7 Useful Tips for IT Outsourcing Management


Outsourcing is an excellent tool, but there are significant risks associated with IT Outsourcing if not properly managed. So, how do you get good IT Outsourcing management? Here are seven tips from Lotus QA to help you maximize the benefits of IT outsourcing.

1. Prioritize the outsourcing of minor operations

If you’re new to IT Outsourcing, you might want to take it slowly at first. Rather than beginning with large-scale IT Outsourcing, you should begin with minor IT functions first. These functions are easier to train, so they will provide you with a head start.


You might want to outsource testing, for example. You will begin with manual testing to perform unit testing, integration testing, functional testing, and so on. Then, once you’ve determined that the team is fully capable, you’ll move on to automation testing, which requires more complex work.

This can be viewed as a litmus test for the effectiveness of IT Outsourcing management. This type of “trial” allows you to get a sense of what IT outsourcing is like and what it takes to manage an outsourced team successfully.

In the worst-case scenario, even if outsourcing does not meet your expectations, it will only affect non-core functions. The critical components of your business will be unaffected. As a result, the risks are reduced.

So the question is, how do you determine which operations are of minor importance? It leads us to a method that has been used for many years – the strategic-versus-commodity approach.

Your operations will be divided into two parts for this approach:

  • Commodities that do not set you apart from your competitors. These can be outsourced.
  • The strategic functions that are critical to your company’s success. This is something you can keep in your office.

However, keep in mind that there is no one-size-fits-all approach for your commodities and strategic functions. That is, it is dependent on your ultimate goals as well as how you carry out the contract.

Even if you’ve already defined it as a commodity or strategic function, you can still consider other suppliers’ bids. You should give it a shot if they can guarantee quality while keeping costs low. Many businesses have used this approach with a short-term contract, say two years, to determine whether or not they can outsource their strategic functions. Will you continue to outsource based on the outcome of the contract?

2. Define your goals and requirements

To achieve it, you must first understand what to expect from IT outsourcing. It’s not general terms like cost savings or a large talent pool – these are too obvious. You must divide your objectives into smaller goals, each of which will include a checklist of what actions, units, and issues to address.

You might want to outsource performance testing, for example. You must divide the overall requirement into smaller requirements for each stage of the process:

  • Requirement analysis: you want the outsource team to understand what they’re up against, and you anticipate a question list to help clarify the project.
  • You want an analysis and the creation of a test strategy, plan, schedule, test environment, test viewpoint, test design, test scripts, test scenarios, test cases, and so on.
  • Testing execution: you anticipate a bug report, a test log, a test report, and so on.
  • You want a high-quality report on the entire project.
  • You can then devise strategic steps to achieve the aforementioned objectives.

With the detailed specifications of what will be outsourced, your company can develop the agenda and allocations for the next stage of the outsourcing project. Clear goals and requirements can also aid in the management of the outsource team. Anything that falls short of the expected results will be reviewed and, if necessary, redone.

3. Select the appropriate types of outsourcing

In practice, location distinguishes onshore, nearshore, and offshore outsourcing. However, the difference in proximity can bring about different edges that you can consider when deciding on an appropriate outsourcing type.

When you need to outsource work to a foreign country, consider using offshore services.

  • You place a premium on communication with the supplier.
  • You don’t want to be concerned about language or cultural differences.
  • You want easy access to your suppliers so that you can better control and supervise them.

When it comes to software outsourcing, nearshore is ideal because:

  • You want to ensure both continuous communication and cost savings.
  • You want your teams to be culturally diverse.

When you need to outsource your work, consider offshore outsourcing.

  • You place a high value on cost-cutting measures.
  • You don’t mind the time difference.
  • You want a larger pool of talent.
  • You can select one of the IT outsourcing types listed above based on your priorities.

4. Determine which IT outsourcing management model is best for you

It is critical that you understand the IT outsourcing model that is best for you. Knowing your outsourcing models allows you to understand the fundamentals of how you will manage your outsourcing projects as well as the model that best fits your financial situation and plans.

Before signing any contract with an international technology outsourcing company, you should investigate these IT outsourcing pricing models. Knowing how you intend to collaborate will allow you to create better plans that streamline your visions and goals. Lotus QA employs the four IT outsourcing pricing models, which are as follows:

  • Project-based learning (for businesses that have clear objectives and fixed budget)
  • Time and Materials (for businesses that want flexibility)
  • Dedicated Team (for Companies)

5. Implement a stringent security procedure

IT functions are difficult enough to secure for an in-house team, let alone outsource them to an external team. When it comes to IT outsourcing management, many businesses are concerned about being more vulnerable to security breaches and other issues. To address this, you and your company must devise a stringent security procedure to eliminate any security risks.

It is also critical that you find suppliers who can provide you with the highest level of security. Here are a few features to consider:

  • Layers of physical security (CCTV system, safeguards, fingerprint, etc.)
  • Legal discretion is required (NDA, staff confidentiality, etc.)
  • Network safety (VPN, Data leak prevention, close-up monitoring, etc.)

6. Create an efficient communication process

Communication has long been one of the most difficult issues to resolve in IT outsourcing management. Simply put, without effective communication, your IT outsourcing implementation is doomed to fail. Here’s how to avoid this:

The client provides you with requirements and specifications to study and build a plan during the definition phase. Meetings are scheduled on a regular basis through a variety of channels and platforms.

Communication will no longer be a problem with IT Outsourcing management if necessary measures are taken during the outsourcing process.

7. Select a partner who can assist you with your work methodology

Agile, V-model, and Waterfall are the most popular methodologies in IT Outsourcing management. Whatever methodology you choose, it is essential that you outsource the work to a vendor who has experience and expertise with the methodology in question.

For example, if you want to use agile for flexibility and a faster time-to-market, you must outsource the work to a supplier who:

  • Has Agile personnel with experiences, such as a Scrum Master or a product owner.
  • Has worked on multiple agile projects and understands how agile works.
  • Is acquainted with incremental and iterative operations.

How can you ensure that everyone’s work is in sync with one another’s? The solution is to create a unified playbook for everyone to follow. This playbook will include a detailed workflow, background information, and all materials required for everyone to further streamline and adhere to the project’s standards. This playbook can be written or illustrated. Instead of plain text, include some wireframes, diagrams, and visual aids to help convey your ideas.

Finally, IT outsourcing management has always been a challenge that you must master if you want your outsourcing team to be effective. The tips provided above will assist you in successfully managing IT outsourcing. More importantly, these tips can only be successfully implemented with the assistance of an experienced outsourcing vendor. Their experiences and expertise can assist you in integrating your company and their outsourcing team into a single cohesive, functional unit.


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