never select a vendor based solely on price. Experienced buyers who have outsourced many projects and evaluated hundreds of proposals almost always recommend discarding the highest-priced and lowest-priced bid. Buyers report that their most successful projects are the ones where they felt the vendor offered a balance of good value and quality results.
5. Review portfolios and samples
Examine the vendor’s previous work (their “portfolio”) and make sure that their previous work meets your expectations for quality and style. If you’ve evaluated a vendor’s portfolio, references and previous experience and are still unsure of their capabilities, consider asking them to do a quick mock-up or provide a basic outline of a work plan. A Service Provider who really wants to win your business might be able to give you a rough concept so you can better understand their approach to solving your problem.
Never cross the line between asking for a mock-up and insisting that a vendor provide you with finished work “on spec.” This only disproves the trust expected between Buyer and Provider. No qualified professional expects to work for free.
6. Start with a control project
When engaging with a service provider for the first time, start with a project that is relatively small and simple in scope. This will give you a better idea of the provider’s style and capabilities before you entrust a “mission critical” project to them.
7. Payments should be defined to project milestones
Just as you should be clear about project scope, make sure that you define a work plan for your outsourced project with clearly defined milestones. Having scheduled checkpoints where you review the status of the project as it works toward completion—is an easy way to ensure that you meet your final deadline and that the final product meets your standards.
Create targets be completed and link these to the payment schedule. A good guideline for IT and software development projects is to pay no more than 20% to 30% of the total project price up front (from monies held in our escrow account), with the rest of the payments awarded based on the completion of 3 or 4 milestones.
8. Negotiate ownership of work up front
For any type of outsourced project, make sure that you are clear about who owns the resulting work product and any important components of that product. Make sure the service provider understands how you intend to use the deliverables that they are agreeing to provide. For example, the development of a custom software application for your personal use would be substantially different from the development an application that you intend to package and re-sell.
9. Don’t forget about support after the project is complete
For technology projects, it’s a good idea to specify a warranty or support clause so that you are assured of some amount of continuing support from the vendor after the project is complete. It’s much easier to negotiate a support clause before the service provider begins work, rather than after the completion of the project. Even creative or business services can benefit from a support clause.
10. Always have it in writing
During the course of a service engagement, the scope of the project, deliverables or even the agreed upon price may change. Make sure that you clearly communicate any schedule, scope or payment changes to your service provider and get confirmation from them - in writing - that they understand and agree to the changes. Similarly, keep a record of any agreement changes requested by the service provider and whether you accept or reject those modifications. Save copies of any email exchanges that you have.
You can access top-notch expertise any time you need it without the overhead of hiring full-time staff. By staying focused on your core competencies and hiring expert freelancers for your other needs, you can compete with the delivery capabilities of larger organizations while maintaining your independence.
In the event you have a verbal agreement or any verbal exchange truly should be followed up with an email stating “….. our understanding of the conversation is …..” This will assist in clarity throughout the process.
11. (Just because we like to exceed expectations, even in a Top 10 list) Diarize the experience
Always create a log of the interactions and events between yourself, your team and the Service Provider. This will assist you to comprehensively adjust your communication, expectations and costing for subsequent projects.
