How to Go about Application Outsourcing

Those looking into application outsourcing should perform the following tasks before they look into where and what they will outsource.

First decide what parts of a project will be outsourced and then to create a realistic budget to avoid cost overruns and other problems. Long-term planning is necessary in order to know what to do when the application is finished and who will take control of application maintenance. Lastly, an organization must decide where to send their outsourcing work.

Where companies go for application outsourcing

Outsourcers should either look into individual freelancers or an outsourcing firm that specializes in application programming.  In order to find freelancers, first go to freelancer websites such as freelancer.com, elance.com, etc. A lot of different freelancing websites can also be found using a simple search engine query for “application freelancing.” Write clear and professional job postings in order to attract top freelancing talent and try different sites.

An alternative to freelancers is choosing an outsourcing firm. Top firms include Accenture, Tatvasoft, Unisys, and CSC. Get proposals from multiple firms in order to receive the best deal possible. It is extremely important to look at the service level agreements that the firms provide in order to find one that best suits the need of the hiring organization.

How to attract top outsourcing freelancers

More money, not surprisingly, will attract better freelancers. Top freelancers want professional projects for both the financial rewards and as resume builders. Therefore, work terms and expectations should be written for the freelancer. Finally, companies that reply to all those who bid on a project will build a good reputation and attract more people the next time they post.

Application outsourcing problems and solutions

As with almost forms of outsourcing, there are various problems that hiring organizations will encounter. However, for the most past, there are always ways of mitigating or avoiding possible problems.

  • Communication– To reduce the number and severity of problems, it is important for the two partners to clearly establish the expectations and requirements of the application service in order to avoid the pitfalls of communication barriers. Hiring organizations should make sure that the outsourcing firm will be able to make the software vendors deliver (since much of it is vendor based). It can be accomplished by establishing a service level agreement that will ensure compliance to a set level of expectations.
  • Security– Hackers often will try to break into an application’s code and access sensitive, valuable data or cause other problems. Thus, it is important to research how secure outsourcing companies make their applications. Applications with even minor bugs are under serious threat of being hacked. It may be necessary to hire another firm to check application security and fix errors. Outsourcing firms that specialize in application security should offer services to include run-time scanning, source code reviews, advanced manual testing, ethical hacking, application security assessments, identity management, secure authentication, and SOA security services.
  •  Application maintenance– One of the main concerns for hiring organizations is who will be responsible for application maintenance after the application is built. The application will most likely need to have bugs fixed and other patches, and how this will be done must be spelled out in the SLA. Keeping the same organization for maintenance and updates offers the advantage of having people who are familiar with the workings of the software throughout the whole process without added training.

What services are provided through application outsourcing?

Application OutsourcingApplication outsourcing is a broad term, and many organizations may not be entirely sure of what services it covers. The following list provides the typical services that organizations can expect to receive from application outsourcing.

  • Application Development – This service involves the outsourcing firm providing skills for application development in a managed service environment. Often, the outsourcing firm will develop and enhance a packaged application software for clients. A good outsourcing firm will offer a wide range of support throughout the entire life cycle of application development. Outsourcing firms should have well-established System Development life cycles (SDLC) but often can adapt to the processes and deliverables that clients use.
  • Application Support and Maintenance – Outsourcing firms can provide support and maintenance in addition to building an application for a client. The outsourcing firm will help resolves problems, incidents, and bugs that are almost always be present in all new, modified, and existing applications.
  • Customer Program Management –This involves outsourcing firms devising a solution that uses one point of accountability (usually a manager) for service and contract phases of delivery. Often, the outsourcing firm will dedicate a manager and supporting team for program management to will work extensively with the client through all phases of the transition process. This is beneficial to organizations because one person manages a contract, provides flexibility, and allows changes to be added as the application process continues.
  • Application Operations – Application operations involve day to day services in relation to applications. This includes monitoring of applications, performance testing, application patching, application access level control, functionality, and performance.  The support offered by outsourcing firm should include all aspects of an application life cycle.

Successful outsourcing stories that companies can relate to and imitate

If an organization is still unsure of how they can benefit from application outsourcing, there are plenty of examples of how organizations had an application need and got it solved through outsourcing. Here are some examples that should be imitated by other organizations.

  • Edcon– Edcon is a South African retail group with more than 1,000 stores across southern Africa. Edcon was having trouble keeping its IT infrastructure in check with the allotted budget and had significant business challenges in regards to application development. Edcon decided to outsource in order to avoid the costs of building applications in house.  The outsourcing firm standardized services and developed new applications and capabilities. The new applications include a supply chain management solution, a Microsoft based business intelligence solution, and a credit management system.  Overall, the outsourcing firm helped Edcon reduce IT costs and helped them cope with the rapid integration of newly acquired companies.
  • Canadian Satellite Radio– Canadian satellite radio is the XM radio for Canada. It offers subscribers 120 channels of radio programming.  The radio was having trouble managing the entirety of its customer base as well as building applications in order to support core business systems. The satellite radio station decided to turn to an outsourcing firm. The outsourcing firm helped build applications for the satellite radio to manage their clients, built new billing/ customer care systems, and helped reduce IT costs associated with operating core business functions.