Outsourcing Digital Transformation
A decade has passed since the term digital transformation was coined, but it has taken a life-changing pandemic for digital capabilities to substantively alter how businesses operate. The pandemic has given many organizations an unexpected crash course in digital transformation. While much progress has been made — from hardware and infrastructure to updated work processes and a rejuvenated corporate culture — many organizations are confronting the question of how to integrate fragmented and often makeshift digitalization efforts in a way that’s sustainable. Most of these organizations, reeling under the effect of the pandemic, are still relying on a mishmash of apps, emails, and other tools to get by.
The pandemic was only the latest in a series of episodes that have illustrated just how much uncertainty our society, our leaders, and our organizations must contend with. We see two major ways that digitally driven strategies offer organizations the opportunity to succeed in the long term. The first is by enabling resilience or the ability to thrive amid uncertainty and change. The second is driving differentiation, the ability to deliver value that most would find hard to replicate. But while leaders may not be able to control the pace of change dictated by external events, they can develop their organizations’ capacity to navigate that change effectively, defend against threats, and take advantage of new opportunities.
The upside potential is clear: With organizations slated to spend approximately $6.8 trillion on digital transformation by 2023, they’re aggressively seeking to lower operational costs, accelerate speed to market, and unlock new opportunities. But companies also can’t afford to rush in blindly — the 70% failure rate for digital initiatives is alarmingly high. Leaders and shareholders might crave near-immediate returns, but the path to digital maturity is an arduous one.
This is the precise reason why companies are relying on outsourcing partners to be able to augment their workforce and build enterprise applications with a fraction of the cost which would have otherwise eaten into their development budgets.
If you are looking to outsource digital transformation, this article is just right for you. Through this blog post, we would explore some of the aspects which you would need to keep in mind for a seamless outsourcing experience with your partner/vendor of choice.
Types of outsourcing partners - There are various types of companies with varying capabilities which you could look to tap into while deciding on the nature of engagement you would want from your partner. Some of the more popular engagements which agencies/vendor offer include:
Consulting – Typically a digital transformation consulting partner would engage in advisory services helping you better understand the pain points in the stakeholder customer journey and helping you outline digital interventions which would eliminate some of the biggest pain points. Typically, a consulting partner would engage in providing you with a transformation roadmap taking into consideration various market trends which affect the technology delivery, and would present to you the scope of services you should engage in.
This type of partner is most useful in if your organization does not have digital strategy professionals who can shepherd you to some of the low-hanging fruits.
Consulting + Build – This kind of engagement takes it a step further from the consulting-only engagement into helping develop the solutions outlined in your digital transformation roadmap. In this form of engagement, the vendor deploys his resources to help you launch applications that help you with your digital transformation initiatives. Once the applications are developed, they could be handed over to your internal teams for deployment and training.
Full-service – This type of engagement ensures that even after the delivery of the applications, the vendor is still involved with maintenance and/or hosting, adding features and upgrades as technology continues to evolve over time. Understandably, the vendor would function as your strategic partner in your digital transformation journey, helping you evolve as an organization.
Choosing the right engagement model - The engagement model is the type of relationship between the outsourcing company and the client. Vendors can offer different types of engagement models, and you should choose a plan that fits your project’s requirements and scope. Typically this would depend on the requirements, scope, and the proposed budget for the project.
Need for a point-person / product owner – When it comes to your project and its software product development, there is no such thing as too much information. Instead, what should be happening is to have active participation in the development process, which is only possible if you have a dedicated product owner or a single point of contact to ensure that the vendor always keeps you in the loop with all that’s happening in the project.
The suggested product owner should not only be conversant with the current progress but make sure the outsourcing team uses tools and methodologies that keep you in the loop. A detached and hands-off approach can easily lead to misunderstanding and communication gaps that prolong the project's final delivery.
Define clear project scope and schedule – Every project will benefit from a clearly laid-out road map to completion, but this element is especially important when outsourcing your product development requirements. Not only will this set concrete guidelines for your external professionals to follow, but it will also highlight your expectations for each individual’s contribution. This can save you time by answering any anticipated questions from your hired experts and minimize mistakes by providing specific guidance through each phase of the project. A well-crafted project charter should include an overview of the project budget, including billing practices, Detailed duty and performance expectations, and concrete deadlines among other key communication protocols which should be set for the team.
Use project management tools to measure and track— Project management tools are getting more visibility nowadays because they are extremely effective at enhancing collaboration and streamlining software projects. They provide a platform where clients and software partners can communicate and share files with each other, keep track of various tasks, and stay on top of project deadlines.
Over-communicate – One of the greatest issues with using an outsourced team when developing custom applications is the lack of understanding between parties involved which in turn leads to delays and in some cases, unusable software. To forestall this, proper communication channels need to be created at the start of the project. The project score and deliverables should be clearly stated and explained. With both sides coming together and ensuring that the full requirements and scope are understood by all. Following this should be periodic scheduled updates on progress, issues, actionable, and others. As long as there is a steady flow of information between both parties, it becomes easier to track where the project is at any point in time.
Getting Started with Outsourcing Digital Transformation
While all of the above can seem daunting, we have curated a checklist below which you should ideally tick all the components off, before getting into a discussion with your outsourcing partner.
Are you clear about the task or project to be outsourced?
Do you have an outline, manual, or at the very least, clear instructions about the task or project to be outsourced?
Specific task/project description
Expected performance
Cost/budget of the project (is it billed by the hour or by the project?)
Clear deadline/due date
Skills required
Resources required
Who in your organization will be interfacing with and managing the outsource contractor or outsource firm?
If this is a task that is likely to be repeated over and over, can the initial outsource contractor prepare a step-by-step “manual” or outline of how to complete this task? Then you have a resource you can use again in the future, either as part of an operations manual or as a time-saving resource to pass on to another outsource contractor in the event your initial contractor does not work out.
Xamun: Outsourcing Digital Transformation Simplified
Understandably, outsourcing software development can have many significant advantages for your business. These include reduced costs, access to top talents, better risk management, and increased work efficiency. Moreover, it allows your company to focus on more important tasks and facilitates rapid business growth. Having said that, it doesn’t come without its fair share of challenges - scope creep, communication and cultural challenges often threaten to derail the project.
Often, success for outsourcing projects could often prove tricky and with a decade of working for clients all over the world, we have created Xamun to help you with your unique outsourcing requirements. Some of the most innovative digital transformation strategists complemented with a dedicated team of software developers ensure that you are covered for any requirements you potentially might have. Further our automated development platform ensures that you build the products 70% faster and 30% cheaper.
Reach out to one consultant HERE to understand how Xamun could help you simplify your outsourcing requirements and handhold you on a path to digital success.