If you intend to outsource a part of your IT tasks to offshore vendor, bear in mind several important factors.

1. First, make sure that your offshore strategy is comprehensive

and addresses not only vendor performance but your onshore team as well, you exactly understand the advantages that offshore approach has over the alternatives, and you have a realistic expectation of the results of your offshore project. Client’s team performance contributes a very significant value to the success of a whole project, and this need to be carefully planned in advance. Our practice shows that realistic value of your cost savings when using offshore approach is between 30-40%, if your offshore projects are well planned and executed. More then that, we recommend that you establish a quantitative performance targets for your offshore strategy. Such performance metrics should be used throughout the projects to track performance of your offshore engagement.

You can contact us at this stage to get a free advice on offshore engagement planning.

2. Second, carefully select the vendor

The leading offshore vendor will not only suggest you an offshore  resource to solve your issue, but will bring the industry domain expertise and innovate to find a comprehensive solution for your organization, based on its expertise starting from business process optimization through project management to creation and delivery of a technical solution. Also, prior to sending an RFI or RFP to the list of vendors or launching an open bid, define the exact criteria to evaluate the vendors. Highly developed project delivery and customer engagement methodology is another indicator of a mature vendor.

At Belsoft-Borlas group, we are used to deliver large and complex projects in various industries that often include business and management consulting in the subject business area. Methodologies that we adhere to confirm to the industry standards, guaranteeing successful delivery of the projects. Nevertheless, in general we recommend you to start with a small to medium size pilot project to develop every detail of a client-vendor collaboration framework and verify vendor’s ability to perform.

3.  Third, thoroughly plan and conduct a pilot project with the selected vendor(s)

Innovation is a key for success of both client and vendor. From our side, we encourage clients to break throug inefficient work models with the implementation of proven and successful cutting-edge technologies and business processes re-engineering.

Before starting a project, make sure to build and document a complete framework of your relationship with a vendor, including project plan, roles, responsibilities, communication and control policies, and finally exact measures to track project performance. In BORLAS, we rely on 14 years of our experience delivering large and complex multimillion projects that would never succeed without careful planning and tight collaboration with the client team. What we see from our experience, is that the vast majority of the success of a project or a long-term relationship with a client depends on the preparation phase and common understanding of the entire process between a client team and a project team from our side.

We recommend you to implement vendor rewarding payment models for your offshore projects. Such models should correlate with the performance measures you defined earlier to control the engagement of a vendor. This would encourage a vendor to bring its best expertise and knowledge of the business and technology to achieve the best results, develop a new expertise, and get a higher reward in the end.

We also recommend you comprehensive additional readings on the topic, such as a report “Offshore 2005 Research. Preliminary Findings and Conclusions” by Ventoro.