Business process outsourcing solutions – this has remained a much debated and discussed term with people speaking for and against it. All these discussions have kept the concept of outsourcing very much alive, and in the present day scenario that makes remote work more feasible, we are witnessing a healthy growth for this business segment. An important thing to consider is that when outsourcing, it is the manpower or people rather than the technology that should be the deciding factor. Undoubtedly, technology matters in today’s world. However, to fully optimize the available technology, you need experts behind it. Therefore, organizations on the path of growth must understand the interdependency between people and technology and ensure that both are taken into consideration when embarking on any outsourcing project. The outsourcing model you choose – outstaffing vs. Project-based outsourcing is also important.
Alexander Pirinsky, in an enlightening article in Forbes.com shares some key takeaways from the conversations he had on different outsourcing approaches at an outsourcing event held in May 2017 in London, and what to think about if you are planning to outsource a project.
According to him, the following are some of the concepts one should consider before outsourcing.
- Cost vs. Skill: Instant availability and hourly rates are not a good sign always. Lower rates and immediate availability shows that the vendor is ready to work on anything you place before them. But the crucial element is expertise. For efficient results, it is better to stick to two experienced senior level project developers rather than three middle level or 4 junior level developers. Though the rates for seniors may be higher, they can employ their expertise and use more progressive approaches than lower level developers. As a result, projects are completed faster with minimal expenses and this helps companies to reduce the future costs for scaling, maintenance and support.
- Project based Outsourcing or Outstaffing (outsourcing to individuals): Your expenses are moderate when you choose to outsource to an individual. However, there must be somebody on the owner’s side who can assess the professional qualities of the candidates beforehand. That means you have to be tech-savvy enough to choose the right person with the right expertise for the specific project. Moreover, you will have to maintain personal communication with each and every team member, and also change the team members on the basis of the skill sets required. An outsourcing company takes a different approach and the company finds the right people with the right expertise. Aspects such as team management, contractual and accounting paperwork, and project transparency are all taken care of by them. The project owner has access to the personal expertise of each team member as well as the knowledge base of the outsourcing company.
- Individual or broad expertise: An outstaffing company hires individuals who work on an hourly rate for a commission. Though more expensive, a project-based outsourcing company may be preferable because it focuses more on project release, scaling and maintenance.
Outstaffing companies can provide individuals to suit specific needs for various projects. On the other hand, an outsourcing consultant with broad expertise has excellent internal procedures to accumulate expertise in the company knowledge base, not in separate staff members. The older the company, the more projects it has completed and it is less important whether the company has completed the exactly same type of project that the client wants. This is because the outsourcing consultant has most probably already implemented the necessary functionality in many other projects and can offer reliable professional advice. In addition, their broad expertise shortens the production cycle because only less startup-associated research is required.
Project owners considering partnering with business process outsourcing services can save on development costs with either of the two outsourcing models – outstaffing or project-based outsourcing. However, the important consideration here is regarding what the project owner prioritizes – speeding up the project with broad expertise or saving costs at all means.