IT Project outsourcing has been a trend for many companies today. Not only it saves substantial amount of dollars, staffing overheads and effort but also provides an opportunity to connect with and gain knowledge. Technology has removed every barrier that was a bottleneck few years back for companies having globally dispersed teams. But, till today there are few masses who believe in the anti-outsourcing theory. According to their opinion, outsourcing should be avoided by countries to upkeep national interest and economy and also because outsourcing sometimes does not yield good results. So our point today is: Is IT Project Outsourcing a real gamble? Let us find out.
As a business owner, what would you like to achieve at the financial year end? It is obvious that most business owners would look for Productivity and Profitability which eventually leads to company’s Growth. In order to achieve these 2P’s (productivity & profitability), every decision maker will definitely think upon the overall cost, the impact the sourcing model has on the business and the ability to control. But, before that every decision maker should know what and how to outsource. So, let us discuss these three points in detail before I conclude.
Overall Cost: Cost is an eminent factor that comes into the minds of decision maker’s before they decide upon a projects future. Whether a particular project will be executed in-house or outsourced to some other offshore providers? Or whether partial outsourcing will be done instead of total project outsourcing? Answers to these questions will decide the overall cost to business. For example, you have an IT project to be executed and for that you hire 5 dedicated developers at monthly pay scale. How will you absorb them when the current project gets over and you do not have projects for them in pipeline? Will you pay them for just sitting idle at work? So, why pay them unnecessarily when you have the flexibility to turn resources on and off by outsourcing the project to a third party at a lower cost. You can also avail the services of specific technology experts and hard to find talents at better cost than in-house hiring. But, every time it is not about the cost. Many a time’s business owners are ready to pay huge dollars but look for better control over their project execution.
Ability to Control: Control over a particular project is required when outsourcing is concerned. Every business owner these days care about the degree of control that they will get from their development partners when they outsource their work. It is acceptable that the highest degree of control on a project would be by developing in-house but, when cost incurred is high owners tend to drift towards outsourcing the project to service partners who can provide them fair degree of control over their project.
Impact on Business: The above two factors decide the overall business impact the project holds. Considering the fact that, developing a project in-house has a better degree of control, it will definitely have a better business impact. But, the cost incurred increases by a greater extent, minimizing the profit margin. Hence, with a fairer degree of control and low cost, outsourcing definitely has a medium-high impact on businesses which is enough to achieve both the P’s (productivity and profitability).
So, as a business owner I would prefer to outsource IT projects rather than developing them in-house. But, always remember to research and consider several other factors before choosing your right development partner to avoid offshore outsourcing IT project failure. Hence, we can be fearless and say that Outsourcing is not a gamble.
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Cheers
Surya
Everything @ Mindfire Solutions 