Why Outsource?

According to Nation's Business, outsourcing "has emerged as an essential growth strategy for forward-thinking small firms." Successful outsourcing companies are growing at an unprecedented rate.

What constitutes an outsourcing opportunity?

Management gurus divide business tasks into core- and non-core competencies. Anything that is vital to how a company gains a competitive edge, adds value to products and services or propels growth is a core competency. Such tasks are not candidates for outsourcing. But everything else is.

Consider software development. Creating great software presents the following requirements:

• Expert research and development to keep abreast of technology changes.
  
• Rapid specification by design teams to meet customer requirements.
  
• Development and documentation staffing to handle peak period production demands.
  
• Managing the quality assurance process, often a tedious effort.

Recently, a department within a large, multi-national company hired Stout Systems as their outsourcing firm. Their project required Stout Systems to write specifications for, design and implement a complete Windows NT-based client/server software system for use with the client’s proprietary hardware. It required custom graphical user interface tools, ActiveX components, a relational database, a communications layer for their hardware and expertise in Distributed COM (DCOM) technology. And the project had very definite deadlines.

The project manager could have hired three developers with the requisite knowledge; he knew full well that the recruitment phase would be long and that he would likely have three idle developers upon completion of the project. So he opted to outsource the work. Stout Systems was able to provide developers with the required expertise, so there was minimal spin-up time. The project deadlines were met.

At another company, an executive found himself wearing the hat of Project Manager for a product (in addition to his other duties, of course). The product itself was sound, but its support software, documentation and packaging needed serious attention. And the due date to have everything pulled together was close—real close. The executive decided that the critical success factor was the software; he outsourced the documentation and packaging work to Stout Systems. We handled the research and writing and phone calls and coordination, summarized the results in brief meetings and e-mails and turned over documentation for review. The executive was free to concentrate on the software with far fewer interruptions.

In any area where cost is high, quality can be improved, resources are not available or the work is a distraction, you should recognize a high priority outsourcing opportunity.

How can you gauge the quality of an outsourcing firm? First, they should have a proven track record of delivering high quality products on time. An outsourcing company should always be happy to provide references. Second, an outsourcing company should work with its customers to improve their core competencies. The transition period from outsource to customer’s employees should be planned in advance – this step increases in-house knowledge and expertise. Finally, the outsourced work should be thoroughly documented. Any source code should be well-architected and documented so as to be maintainable. The ultimate goal is for the customer to be able to take ownership of the outsourced project.