How to choose your outsourcing partner in IT

hand choice personThis blog is not an attempt to give you a secret formula of how to pick an outsourcing company you’ll be working with. Rather it’s an attempt to point you in a direction of what you should focus on and seriously consider when making your selection.

The first question you should ask yourself when engaging in a selection process is what type of engagement will this be? Is this a one time short term project deal, or a team expansion that you hope will be as successful as your local team.

Unfortunately many people start with asking if the company has technical expertise in a given area. While this is an important aspect if you are trying to have someone build something for you quickly, it may be almost not applicable if you are building an ongoing team. At the same time many forget to ask about company’s culture, HR processes, and growth opportunities while this is important for later type of projects.

When you focus on technical expertise you are giving an opportunity for the company to answer the simplest question – can they do the job. The answer is yes. Either they already have people or will hire someone. In any case they will find capable technologists. On top of it you might be getting seriously excited after interviewing their senior architect while he will not be the one working on your project at all.

What truly differentiates companies is their ability to attract and retain talent. These are the areas you should focus on.

Unfortunately technical expertise are commodities but companies management processes and HR methodologies is what will make your project succeed of fail.

Consider asking the following questions when choosing a partner for your next outsourcing engagement:

  • How do you attract talent. How do you position your company to prospective employees and how do you plan to position this project
  • How do train your existing personnel. What do you do to grow your workers.
  • How do you retain employees
  • What is the growth path for your employees? Do people get promoted? Do you have a documented process and written expectations?

Focus on people and company’s process, not technical skills.

6 Responses to “How to choose your outsourcing partner in IT”

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  1. sachin katariya says:

    Hi Zhenya,

    I read couple of your blogs relating to outsourcing and you are spot-on in terms of presentation or value-add that “Outsourcing” brings to table.

    Here is link to some views on Selecting Right Outsourcing Partner, on my Quora page

    I look forward to reading more of your insightful blogs.


  2. Tim says:

    Hi Zhenya,

    Your message does a great job in asking us to look at long-term, sustainable value instead of falling into the trap of simply “kicking the tires”. Notwithstanding the positive affects of a “can do” attitude, “ask and we will deliver” does not replace a forecast of future success that is based on (past) demonstrated success.


  3. BCX says:

    Well written piece indeed. It is very important to do a thorough background check when choosing an outsourcing partner because there are claimers out there.

  4. paul says:

    You pointed right with “companies management processes and HR methodologies is what will make your project succeed of fail.”
    Even if it risk to be perceived as a marketed message, I would ask what is the “vision” of the company (if they have any)? Such vision can showcase if the company has a strategy for the future.
    Beside this, a close attention should be paid to the management team as they are the one that manage the processes and implement the methodologies.
    As for the technical people, the retention rate matters off course but also for how long the people are staying with the company.
    Not latest, do a shortlist and pay a visit before the final selection or even start with 2 on a pilot is possible.
    For an experienced service provider, type of questions addressed reveals the profile of the future client.

  5. Suman Kumar Luthra says:

    Attrition is an industry wide phenomenon. We have to learn to accept it and work around it. It does not matter whether the overall attrition is 10% or 20%. Infact its good as lateral movement at times weed out under performers and gives a chance to inject fresh blood (ideas) in any organization without allocating any budget to this goal.

    What matters is *Key*/*critical* team member attrition. Not all fingers are equal and we want that we always have the strongest ones and have them in good health. How you define key depends on the organization and its business model. Whether you value consistent performance or experience/seniority within the organization or overall experience or man-of-the-moment depends on the organization values, abilities and the surrounding talent pool ecosystem.

  6. Suman Kumar Luthra says:

    Every organization should have strategies for Talent attraction, Talent management and retention. Otherwise they would not be able to hold on to key people in long term. To attract talent you may have factors like the type of work you do (cutting edge, in specific area, etc), compensation and work culture. To manage talent you need to look into their skill development programs, career development, rewards and recognition to top performers like performance linked variable pay/bonuses and performance linked promotions. To retain talent, you need to consider long term incentives like shares and incentives which should be offered to *key*/*critical* talent and so on. Only then the organization may have long term sustenance. This would be the type of partner you would need. Atleast In India, MNC captives and Top-Tier Outsourcing companies are working on these and hopefully in worst case even if *some* key member attrition is there, a top-talent can be replaced by another top-talent.

    The war for the attracting and retaining top talent is same in outworking organizations or Product development companies. People are key enablers in software business. Knowledge workers matter.

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