Dependency on IT staff augmentation: How to control it?

Introduction

In the current competitive business environment, outsourcing has become a strategic tool with which companies can seek efficiency, cost cutting, and acquiring specialized expertise. On the other side, outsourcing, when dealing with critical tasks, is all about managing the inherent risks of dependency that might have an effect on the success of projects and business continuity. The article will expand on the strategies and tools necessary for successful risk management in outsourcing to ensure it strengthens rather than undermines your business operations.

Before we jump into the main technical discussion let us briefly understand statistics that circle around over dependency in software development outsourcing.

Key Statistics to learn in Software Development Outsourcing

1. Outsourcing Market Size: According to Statista, the global outsourcing market was valued at approximately $92.5 billion in 2019.

2. Security Concerns in Outsourcing: A survey by Deloitte revealed that 68% of businesses list data security as a critical concern when outsourcing.

3. Communication Challenges: According to a study by the Harvard Business Review, communication breakdown is the number one problem faced by remote teams, affecting around 33% of teams.

4. Dependency Risks: Research from Gartner indicates that by 2023, more than 50% of government IT operations roles will be deeply involved in business value operations, due to the shift in responsibilities onto outsourced providers.

5 Risks of Over-dependency

Outsourcing vital functions involves several risks that may be critical to the success of projects and business continuity. These include:

Loss of Control

Outsourcing would definitely mean reduced direct control of the vital business functions and their processes of decision-making. The end result, therefore, may not be what was expected or originally envisioned by the organization.

Information Compromise

Outsourcing organizations' sensitive information to third-party contractors increases the potential risk of experiencing intellectual property theft and data breaches two problems that ensue in case the security measures of the outsourcing partner are weak or their personnel are not properly trained in information security procedures.

Project Management Challenges

Organizational culture, different time zones, and other operational styles bring about miscommunication and delays or inefficiency during project execution.

Quality Variability

The quality of work output may vary with less binding control over the quality of work delivered, thus impacting the overall quality of project deliverables.

Dependency

The risk is that the business becomes too dependent upon the outsourcing provider. If the relationship ends or the vendor has operational problems, this can prove a problem.

Now, let us understand the strategies to overcome this dependency

Strategies to Avoid Dependency: An in-depth overview

This involves taking a strategic approach toward using outsourcing to mitigate the associated risks through the better use of contracts, increased communication, stronger oversight, and integrating technology.

Well-Defined Contracts and SLAs

Tools: Employ ServiceNow for dynamic SLA management and Freshservice for effective vendor performance tracking.

Key Elements of SLAs

Detailed contracts and SLAs are of the opinion to be critical in the estimation of explicit expectations and framing a structural system for responsibility. The key attribute of the said structure is the holding of high standards and allowing an easy way of determining various levels of performance.

Smooth communication strategies

Tools: Slack for instant messaging, Zoom for video conference calls, and Microsoft Teams for integrated communication and document sharing.

Strategies

• Regularly scheduled updates and strategic meetings should make sure there is alignment. 

• Collaborative tools keep the dialogue and continuous sharing of documents.

• Tools for scheduling across time zones will be established to help minimize this form of disruption.

Good communication approaches ensure all stakeholders are aligned, informed, and engaged throughout the lifecycle project, bridging both physical and cultural gaps.

Strong Oversight and Project Management

Tools: The task management would be through Asana, visually tracking the progress of the projects could be through Trello, and the more complex management of software projects would be done with Jira.

Strategies

• The primary approach would be the establishment of internal teams or liaisons who would be the overseer of outsourced projects, keep in close contact with the vendor, and be the point of contact.

• Performance review and audit would be done periodically, and review meetings conducted on how to better adhere to the agreed standards as a way of assuring compliance.

• Real-time dashboards and reporting tools would be used to keep track of project progress and quickly see problems and resolve them.

• Outsourced projects will be properly managed in terms of timelines, cost, and quality, and proper governance with a clear view of engagement.

Technology Integration

Tools: Google Drive and Dropbox Business for file sharing; it will be ensured that all the technologies are compatible and interoperable.

Strategies

• Common management platforms for real-time task tracking

• All systems used will be interoperable systems; this will encourage smooth data flow, as well as communication.

• Access protocols encrypt shared information to secure access.

• This means that the integration of relevant technologies ensures that project management is effective and safe and that the work is done according to agreed-upon standards and is delivered on time.

Relationship Management

Strategies

• Adopt a partnership approach that builds mutual respect and agreement on the common goals to be achieved.

• Conduct regular strategic alignment sessions to realign the goals and methods of engagement.

• Open lines of communication with transparency to foster trust and ensure that both parties are at ease with the arrangement.

Before moving ahead, understand the brief of all project management tools and communication tools for improving project dependency

The table below is a comparison of the many tools previously mentioned, majoring in some of their principal functionalities and how they tend to serve different aspects of outsourcing management:.

Want to learn more tools for a smoother software development outsourcing process, then read about 15 Project Management tools and 10 Communication tools in our previous blogs.

Key Considerations for Effective Outsourcing

• Cultural Fit: The closer two companies' corporate cultures are, the less friction there will be between them and the easier the working relationship is.

• Scalability and Flexibility: Check if the outsourcing partner can increase or decrease the services delivered to adjust to changing requirements without causing an operational disruption.

• Regulatory Compliance: Ensure the outsourcing partner follows industry-related regulations and standards in the industries it serves, so that no legal risks are taken, and an ethical act is upheld.

Successful Outsourcing Relationship Characteristics

• Transparency and Open Communication: Make use of tools that enable transparent workflows and open communication.

• Ability to Change: Outsourcing partners should adjust to the changes that may occur in the business environment or pattern of project.

• Proactive Innovation: Vendors should be promoted to introduce non-routine creative solutions or enhancements for better efficiencies, project deliverables or outcome.

Future of Outsourcing

• Increased Automation and AI Adoption: More and more companies would go towards automation and AI to perform routine activities under the outsourcing contracts to reduce dependence and add efficiencies.

• Geographic Proximity through Nearshoring: Companies would prefer to pick outsourcing partners closer in relative terms to their geographical location to avoid cultural and logistical barriers.

• Concentrate on Intense Security: The outsourcing contracts of the future will most likely have much potent security given the rise in the trend of the occurrence of cyber threats off late.

Moving ahead, let us understand how Acquaint Softtech helps with streamlining the process of software development?

How Acquaint Softtech helps with streamlining the process of software development?

Software development outsourcing and IT staff augmentation are the two services provided by Acquaint Softtech, an IT outsourcing company. As an official Laravel partner, we enjoy creating new applications using the Laravel framework.

Acquaint Softtech is the best choice if your business is looking to hire remote developers. With our accelerated onboarding process, developers can join your current team in as little as 48 hours.

Because of our $15 hourly rate, we are also the best choice for any type of outsourced software development task. We can help you to hire remote developers, hire MEAN stack developers, hire MERN stack developers, and outsourced development services to meet your need for specialized development.

Conclusion

It would not be the selection of the right partners that much but the strategic management of the relationship in order to minimize risks and maximize benefits in controlling dependency in outsourcing of critical tasks.

Understanding possible pitfalls, implementing management strategies, and using the right tools would help perfect outsourcing in business operations. This holistic approach ensures that outsourcing remains strategic, an asset to give positive growth to the business while ensuring operational excellence to improve profitability in the convoluted global market.

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