Our experience with outsourcing shows the there are 3 common misconceptions related to outsourcing.

Outsourcing requires minimum work

It is a common misconception in the hi-tech industry that outsourcing requires minimal involvement from the outsourcing company. An outsourcing project is like any other project started by a company – there is decent level of upfront investment to reap long term benefits. This upfront investment in creating the right strategies and put together a viable plan is critical for the success of an outsourced project.

We suggest that companies contemplating outsourcing project must set aside budget and time to create an outsourcing strategy. More on this in a future post.

Lowest cost provider is the best provider

Many companies are blinded by the cost aspect of a project and take the easier route of choosing the company which provides the lowest quotation. Many times companies get stuck with a lowest cost vendor who finally is not able to deliver. This may cause project to be delayed and in the worst case may have to re-started with another vendor.

Lowest cost may mean that provider is knowledgeable or may mean that the depth and complexity of the project is not clearly understood.

In addition to the “cost” many other factors should be taken into consideration when choosing the “right partner”. Following are example of some of the factors which should be considered:

1. Do the two companies have the right chemistry?
   • Are they knowledgeable in the field of required expertise?
   • Does the partner company have a quality process required to build the products for our industry?
   • Do we have similar cultures?
2. Can we benefit from outsourcing to the company in the future?

• for development of new version of the produc
• can the partner help us support older versions of our products
• can the partner help us port our technologies to other products platforms our customers have been demanding

Consider more than just the “costs” before choosing the right vendor.

Assign the work and work gets done

Another common misconception in the industry as shown by a high percentage of outsourced failed projects is no involvement is required from the outsourcer.

In practice even after the project is successfully handed off to the chosen “right partner” company must expect to work closely with the company to make sure that even in case of unforeseen issues the project is completed and delivered meeting expectations.