March 2, 2011

Benefits of Outsourcing

Contrary to popular wisdom, offshore outsourcing can and should be successful. When things are running smoothly, outsourcing delivers many benefits. We’re listing some of them here.

Allow you to take advantage of talent you could not otherwise find yourself. Your outsourcer may be able to deliver specific experience you need and can’t find within your own organization and also bring the best developers from around the world to work on your project.

Build your teams faster, possibly with instant-on capability. Working with a competent outsourcer allows you to assemble a team quickly, drawing on the outsourcer’s internal team and expertise to find the right resources to get the job done.

Faster time to market. Bringing a team on board expeditiously and working with skilled resources enables you to get to the finish line faster than you could do it yourself. The outsourcer’s internal process capability and management skill also brings time to market benefits when comparing internal vs. partnered development.

Lower cost. One of the main reasons businesses outsource is to lower cost. Cost is not the only factor for success in outsourcing, but it is a driving force for why business start looking at an outsourced relationship. Look at your true cost carefully. The initial difference between internal and external cost may not be as large when comparing final costs, but effective outsourcing relationships should conserve precious capital.

Flexible team size over time. Outsourcing allows you to change the size of a team according to need without going through the hiring and layoff cycles that traumatizes your own organization. Working with a good outsourcing partner should provide you with increase resource flexibility over what you can achieve internally.

Improve your internal development processes. Working with a good outsourcer should help you discover new methods for improving your internal processes and getting your work done. Improvements can come directly or indirectly by observing how the outsourcer works.

Enable your team to establish multiple kinds of beneficial partner-style relationships. Once your team is set up to outsource effectively, you should be able to leverage that skill to other outsourcing engagements and increase the chances of success with future outsourced projects.

Focus your own team on what you really do best. Outsourcing some of the tasks or task components that you may not be most effective at completing allows your team to focus on what it does best, enabling you to differentiate your business and compete most effectively.

Enable innovation by allowing you to try ideas more quickly and efficiently. Working with a quality partner who can improve process and work quickly and cost effectively can enable innovation by allowing you to try and discard bad ideas and discover and focus on the good ones.