When selecting an offshore outsourcing provider there are many factors that must be taken into consideration to ensure projects are completed successfully.
Choosing a location
The location of your outsourcing provider is often key to the viability of a project. Does the destination country have;
- Sufficient infrastructure in place, such as reliable communications, electricity and a developed IT community
- Sufficient talent pool to meet the demands of the project should it increase in scale
- Geographic proximity: is the provider strategically located in a market where your company has set up or would like to set up operations (i.e., production, sales, etc.)
- Cost of living: does the destination country have a relatively low cost of living, ensuring lower wage costs?
China is a country that can provide all of the above. It's economy and IT industry are flourishing and generate an expanding pool of low-cost, hardworking IT professionals. The Chinese Government has taken steps to ensure that the local IT industry will continue to grow, by improving infrastructure, such as telecommunications, power and transport, as well as providing incentives to local IT companies. China is the production hub of the world providing economies of time and transport for those that develop software in China.
Legal Considerations
Engaging in offshoring activities involves working within the bounds of more than one legal system, each with their own set of laws and regulations. The laws of the destination country will affect the way in which a project is carried out. Some things to look out for include:
- Labor and Employment laws: in some countries strict employment laws provide employers too little flexibility to adjust workforce levels to keep pace with fluctuating demand for project engineers.
- Intellectual Property laws: your company should be familiar with both the laws relating to IP protection in the destination country as well as the policies of the service provider.
In outsourcing, as with any other endeavor, legal intricacies can be quite complex and it is all ways prudent to seek the advice of a professional to ensure that one is fully aware of the implications of engaging in offshoring.
Choosing a provider
Once the destination country has been chosen, selecting an appropriate provider is the next step. There are a number of factors that must be taken into account some of which are:
- Management experience: does the company and its staff have experience in providing the types of services you seek?
- Company maturity: does the company have the personnel, experience and stability to undertake the project?
- Personnel: does the company have experience levels, at all levels of the company and enough manpower to complete the project?
- Certifications: does the company hold a certification such as CMM (Capability Maturity Model) that gives you immediately recognizable assurances on quality/capabilities?
- A history of satisfied customers: does the company have a record of references and repeat customers?
- Domain knowledge: does the company have the requisite knowledge in the field your project requires?
- Company culture: does the company have good employee retention rates and a culture of protecting IP (intellectual property)?
- Language capabilities: will you be able to accurately convey project needs and easily correspond with the project managers?
- Is the organizational structure mature and flexible enough to adjust to changes such as an increase in the scale of a project?
Cultural Compatibility
The software development and management process requires a good deal of communication between the client and outsourcer in order to ensure a product that meets requirements. It is important that there be an understanding of the communication and cultural differences of each party to make sure that any confusion or miscommunication do not occur or are resolved as quickly as possible. Things to consider include:
- Language proficiency: does the outsourcer have personnel that can communicate with the client in a common language?
- Are there bi-cultural personnel available that understand the cultures of both the client and the outsourcer?
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