For many companies developing digital products and solutions, outsourcing represents a powerful tool to solve key challenges. Some of these challenges include slow internal recruitment, lack of expertise, the need for better cost efficiency, not enough business visibility, and so on. We’ve created this article to share our understanding of the main criteria for decision makers when they consider a new collaboration with technology services providers.
Obviously, every organization’s IT outsourcing context and needs are different and unique to them. Some may be starting from scratch having never outsourced before, while others might be switching from one provider to another or looking to collaborate with multiple vendors at the same time to maximize their output. Whichever category you fall under, Pentalog has had several relevant business conversations in recent years that have uncovered the following key aspects which CTOs are considering when choosing new outsourcing partners:
- The quality of the engineers
- Pricing, flexibility and cost-effectiveness
- The ability to recruit fast and maintain a low turnover
- The software development methodology
- Certifications and relevant case studies
- Security and reliability
Let’s delve into these criteria in a little more detail.
Quality of the engineers
The relevant skills and overall quality of the engineers should be seen as the foundation for any software development project. Many CTOs note that previous poor experiences with outsourcers were due to the lack of relevant technical skills in the external team. Our advice is to look for partners who can provide pre-vetted top talent through their own resources. At Pentalog, we use a skills assessment algorithm which analyses more than 130,000 complete tests results, so you can match your needs to exactly the right resources.
Pricing, flexibility, and cost-effectiveness
Pricing is an important consideration for decision makers, so look for transparent pricing models, with no hidden fees or charges. And make sure any services company provides a clear understanding of the total cost of ownership to ensure you get the most value for your money.
Better cost-efficiency and increased flexibility can also be gained if the outsourcer has Delivery Centers in multiple time zones with different prices based on the local cost of living. To meet client demand for flexibility, at Pentalog we have extended our presence on 4 continents, giving them access to wider price ranges. Our rate-card is clearly based on skills, role, seniority and location, and our collaboration framework defines all the rules and the responsibilities up front.
The ability to recruit fast and maintain a low turnover
These two aspects are equally important. In areas where top quality engineers are in high demand, only companies with strong recruitment teams, using continuously improved processes across all recruitment phases, truly achieve efficiency. Brand awareness and dedicated events for employees and local technical communities are important tools. Implementing positive initiatives and giving opportunities for continuous learning and improvement encourages a low churn rate. As does showing the sense of each new mission and recognizing the need to adapt to meet evolving employee expectations. Glassdoor notes and eNPS score are objective facts that could be used for this assessment.
The software development methodology
Mature software companies, digital natives, those transitioning to digital, and product or services companies all adopted Agile methodologies many years ago. This adoption brought many key advantages and increased the overall success ratio of software development projects. When you analyze this criterion, you should go beyond the usage of the associated terminology for the related roles and ceremonies.
Companies who have deeply adopted Agile values will be focused on continuous learning and improvement, the ability to address changes quickly, clarity on the ownership and empowerment of the teams, efficient delivery, etc. These aspects are all true in Pentalog’s case and have enabled us to maximize the value we provide by working on more than 200 different projects every year. In addition, we have adopted a set of Maturity Models across multiple dimensions (Governance, Engineering, Staffing, Security etc). These provide clarity in terms of each project’s adoption of good practices and allow prioritizing of future improvements based on each unique business context.
Certifications and relevant case studies
Certifications clearly give strong proof of the company investing in increasing its overall maturity. While they trigger the adoption of state-of-the-art industry practices, the real long-term value is these journeys must continue once the certification is achieved. Relevant case studies also prove the service company’s ability to perform in comparable situations. A good practice at Pentalog, during early new business conversations, is to openly provide existing customer contacts who can directly share their experience of working with our teams.
Security and reliability
GDPR and cybersecurity are critical aspects for our industry and should be considered from the beginning of any outsourcing partnership. You can assess the maturity level of each company by checking a few key factors. Do they have a Chief Security Officer? Do their contractual templates cover these critical security aspects? Is security covered across all levels of their organization, from basic physical access rules to related employee training? And last, but surely not least, how is security considered in the software development process?
The efficient assessment of a future outsourcing provider is key to making informed decisions that align with business goals and maximizing the output of the collaboration. Whether you’re new to outsourcing, switching provider, or adding a new provider to your roster, always follow clear criteria when making your selection. Finding the right match at the start can save time, minimize risks, boost productivity, and improve cost-efficiency, which all adds up to success for you as CTO, and your organization as a whole.
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