How to effectively manage an outsourced IT project?
When your business is small and growing to become the next big thing, you have limited budget and workforce and yet numerous positive NPV IT projects that your business needs to undertake. So with the limited resources you have, how do you effectively manage and ensure your projects are completed within the timeline you set and the budget you allocated?
Before you could start to do anything, you would have to layout what implementation options you have because how you are going to do it affects how you are going to plan and manage it. Building it in-house or outsourcing are the two most common options you would have. There are pros and cons of each, so which one should you pick?
In-House Pros
Efficiency: An on-site staff can be reached and communicated with to resolve issues immediately. It is your dedicated resource rather than shared with other firms.
Control: As a full-time employee, the salary is static and appropriate pressure applied could achieve higher productivity.
In-House Cons
Upfront costs: Hiring a full-time is expensive, especially the more capable and qualified candidates cost higher. Usually it is not a viable option for small business.
Outsourcing Pros
Less expensive: Theoretically, it is less expensive than hiring a full-time IT employee in-house. Overhead costs are spread over several clients via the agency model.
Outsourcing Cons
Language or cultural differences: Different cultures and different expectations. Communication issues. The risk of uncertainty of knowing how the outsource firm performs after you have signed up.
Quality Issue: Quality may not be what you expect until you try it out yourself.
So which one to pick? Outsource Locally
As a small business, inevitably outsourcing is the best option to go for since the business could focus on its strategy and core business. However, to reduce the risks associated with outsourcing, it is best to seek for outsourcing in the local region. It provides the right combination of cost savings and monitoring without the language or cultural issues that sometimes arise with offshore firms.
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