Outsourcing software development is a common practice today.  Most companies contract a third party programming company to write their customized corporate applications.  Software development answers the needs of companies in developing their own applications to support their business operations, internetworking capabilities, and database and business intelligence management.  It is important to note however that software development is the most complicated and sensitive outsourcing project.  Companies therefore need to avoid several common mistakes when outsourcing their software development needs.

Companies need to determine their own organization s needs before contracting a software developer.  It would be a waste of time, money and effort if the software would not be very useful for the company s operation. 

Another common mistake in outsourcing software development would be to exact impossible expectations on the developer.  Of course it is but normal to expect that the outsourced job would perfectly fit in to the specifications of the company.  But companies should understand that custom software products will normally develop bugs and other problems.  Even giant software companies are plagued by application bugs.  So companies that outsource software development should include this in their plans. 

Finally, companies need to closely work with the software developer to avoid unnecessary problems.  Treating software development lightly would definitely lead to numerous application issues.  The process of outsourcing software development should be accompanied by careful planning and close monitoring of project development.  In this way, outsourcing software development would not cause much problems and unmet expectations due to lack of coordination with the contracted software developer. 

There are many offshore companies that can provide excellent outsourcing solution.   Companies desiring to outsource some of their business processes and operations should work closely with offshore service providers.  There are five important steps that should be taken before contracting an outsourcing solution provider. 

First, companies should carefully analyze their business requirements in order to determine their outsourcing needs.  Careful consideration should be done if outsourcing would enhance cost savings and corporate efficiency.  These requirements then should be discussed with the target outsourcing company in order to create a common understanding of needs and requirements.

Second, companies must determine their outsourcing model.  This is important in meeting expectations and avoiding any problems and misunderstanding with the offshore outsourcing provider. 

Third, companies must ensure that they can co-manage the human resource requirements of their outsourced business processes.  Most outsourcing companies will allow this in order to ensure that outsourced staffing and manpower hiring would correspond to the standards of parent companies.

Fourth, after the initial processes have been accomplished, companies should sign a definite contract of agreement with the offshore outsourcing company.  This will finalize the deal and ensure that both parties will be protected by existing laws and regulations.

Fifth, companies must ensure that they maintain oversight power over the operations of their outsourced business.  Outsourcing is not a fire and run business.  In order to have a problem-free outsourcing solution, companies must have a degree of control over the offshore unit.  This will also ensure that the quality standard set are always implemented by the outsourcing company.

Outsourcing solutions provide innumerable benefits to companies.  It has become a potent business tool for most companies that seek to streamline their organization and make their operation efficient.

The most important benefit of outsourcing for companies is cost savings.  Companies can save on wages and operational implementations through outsourcing.  Investments on technological infrastructure and technical support services could also be reduced.  The freed resources then could be applied to other productive endeavors or invested in further corporate expansion.

Through outsourcing solutions, companies can access the global skills and talent pool.  This access to a rich resource of technical knowledge and expertise could raise the quality standards of company services.  By tapping global talent, companies can focus on refining their own strengths and competencies.  Another important effect of outsourcing is the significant reduction of business risk to their operations.  Offshore outsourcing companies normally take responsibility to the outsourced operations.  This is a standard practice and should be included in the outsourcing solutions contract.  The reduction of risk is closely associated with improving quality.  Outsourcing providers will definitely produce quality products and services because their business is dependent on the continued partnership with the parent company.

Outsourcing solutions are ideal for any types of company.  They can easily find an outsourcing provided that will suit their business needs and requirements.  The benefits provided by business process and services outsourcing could improve the performance of companies.  It could make their operations more dynamic thus improving their competitive edge in the global business environment.

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