How should I approach IT outsourcing?

For many the word outsourcing has a very negative connotation. When they think of outsourcing, they picture underage employees in third world countries working for salaries, which would be worthless by first world standards. Some also feel it’s taking away local jobs. However, outsourcing has evolved so much and no longer resembles this stereotype. Outsourcing practices has evolved and matured over time and gives you lot more choices now.

If done well, outsourcing can get you great competitive advantage. It can help you focus on what you do best, thereby allowing you to get better at that while non-core work is taken care by teams who are good at those kinds of work.

In over decade of working for fortune 100 companies to small start-ups, here are the main factors I see that drives success in an outsourcing engagement:

Define your quality standards

The first step in building a positive relationship with your outsourcing vendor is to clearly state your expectations in terms that they are measurable and quantifiable. It is not sufficient to state a vendor that you want good quality product. I rarely see companies defining their quality standards and expectations before the engagement starts. In most cases, it’s not even defined clearly after years of engagement.

You cannot track and maintain something that is not defined.

What after defining the quality standards?

Once the standards are defined, evaluate the vendor against the quality standards. Validate if the vendor fits into your set parameters.

After you have identified your vendor, you must look for ways how you enable entire team to achieve it. Your vendor can help you in this too. There must be clearly defined benchmark for onsite team as well as the vendor to meet per quality standards. Finally, device required processes and use tools to track all developments so that corrective steps can be taken on time.

When outsourcing does not compromise on quality?

Outsourcing does not always compromise quality. Here are the top factors to achieve quality in outsourcing:

  • Choose value over price – You can always find a cheaper option in some part of the world. This is a dangerous trap. Lesser margin means cheaper labor, which will often be lower quality. Cheapest can often result in lowest quality output. So, look for overall value not just price. Low quality is often more expensive overall in long term whereas, quality work is often more cost effective.
  • Set quality standards and expectations – without clear benchmark you cannot compare & correct. And, by having expectations clearly defined enables everyone involved to deliver better.
  • Due diligence in identifying the right vendor – look for their work history and verify. Evaluate their work experience and validate. Choosing the right vendor could be the one most important decision in success and failure. Once identified, you must empower them the help you achieve better quality. Be driven by ideas, not hierarchy.
  • Devise enabler systems and processes – Right amount of transparent systems and processes can help you remain in control. You should be able to track and measure all measurable activities. Quality is created, it doesn’t just happen. Be driven by data, not impression.
  • Quality communication– High quality communication across teams is paramount is success of any outsourcing engagement. Better you communicate, better you results you can get.
  • Devise your own path – everyone will have their own experiences. Devise your own best practices. Just because a practice is working in a company doesn’t mean it’s good for you. One must work towards having minimal processes to avoid unnecessary overheads.


Quality is output of an ongoing process that produces product or service. To achieve high quality output, we must ensure quality at every level.It’s teamwork. Quality must be maintained at every stage. Without quality, attributes such as agility, consistency, responsiveness, etc. lose their relevance.

Quality is not a state but an outcome of a process. There is no other way but to continuously improve on quality – to delight customers.

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