Outsource or not?

Ad notam: Outsourcing is a practice used by companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally.

Today outsourcing is very attractive for companies all over the world due to many advantages it gives. But outsourcing a part of your projects can also involve risk. It is very important for administrative staff to identify and assess risks and find ways to lessen them. In this article we examine factors that are subject to examination before taking the decision about outsourcing.

First of all, outsourcing is associated with cost reducing. Cost savings are more appreciable when a part of a project is outsourced to lower labor cost regions. Taking into account reduced cost that will come from outsourcing a part of work, do not forget about concomitant expenses such as vendor selection costs, transfer costs, legal costs and others.

Thus, administrative staff of a company should clearly evaluate outsourcing vendor suggestions and be assured in their ability to provide positive Return On Investment (ROI).

Before making a decision to outsource a part of activity, a company should perform analytical work of its needs, aims and strategy.

One of the most important factors that should be taken into account when making decision about outsourcing is special knowledge. If a project requires some special skills or technical knowledge that employees do not have and it is not reasonable to hire a new employee even part-time, or it is not profitable to retrain employees, it is advisable to outsource a part of a project to an outsourcing vendor.

As well it is advisable to outsource a part of a company’s work if skilled employees are required only for one particular project, and after the work is performed an employee will be dismissed. In this situation not only money will be saved but also time spent for searching for a new skilled employee.

If a company works in high risk spheres, risk can be reduced by outsourcing a part of work to a vendor company that works in the same sphere and has good experience and practice. It will be more effective, safely and reliable to involve qualified specialists or experts in the sphere with required technical background and skills to participate in the project that is outsourced. Such actions allow allotting responsibility not only to a vendor company, but also to the company itself, and reduce risk associated to probability of improper execution of a project by the outsourcing vendor company.

Every project requires efficient, smoothly running and accurate management. Transmission of minor tasks to outsourcing company will allow management team to concentrate on core projects and tasks of paramount importance, and consequently, reduce time spent on it.

The advantages of outsourcing a part of a project are the following:

• Reduced development costs;
• Concentration on major tasks;
• Accessing the newest technologies and new development;
• Accessing modern data bases;
• Increasing the effectiveness of a company’s work;
• Coping with lack of special knowledge;
• etc.

Putting all advantages and disadvantages together it could be said that making a decision for or against a company should clearly determine its objectives and rank the priority of assigned tasks. Outsourcing can not resolve all company’s tasks. And all of them require thorough examination. Management team should be well organized, responsible and effectively working in order to make to a process of outsourcing a part of work really worthwhile and satisfactory.

So does outsourcing worth it or there is no point even in trying? The answer depends on your business, your tasks, strategy and aims. Spadework and careful analysis will also influence the choice.

We hope that this article has enough information to make the decision clear. We hope it will be helpful. If you still have some doubts and need more information, you are welcome to contact our sales@alt-soft.com or support@alt-soft.com

Altsoft develop professional custom solutions using its excellent experience, powerful code libraries as well as development, management and outstanding problem solving skills. ASP .NET outsourcing is among the areas of Altsoft’s specialization. The professional C#/C++/C, Java and Microsoft .NET and ASP .NET developers and analysts with strong mathematical background are ready to outsource your software products or parts of them.

Altsoft team will set up a comfortable .NET outsourcing environment to meet your needs. We ensure a timely response when developing a .NET outsourcing project and hope to make you feel satisfied and happy with the service.

Altsoft outsources custom .NET applications for Banking systems, GIS, Healthcare, Marketing, Advertisement and other industries.