15 steps to choose the best offshore outsourcing company in 2019 (and 2020)

15 steps to choose the best offshore outsourcing company in 2019 (and 2020)
N-iX
2019-05-23T17:02:11+00:00

Let’s begin with a question that pops up in the head of any business owner or a CTO who decides to outsource software development. Why is it so hard to choose an offshore outsourcing company? There are thousands of IT vendors across the globe. Most of them have rich portfolios, great custom...

15 steps to choose the best offshore outsourcing company in 2019 (and 2020)
By Nadia Serheichuk May 23, 2019

Let’s begin with a question that pops up in the head of any business owner or a CTO who decides to outsource software development. Why is it so hard to choose an offshore outsourcing company?

There are thousands of IT vendors across the globe. Most of them have rich portfolios, great customer reviews, and extensive experience in software development. Therefore, choosing an IT partner is never easy. To ease your journey, we’ve created this step-by-step guide on choosing the right offshore IT company.

Step 1: Clarify your outsourcing goals

First and foremost, you need to understand your business goals and how outsourcing can help you reach them. If you have enough expertise and resources to complete the project in-house, you might not need to outsource at all. However, the demand for skilled software engineers is growing, and the markets change rapidly. So very few businesses can do without offshore software development nowadays.

Depending on your case, and what you would like to achieve, your search for the best offshore outsourcing company might take you into different directions.

  1. Extend a development team. If you are unable to scale up locally, need to cut the development costs, or get some specific expertise, then a dedicated development team is what you need.
  2. Develop a product from scratch. If you know exactly what needs to be done but have no team to do it, then hiring outsourced developers is the right choice;
  3. Deliver a solution. If you are facing a business problem, then finding a partner who can both offer a solution and deliver it is an answer.

Step 2: Establish clear criteria for vendor selection

Vendor selection is always based on certain criteria. One can hardly find an IT outsourcing company that will perfectly match all of them. Therefore, before rushing into the research and selection, you should clearly understand what aspects are critical for your case. Do you need to save money? Are you lacking technical knowledge? Do you need to scale up the development process? We compiled a list of the most common factors that influence an outsourcing choice.

  • Price. Cost-efficiency is one of the primary reasons for outsourcing, so choose an offshore development company within your budget.
  • Tech expertise. If you are looking to extend your capabilities and need developers with specific experience and skills, this should be among the selection criteria.
  • Relevant experience. While choosing an offshore outsourcing company, look for examples of similar cooperation in the vendor’s portfolio, particularly focusing on the tech stack, the size of the client’s entity, and duration of the project.
  • Location. How long would it take you to get to the vendor? Are there convenient flight connections with their location? Choose a destination within a convenient time zone and easy to get to.
  • Communication. Pay attention to how the company communicates, how much time it takes them to reply to your requests, how engaged they are. Also, good English is a must for effective cooperation with an offshore outsourcing company. Another important aspect that influences communication is the cultural fit, so consider it as well.
  • Company size. One cannot expect a company of 15-20 people to successfully deliver enterprise-level solutions. Also, the vendor should have enough capabilities in case you need to scale up rapidly.

These criteria might differ depending on business needs, so you can add those that are relevant in your situation.

Step 3: Choose the location

If you need help choosing the location for building an offshore development team, here are several resources you can use:

Each destination has its benefits and pitfalls, however, some of them have already established themselves as reliable partners. For example, Ukraine was named an “Offshoring Destination of the Year” by the Global Sourcing Association (GSA) in 2017.  Euro-integration and significant improvements in the business climate ( 20 positions in three years) make more and more companies choose Ukraine for IT outsourcing.

Step 4: Google the best vendors in the chosen location

The most logical next step would be to google ’it outsourcing companies’ or ’best offshore IT companies’. It will help you find websites, listings, and other available resources for the initial lineup.

You can also add your domain or service required for better results, like ’best fintech outsourcing companies or ’ software development outsourcing companies ’.

Once you have already chosen the outsourcing destination, search for the IT companies in that country and its main tech hubs.

Here, you can find the list of the Ukrainian IT companies in Kyiv and Lviv.

Step 5: Check out vendor directories

There are dedicated websites, such as Clutch, GoodFirms , Featured Customers, and others, that allow anyone to research the companies that provide IT services from all over the world. Why is this step necessary?

First of all, you can search directories by key services the companies provide. If you are interested in custom software development, you can find a list of companies that provide specific services. Also, you can filter such lists by industry focus, location, size of projects, etc.

Moreover, respectful directories like Clutch go to great lengths to check and verify the vendor’s reliability. The company provides contact information of their clients and Clutch contacts them for feedback.  Therefore, everything you read is verified and can be trusted.

Step 6: Check out the providers’ portfolios

In order to understand whether the company has the necessary experience and expertise, spend some time on their website. Look for the list of their clients, solutions developed for them, case studies, etc. This will help you learn more about the technologies with company specializes in, business domains they serve, and the types of companies they typically work with. Search for the solutions that either match your industry or the tech stack you need.

For example, we present our expertise, as well as case studies and industries, so that any visitor can easily find such information

Step 7: Pay attention to memberships, awards, and certificates

An established offshore outsourcing company typically has certifications from major tech partners. For instance, a company working with .Net needs to be certified by Microsoft. This will ensure that the service provider knows what they are doing within the given tech stack.

Moreover, membership in various chambers, associations, and business communities is a good sign. For example, N-iX is a member of British-Ukrainian Chamber of Commerce, as well as American, Canadian, and Norwegian. Also, pay attention to industry awards and ratings, such as Global Outsourcing 100 that recognizes the best outsourcing companies.

Step 8: Browse companies websites, news, and corporate blogs

A great service provider always keeps their website running. Here are  a few things you should pay attention to when browsing a vendor’s website:

  • latest updates on their blog or in the news section;
  • the company’s offices and their locations;
  • their cooperation models and approaches to software development;
  • job postings and the careers section;
  • technologies, services, and expertise they have;
  • a company overview page with the key information about them;
  • a company portfolio.

Step 9: Go through reviews and references on Google, Facebook, and company website

You can always ask for customer recommendations during the engagement process, but you can check out customer reviews even before contacting the vendors. Browse recommendations on social media and Google. Also, check out client testimonials on the website. A lot of companies provide video testimonials as well, so you may see the real people describing the cooperation with this company.

Employee feedback is also important as the company’s brand image will affect its recruitment capabilities. If there are a lot of negative reviews about the vendor on social media, its attrition rate must be bad too. So don’t forget to go through employee reviews.

Step 10: Explore the companies’ social media

The company’s social media can give you an inside look into its life. Most companies use LinkedIn to present their accomplishments, expertise, and experience you are looking to learn more about the company’s day-to-day life, visit their Facebook, Instagram, and Twitter pages. Browse their posts, photos, and videos to learn more about them. Look for a vendor with a similar culture and business ethics.

Step 11: Contact the vendors

No experience or expertise can make up for the absence of proper communication and customer approach. If you see that vendor expresses little interest in your inquiry, doesn’t seem to be fully engaged, or replies weeks after the request was sent, it might be better to avoid a company like that. Also, vendors research you as a potential client, so including important details into your initial inquiry or e-mail can reduce the time needed to process your request. It also helps them understand whether they can help you with the services you need.

Step 12: Get fully involved during the engagement process

The next part of the process requires a lot of communication with a chosen vendor.

Make sure to discuss critical day-to-day details, such as what communication channels will be used, what delivery model will be provided and within which timeframes, etc. Ask as many questions as you need to reach the final decision.

Such discussions are best held in person so you might want to visit the chosen vendor. There are three areas that need to be covered before you reach the decision and sign the contract. We describe them in the next steps.

Step 13: Define the legal terms of cooperation

The first and foremost aspect of cooperation with an offshore outsourcing company is the legal base. This area includes liability, insurance, intellectual property ownership, timeframes of collaboration and other clauses that are crucial for the draft of a contract.

Depending on the cooperation model (dedicated development team, time and material, fixed price), the terms might change. The final version of the contract always differs from the first draft, depending on the further agreements. However, it is important to understand whether the cooperation is possible at all.

Step 14: Clarify organizational aspects and communication channels

Typically, an offshore outsourcing company provides you with a single type of cooperation, for example - outstaffing. Depending on your goals, you might need staff augmentation to handle some part of the work, the dedicated development team that with be partially autonomous, or a solution developed from scratch.

Identify the preferred communication channels, clarify the stakeholders and the knowledge holders. This will help everyone avoid miscommunication or loss of information.

Step 15: Arrange the recruitment process

There are several recruitment scenarios while working with an offshore outsourcing company. First, you trust the vendor to carry out all the screening and interviewing on your behalf. Second, you can interview all the candidates yourself, however, keep in mind that recruitment can take much more time in this case. In case you need a big team but don’t want to waste your time on all the interviews, you can hire a core team (from two to four people) that will continue the recruitment process.

Regardless of the scenario you choose, make sure to describe the team you need as thoroughly as possible and define selection criteria for each specialist.

Congratulations! You’ve reached your destination

Once the final decision is made, the last step is to sign the contract that is beneficial to both you and your vendor. Review the final draft of the contract, preferably with your legal team. If there are no objections, it is time to sign the contract. Typically, most of the contracts are signed digitally and do not require the presence of both parties during the process. Once you are all set, you can begin working with the offshore outsourcing company who will be committed to your project.

Once you seal the deal, the work can begin. You may want to visit the outsourcing destination or invite the team to your office for ramp up and knowledge sharing.

Recap

Outsourcing is a great way to expand your business or even change your organization with the help of technology. But you need to do it right. Plan your time, invest in preliminary research and shortlisting, and ask the right questions. Remember to:

  • Have a clear and specific goal. Why do you need outsourcing and what will be outsourced?
  • Establish clear criteria for choosing an IT vendor.
  • Choose an offshore outsourcing company with an excellent reputation and reviews.
  • Discuss all technical and procedural aspects of cooperation before signing the contract.

After all, approach the selection process with great attention and care, and you will find the best offshore outsourcing company that will help your business thrive.

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By Nadia Serheichuk May 23, 2019

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About N-iX

N-iX is an Eastern European provider of software development services with 900+ expert software engineers onboard that power innovative technology businesses. Since 2002 we have formed strategic partnerships with a variety of global industry leaders including OpenText, Novell, Lebara, Currencycloud and over 50 other medium and large-scale businesses. With delivery centers in Ukraine, Poland, Bulgaria, and Belarus, we deliver excellence in software engineering and deep expertise in a range of verticals including finance, healthcare, hospitality, telecom, energy and enterprise content management helping our clients to innovate and implement technology transformations.

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