What is project outsourcing?
Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity that otherwise is or could be carried out in-house. The term outsourcing, which came from the phrase outside resourcing, originated no later than 1981 and refers to all types of delegating tasks and transferring employees and assets from one firm to another.
When we talk about project outsourcing, what we mean is that a full project is undertaken by a team. Outsourcing is one of the most hands-off of the models. Businesses contract with a third party who takes over the project in its fullness – recruiting specialists, and providing the equipment needed. The emphasis here is on the result. Here you go, a short definition. But in what cases do we use the project outsourcing and are there any drawbacks?
Management
The main difference between staff augmentation and project outsourcing is in the management process. Staff augmentation gives a business the most control over the recruitment and management of a project, while outsourcing does just the opposite – it oversees the whole process. The outsourcing company is responsible for hiring staff, the management, and the delivery of the contracted service.
The main task of an outsourcing company as Expert Allies is to provide you with talents to handle parts of your project directly. The integration of business operations under different ownership, over which the client organization has little to no control, requires outsourcing relationship management. The organization hires employees. The chosen group oversees everything independently and sets up milestones so that you can track the development.
Instead of going through the hassle of managing a software development team, for example, a preferable way to deal with such a situation is signing a contract with a trusted agency to find a team to deliver the project.
Delegating responsibility
In outsourcing it is important for both companies to operate based on mutual trust so as to ensure a fruitful partnership. The better the vendor understands the characteristics of the work of the client company, the better the project would turn out.
Outsourcing agencies take responsibility for the final result and quality of the project. They are executing every detail as it is included in the client’s plan. In order to build mutual trust and working channels for communication you as a client should be precise in the planning before the operation takes off. It is true that this may slow down the start of the project, yet the preparation process is vital.
However, before taking such a step you should be certain that you are willing to trust a whole team that will (even legally speaking) not be officially part of the organistaion. Consequently, they may not understand your work practices and would often feel like outsiders. Also, they might not relate to the specific work structure and might be not suitable for the environment already established.
On the other end of this relationship are the specialists who may not be keen on the idea of feeling like they do not belong. The black box development often leaves a gap between the specification of a case and the work done.
Specialists availability
Once you are ready to trust the agency and to give up most of the control, the advantages of this manner of work are various. An example is that outsourcing whole pieces of work to foreign professionals makes a huge impact on human resources availability. Moreover, specialists from all over the world are already working in teams ready to take part in the projects of your company wherever they are needed in the process. Again, they come prepared – with the needed equipment and the required management, as well as, the knowledge and skills of all the talents included.
Flexible or not
Surveys show that sometimes companies have a problem with finding trusted outsourcing agencies. You ought to be careful with choosing a third party for such an important part of the structures of your company.
Nowadays it is a necessity to be flexible in our approaches to releasing a project. From our point of view, the biggest drawback of project outsourcing is not being able to make adjustments. Every detail is considered in advance and such spontaneous changes would create a lot of overwork to be implemented and thus, create unnecessary pressure on the team responsible.
A simple example – let’s imagine that a company wants to produce a specific model of a coffee cup. They have hired a team to accomplish the project but the result is not satisfying because the client is now reconsidering the material which the cup is made of. The production would start all over again.
With the staff augmentation approach the agile method is easily implemented. This happens thanks to the people who are part of the daily team ceremonies and are always informed about the status of the different tasks. Again – both outsourcing models have their pros and cons and could be profitable for your organisation after a good research.
Reasonably expensive
With everything mentioned up to here, you probably already understand the level of responsibility the vendor is willing to take. This is an important part of the reason why project outsourcing is more expensive.
As a third party, such companies reduce the management overhead for you and let you stay focused on the results – the final product or service. Furthermore, the teams create milestones for you to follow the progress of the tasks, handle the issues and not bother you with the small details – everything is already discussed.
Whenever you need an Expert in outsourcing, call your Allies – Expert Allies.