When the idea of outsourcing some or all internal functions is introduced in a company, the initial reasons for looking at this option are usually economic.  By shifting a significant business function into the outsourcing category, you reduce internal costs and head count which looks good on your annual report.  And there are some valid business functions that do well in an outsourcing situation.

But when considering which parts of your business are appropriate for outsourcing and which are inappropriate, you must take into account many factors so you maintain the integrity of your core business and don’t compromise your ability to function as a business and respond promptly to market pressures in your zeal to jump on the outsourcing bandwagon.

The best functions that are good candidates for outsourcing are software development projects.  Many times the vendors you contract to build a software solution for you may already have a product that fits part of your software specification.  So starting from that base, you can write the functional specifications to adapt their solution to your business needs and come up with a valid business solution with much less overhead than what would be needed to develop that product internally.

Many times software projects must be tackled by a business that are just too large for the internal staff to develop.  These are projects for which the software development lifecycle will be of a limited duration, perhaps a year of less and the size of the development staff will be large during that time frame.  But after the bulk of that work is done, you can return to a reasonable size development staff.  So this is a perfect situation to outsource much of that work so you don’t find yourself putting on staff only to lay them off when the work is done.

Areas of the business that should go under a greater scrutiny when they are reviewed for outsourcing are core functions such as computer operations, network management or project management at the team level.  There are a number of reasons why trying to make captive operations, or “owning” these functions as a business makes a lot of sense.

Operational functions such as running the network, producing payroll or processing orders touch on the core of the life of the business.  We have to keep in mind that no matter how high a level of trust you reach with a vendor to whom you outsource a function, that vendor is still a separate business whole corporate goals and objectives are not the same as those of your business.  So the intensity of commitment and the sense of urgency for maintaining a high level of integrity of operations may not be as high with contractors taking care of your core operational business functions as they would when being managed internally.

Management functions are also business models that are carried out more efficiently by internal employees rather than contractors.  Now in a project management situation for a short duration, outsourcing project management can work well if care is taken to integrate the contractors who are bringing their management expertise to the project with internal subject matter experts and build the lines of communications well.  It’s a good idea to have internal management also be on top of the project management being done by contractors to assure communications are going well and to help facilitate the project development process.

By using wisdom and approach the concept of software development and operations outsourcing conservatively, you can find the appropriate functions to farm out to contractors without putting the core functions of your business at risk.  And when you find that balance, you will realize the benefits of both approaches to business management in a way that is the best fit for your business.

When a new concept for a software solution is conceived of at the corporate level, it doesn’t always come prepackaged with specifications or even sufficient grounds in reality to know if the concept can be done.  This is often the disparity that occurs when business managers “think up” software solutions.  Many business leaders, who may be quite brilliant in the business side of your enterprise, conceive of a software solution to a business problem or a technical innovation to make the company more profitable.  Sadly sometimes the original idea may have more in common with science fiction than science.

But nonetheless, the software problem is often delivered to IT management and project developers with the charge to “make it happen” or at least come back with a feasibility study as to whether the proposed solution would reap the rewards.

It is not up to IT to limit the imagination of management so it is a routine procedure for project planners within IT to research how to go about putting together the solution.  If you can find similar software products or systems in the marketplace, you are encouraged because that means you may be able to come back to management with a proposal to achieve all or part of their dream for a software solution to address the very real and very present needs of the business.

The problem arises when  you need to be able to put some detail around the idea of a software solution but you may not have sufficient design work done to make that a reality.  This is where some creative methods to “back into” the software design and the project plan can give you a lot of design detail that is the result of someone else’s hard work and in depth development R&D which saves you a lot of effort and still allows you to deliver a good solution back to management.

The software developers who have already put together a similar solution as your concept suggests can be a tremendous source of detail to help you with your feasibility study phase of the project.  The routine method for putting a project out for RFP to outsource software development is to have a significant amount of the requirements definition and the project plan developed so you can specify to the contracted developer how the process will unfold.

But the model we are suggesting for actually using proposals that come back as a result of the RFP to provide you with detail for your feasibility study approach the problem differently.  Software developers who hope you will out source the final project to them are often very forthcoming with details, costs and design flowcharts to submit as a proposed solution to your business and IT problem. You just have to tap that desire to capture your business and you can harvest a wealth of design information and harvest it for free at that.

After you identify the short list of potential developers who may have a solution already designed, you can put together an RFP that is built entirely around a description of the business problem.  The challenge is given to the developer to submit not only a proposal for the cost of their proposed solution but a detailed description of how their proposed solution solves the problem you laid out in the RFP.

This approach to gathering specifications from developers can use the expertise of those who wish to capture your outsourcing business to give you a network design, hardware specifications, software recommendations, costs and development time frames that can jump start your project planning considerably.  It is not unethical to exploit the talents of established contractors because you very well may use them after all.  You simply are benefiting from a nuance of the outsourcing process that can yield you a wealth of free information to make you not only look smart to your superiors but more intelligent about the potential solution as well.

The economy over the last ten or so years has done a lot of strange things to different industries.  And for IT specialists which includes programmers, systems analysts, data base administrators, network managers and project leaders, the impact of economic changes has been particularly rough.  The large lay offs that have taken place in a lot of cities around the country has dumped thousands of highly trained and skilled systems developers on the street to flip hamburgers or park cars at the airport.

Within organizations, the need to be “lean and mean” has also meant that very often management has big dreams and plans for sophisticated software innovations but because of the internal budget, the staff to make those dreams a reality just isn’t there.  So some resource has been needed to match up these displaced technical workers with companies needing their services.  And as it often the case, it is the internet to the rescue providing you with some good online resources to connect up with systems developers who are finding a second life as cyber programmers using their skills for companies via online outsourcing.

Some of the premier project clearing houses online like Rent-a-Coder and Elance have an outstanding reputation of offering high quality workers that have built long resume’s of successful project work and giving you the vehicle to get in touch with them.  The good news about these sites is while they do charge a fee, that fee is usually structured into what you agree to pay to the selected contractor you may find there so you don’t have any real out of pocket expenses in using an online contract labor broker.

The internet clearing house has all the protections in place to assure that you as “buyer” gets good value for your money and the programmer is protected so he or she is paid if the project was successfully completed.  Here is how it works.

1.    Systems developers log in and establish profiles and résumé’s on the site listing their skills and their backgrounds so you can easily see which developers have the background you need.
2.    When you establish your account as a buyer, you simply open a project on the clearing house and detail the specifications for what you want done.  There will be categories so you can define the project as systems development, testing, programming, analysis or documentation and the right set of developers can find your project.
3.    Over the next few days you will receive “bids” from the developers in which they will discuss their qualifications for the job and the price they will charge for the work you want done.
4.    You select the bidder who has the best credentials for the job and fund the project.   Your funds are put into escrow so the developer knows the money is there and can get to work.
5.    When the project is finished and delivered, you review and test it before approving the payment.
6.    You approve the project as done and the web site pays the developer and everybody wins.

It might seem strange to outsource portions of your development workload to a cyber developer.  But you have all the protections you need to help you learn how to use this resource well for specific kinds of work.  The best projects or tasks you can put on an online job board are tasks that are limited in scope and easy to isolate to pass to a developer.  Web developing projects are outstanding choices for cyber programmers.

You can build long term relationships with internet developers and even find solid technical talent to hire down the road if it works out that way for you.  But using internet job boards, you can get some of your project work load done efficiently and usually economically as well.

The phrase “the world is getting smaller” is a popular one these days.  Of course, it’s not literal because the physical planet is the same size it has always been.  But the speed of communications particularly with the influence of the internet have opened the world up so you can literally communicate around the world at any time making us one big global community rather than dozens or of separate countries who never spoke.

This phenomenon is certainly true when it comes to software development.  It is now entirely possible and not at all uncommon to pull together a project team that consists of people from all around the country and around the world in fact.  You can execute an entire software development project with a team of people who never are in the same time zone and never see each other except perhaps by pictures or on webcam.  This is not just a pipe dream.  It’s a reality for many software development teams in this decade and in the current business world.

As a result the distinction between in house developers and outsourced developers can also blur.  Modern workers are used to dong business with vendors and contractors with the same sense of professionalism that used to be only possible with in house development teams.  And as we see younger people join the work force, that openness to a global marketplace and global teamwork will only become more commonplace.

The process for finding an international developer to outsource some of your software development workload is no different than finding any other outside vendor to do work for your company.  Don’t confuse using an outsourcing arrangement with an international partner with hiring.  You are using the services of a vendor so prepare an RFP and go the review and approval process the same way you would do with any other important business alliance.  The RFP should be detailed and technical and place a high requirement of proof of competency on the vendor so that you know that anyone who gets through this process is qualified to enter into the discussions phase.

Sometimes there is talk of the difference in cultures when you utilize a software development contractor from India or some other Middle East or Far East country.  While being culturally sensitive in some respects is called for, you are the customer and the responsibility for learning how to do business your way is on the consultant.  So be respectful but if the overseas company that wants to capture your business is not prepared to fulfill your expectations, you don’t have to use them.

This level of expectation mixed with cultural respect is a good mix in dealing with any overseas developer.  Keep in mind that if the project is going to extend over a number of months, you will also need to accommodate for different holiday time frames.  There will be many days off in America, such as the fourth of July and perhaps Christmas that your overseas partners will be working.  So keep them informed when that occurs.  By the same token, your overseas developer may have various religious or national holidays that can surprise you if you don’t write them into your project schedule.  Those anticipated times away from the workplace and not being productive should be documented in their proposal as a response to your RFP.

Put the potential developer through an expected level of scrutiny.  If you are negotiating with the management, insist you have the right of review and refusal for any developer assigned to your case and that the same developers get assigned and stay on your project throughout the project.  You need to be able to validate that they are able to handle the technical challenges that will come up.

Include in the RFP the requirements you will have for observance of your intellectual property which may include documents to hold your foreign partners accountable to protect your trade secrets.  They should be prepared to sign any Nondisclosure or Do Not Compete agreements necessary to get your business.

If you do your due diligence well, you can identify foreign software developers who will do well at participating in your project development process even though working on the other side of the globe.  And once you get the hang of working with a distributed development team, you will find the process to be efficient, effective and even at times fun.

For many modern businesses, staying on the cutting edge of technology is important.  This is particularly true if your business is heavily supported by your internet presence and generating traffic to your web site as well and the revenue you get from that site.  The pace of change in the world of technology is amazing and when it comes to the internet, change is virtually nonstop.

To try to keep up with that rapid advancement of technical innovation can be a major cost for any business.  If your business is centered on programming and technical development, then it makes sense to keep your employees constantly in training and dedicate much of their time to staying current.  But for many businesses, their core reason for being in business is not all about technology.  For the majority of businesses, the products or services that they offer to their customers are supported by technology and even facilitated by technology but the IT department is a support function of the business, not the other way around.

But by enlisting the aid of a software development outsourcing company, you can keep on call a group of people who will stay cutting edge and be able to keep your company moving forward as well.  This is a different kind of software development outsourcing than using contractors to finish up the coding of your most recent upgrade to the accounts payable system.  By turning to organizations who are dedicated to staying on top of the fastest breaking trends in IT networking, internet technologies and other technological advances, you can make a plan to routinely conduct technology reviews with your trusted advisors to see how you will keep your company plugged in and up to date.

Moving forward in terms of development tools is a big challenge for any company.  While not that long ago if your IT people knew COBOL and a bit of C++, you are good to go for any kind of technical challenge.  And while the languages are enduring, you have access to development people who are skilled in modern development toolsets such as “Dot Net”, Java and other internet driven development languages.

For one thing, if you use the web extensively, you will need to build interfaces between older “legacy” systems and your modern data base management systems and the internet front end to your users.  By building a strong partnership between your in house staff and your contractor team, you can have them in a constant process of review and upgrading the interface protocols so the data flow from up to date internet customer interface systems work well with older technologies that feed data to the front end and manage the tracking and accounting for the business done online.

Outsourcing your company’s mission of staying current takes much of the cost and effort off of you to be constantly one step ahead of the technological world.  You can bring in your contract advisors to keep you and your technical team leaders up to date on what is hot right now and what can be expected around the corner and together plans can be made to merge the old and new technologies and to upgrade staff knowledge in a systematic way that can be budgeted for well in advance.

Your employees are not likely to resent outsourcing market knowledge of technical changes because it takes much of that burden off of them.  The task of keeping your corporate IT infrastructure running smoothly is an important function IT does for the business.  So if IT can also look to the advice and guidance of contract labor to know what changes to begin planning for to keep the company “cutting edge”, that is a good division of labor.

It is easy to “jump on the bandwagon” of outsourcing software development.  Using external developers and outsourcing to places like India has become so common and prevalent that it’s easy to think that it is always a good idea in all cases for all projects.  But this is not necessarily so.  As with any big project management methodology, outsourcing the development has downsides and hidden perils that you must be aware of before getting into this unique approach to handing a large development workload.  So it’s a good idea to discuss what can go wrong and what kinds of litmus tests you should use on a project by project basis to make sure you don’t make a mess of outsourcing.

One of the easiest ways to mess up software development outsourcing is to simply turn it over to an external agency and walk away with the expectation of returning to managing the project six months later to find a perfectly developed project.  Outsourcing does not and should not mean”out of sight, out of mind”.  To avoid the disasters that can occur if you just “cut loose” a contractor with nothing more than the initial specifications to go on, you must have a high level management person in IT or in the business to monitor the process on a routine basis.

As part of the initial contract, you will set up a communications protocol that your outsourcing developer will live up to scrupulously.  This includes daily email updates, a weekly status report and a change management process that is systematic and thought out in advance when problems come up or changes need to be introduced to the project.  By staying on top of the project from RFP through roll out, you are being a responsible business owner and you are retaining both the authority and the responsibility for the project turning out well.

Assuming that software development outsourcing is an automatic cost efficient alternative is not either prudent or efficient when filling the roll of IT management or project leadership.  You should verify that on a project by project basis, outsourcing the development is the best cost conscious decision compared to developing the project in house.  To be blunt, many times the temptation to outsource development comes from poor management of internal resources and the myth that any contractor will be easier to manage and be able to be the savior of an otherwise unproductive culture in your IT department.

Don’t let outsourcing be your methadone for the real work of turning around an unproductive corporate culture in the IT department, cleaning house and taking the management initiative to turn your internal development resources into a productive software development resource for the company.  Simply outsourcing the work because you have trouble getting good work out of your on staff developers is lazy, bad management and will only lead to more costs for the company not less.

If it is verified that outsourcing the development is the efficient and cost conscious way to go, you must implement proactive communications systems with your contract workers on a regular basis.  This is especially true if you are working with an outsourcing company over seas.  Be sure that during the RFP process you confirm that the contractors who want your business are good communicators and will keep you informed every step of the way that the work is being done well.  Then and only then can you be assured that the work is on target and that problems are surfaced early so they can be addressed before they serious threaten the project.

Do not assume that when you hand off a development step or even the whole project to a contractor that it immediately becomes “their problem”.  The IT department are the ones who are responsible to management that the work gets done correctly.  It will be you who gets the credit if the project goes well.  But if the project goes badly, yes the developer may not get paid.  But at the same time you will have a failed project on your department resume and that is a terrible price to pay for selecting the wrong contractor or for not managing the software development process aggressively.

Sales people are a wonder to behold.  And when you are receiving proposals for outsourcing your software development project, you will meet sales people so slick they could sell you the cloths you are wearing.  They will come to you with a dazzling PowerPoint presentation, a slick proposal document and a budget to take the entire team to lunch to ice the deal.

While you can enjoy the skills and the lunch, as a business person, you will put that proposal through some serious scrutiny before you sign off on moving to the next phase of the negotiations.  In most cases, if the sales part of the team brings along technical support persons, those will be the individuals who will be able to give you the best answers to your questions.

It is not out of line and in fact it is advisable for you to have your senior project developers in your staff IT department sit in on any proposal for outsourcing software development.  That IT management person may also wish to have part of his technical staff in attendance to talk “techie to techie” with the technical support people who came with the slick salesman to make sure this contractor not only can put on a good show but has the technical credentials to perform the work being proposed.

If the discussions are going well, it’s a good idea to get to know that outsourcing company well before you enter into an important development project.  You are within your rights as the one who is going to pay the bills to meet each and every analyst, programmer, accountant and support person who works for the development company and have your corresponding staff people have a dialog with them as well.  There is a lot of information your subject matter experts can extract from a meeting with their peers on the development company.  They can ask questions about programming languages, the development operating system, utilities and development toolsets and releases of software that are necessary to get the job done.

If the developers know what they are doing, they will come out of those discussions in great shape.  And the dialog will begin a relationship between he two technical teams that will be useful during the project development life cycle as the contractor and the staff IT technical experts interface the new solutions with existing legacy systems.

If the developers are not up to the task to develop the software you need created, that too will come out when your trusted staff people surface inexperience or lack of knowledge or skills that will cripple the project.  Better to find that out before you sign the contract than after.  If you do identify such problem, it could be that you were not necessarily being “scammed”. It could be that the contractor agency themselves were not aware of the lack of depth in their developers and losing your business will enable them to go back to their business and build a solid development team before bidding on another project.

There is a final level of diligence that can yield a wealth of information about the contractor putting themselves forward to bid on the job and that is to go and visit their development offices.  You can learn a lot about a company by walking around in the facility where their programmers and analysts do their work.  Is the environment well lit and modern looking?  Are the workers cubicles neat and efficient?  Do you see creative interaction going on between workers?  Can the vendor demonstrate that they have sufficient development systems and tools to complete the work being outlined in the contract?

If the contractor who is looking to take on a large software project for you is not willing to let you get to know their staff and see their facility, that implies that there may be some “smoke and mirrors” in their proposal.  That company that wants you to outsource development to them should be open and ready to show off their talents and to showcase their teams so you can feel confident in their ability to do the work specified.  And if they pass all of these interviews and visits with flying colors, you will have a contractor with whom you can enter into a contract relationship with now and look to work with often in the future as well.

The first step of any project to outsource project development is to put out a “Request for Proposal” or an RFP.  This document is the groundwork for what you are going to outsource and what you will expect those applying for the job of being your contract labor to do.  It will also be the basis for the cost evaluation they give to you and the justification for the expense they expect to assign to this project.

The quality of the proposals you get will depend entirely on the quality of the RFP.  You must give the candidates for the outsourcing work sufficient detail to work with so they can come back with a quality proposal that addresses the need of the software problem and includes a comprehensive solution.  That contracting company wants to put a proposal in front of you that is complete, demonstrates that they can do a complete job for you and still is competitive with others who will be competing for the work.

If you get proposals back from the release of the RFP that vary widely in price and detail, that may reflect that you did not give the candidates for the job sufficient detail to give you well thought out bids.  A good software development company may submit a bid on a poorly written RFP but they will “pad it” so there is sufficient costs to cover any parts of the project that are ambiguous in the RFP.

This back and forth process of reviewing the proposals and narrowing down the candidates can take some time.  But by the time you have the crème of the crop selected and finally eliminate the rest of the candidates so you have chosen the best contractor to do the job, your project will have already undergone significant development and you should be in good shape to start the discussions with the selected agency to perform the work in the context an outsourcing agreement.

In order to come out of the contract discussions with a document that will be the foundation of a successful outsourced project, that contract must be specific in terms of costs and schedules.  The project schedule should break down into milestones and tasks that support milestones in sufficient detail that you can track the progress of the project on a weekly basis.  The use of a good project management tool like Microsoft Project is a great management resource for making sure your outsourcing contractor is on track with the project you have assigned to them as well.

Just as the schedule should be broken down into milestones and tasks so you, the project sponsor, can monitor the progress on a weekly basis, the price tag that is submitted to you should be broken down in sufficient detail so you know what is being offered for that price.  For example, if that cost gives you the use of five analyst programmers for three months, it must be stipulated that the entire project goals will be accomplished with that resource and if there is a need for more developers, that is the responsibility of the contractor, not you.  The cost should also break out the use of contractor resources such as development and test environments, travel and accommodations for consultation and any associated costs.

If that budget is well documented, you will be able to determine in some detail if the contractor knows well in advance what it will take to do the job and that they have everything documented that will represent a cost.  This will head off any appeals that could come in after the project is launched on the excuse of an “unanticipated cost” which would run your bill up.

By the time you and the company to whom you are outsourcing the development sign that contract, you will have a working document giving you a rich detail of not only how much the project will cost and when it will be completed but the inner workings of how the contractor will accomplish that goal.  You can then make the contracting company live up to that contract because you were way ahead of any appeal that issues or costs came up that were not anticipated in the contract.  In that way, you keep control and get the work done in the time frame and at the price that you agreed to in the first place.

Outsourcing the developing of a software solution should be part of the considerations for addressing any business problem that can be resolved with technology.  Because technology moves so quickly and any new software development can touch on a lot of parts of your organization, it has become more the norm than something unusual for any company to use contractors and to outsource some of the development work to stay on track with the business goals of the organization.

As with any vendor relationship though, there are ways to mismanage the outsourcing process and create opportunities for failure for the project.  Nobody wants that to happen so if you as the business doing the outsourcing know your responsibilities in the relationship, then the contractor will be enabled to do a great job for you.  That makes them a success and you a success and creates a business relationship that can go for years.

One of the biggest mistakes in outsourcing development is to put too much of the project design or definition on the contractor.  Remember, you are hiring a worker to do a job and at the heart of that relationship, the assignment is not that much different from calling in a plumber to fix the pipes or hiring painters to spruce up the walls.  The contractor needs to be managed and must have clear guidelines on what is being done and what the criteria for success will look like.

You are the boss of any company you outsource work to.  That means that it should not be the contractors job to define the work they are going to do.  For one thing, if you leave it open ended what needs to be done, any consultant will have the natural tendency to make the job as big as they can make it.  The old saying about consultants that “no job is too big, no fee is too large” applies to anyone working on a contract basis.  So putting limits around the job is your responsibility, not theirs.

The first task that must be accomplished before you start your consultations with outsourcing agents is to define the problem.  You have to know what you want done and how your problem can be addressed by a software solution before you turn over the problem to a contractor.  Remember that software cannot be a solution to management problems.  If you are having trouble with inventory, with employees or with some other management situation, you cannot make a computer be a better manager than you are.  So don’t ask a contractor to solve a problem with a computer that is not a computer problem.

Problem definition is often a difficult process but you no doubt have on staff skilled systems designers and project leaders who know the project development method well and can help guide management through the problem definition process.  Tap the talent you have on staff to define the problem and lay the groundwork for a software solution.  Then when you bring in a contractor to consider taking on the problem, you are giving them clear direction to start with and something concrete upon which to base their proposal and their price.

The more can do to remove opportunities for speculation or interpretation in what you are asking your contractor to do, the better your relationship with the contractor will be.  By developing a detailed definition of the problem, that exercise itself will give you a template for what the solution will look like.  Now it is not out of line to use the talents of a contractor or outsourcing company to perform the systems design of the software you want to have built for you.  But that systems design should be built on a well defined problem definition and needs analysis.

Remember the contractor will never talk you out of doing a job.  But your on staff project managers will.  Seek balanced counsel in what software projects justify the expense of using contract workers and which ones are not candidates for outsourcing.  By doing this fundamental definition work within the management team, using the analytical and technical knowledge of your staff analysts, you will have a clear outline of the work you want done when you start the outsourcing process.  And that groundwork will be the foundation of a successful solution for your business as well.

When you outsource a project or a task of a project to an external agency, one of the biggest concerns is control.  One of the biggest mistakes, then, that companies make when turning over an IT project to an outside company, whether than company is local or as far away as India, is not maintaining the same level of diligent control over the project that they would keep if the project were begin done in house.

It is important to use the same project management methods to assure that outsourcing freelancers or companies are held accountable to a strict set of standards and that their work is being checked that it is on track with what the company needs and has asked for.  If you turn over a project to an external vendor and walk away for a month or two without any review over what they are doing, you have a high probability that you will not get what you asked for when the product is delivered.

Local control over the work being done by outsourcing companies is critical to assure the business is getting what they are paying for from the company doing the work.  This is just as important whether the job is a two week long documentation project or a three year project development process.  There should be a single management individual assigned to keeping tabs on the vendor or vendors to whom the work was outsourced and to hold them accountable on a at least a weekly basis.

There is no substitute for maintaining a tight adherence to project management standards even if the tasks of the project are being outsourced.  That means that the project must go through a strict requirements definition and specifications development so when you turn the project over to the outsourcing company, they have a clear mandate for what they are being assigned to do.   Before the freelance contractor or outsourcing business is given the contract to perform the work, they must participate in the project definition phase and sign off that they understand the ENTIRE project and the expectations and deliverables for the phase they are accepting.

Further, it is important that the contractor understand the interfaces they must be able to support and the business needs of the project itself.  There are no IT projects that exist in a vacuum.  They all are justified by the needs of the business.  And just as internal IT departments are held accountable to those business needs, external vendors doing the work in an outsourcing mode must also understand those requirements so they can deliver a product that fits the need of the project in the first place.

Projects being done in an outsourcing mode must also participate in routine project team meetings, even if that participation is by conference call.  These weekly meetings are crucial for assuring the project is on track and to surface any problems, questions and follow up tasks that must be done both internally and by the vendor to assure the project is not drifting away from the scope and the specifications of the definition documents.

Vendors performing work for the IT department must also be prepared to submit weekly status reports and to undergo routine reviews of the work they are doing by internal management.  These communications tools can be used by the internal project coordinator to monitor that outsourced project steps are being conducted in sync with what the company asked for and that the project is on target for completion in accordance with the project schedule drawn up before development gets underway.

If the outsourcing company balks at being held to a standard or auditing and communication about their project progress, that is grounds to eliminate them during the RFP process.  Early in the process of selecting the company to receive the contract to perform the outsourced work, you must determine that the vendor understands the project development method and that they will be compliant with the process and answerable to management’s questions and concerns.

They must also be aware that change to the project specifications are not to be tolerated without the formal process of going through change management to assure the changes are in step with the project goals.  If the vendor is able and willing to abide by these constraints, you will have a productive and fruitful business relationship with them.