How To Choose The Right IT Outsourcing Vendor?

All buying decisions go through an evaluation phase in which you weigh your options and decide which is best for you. So does IT vendor selection. In major cases, it is quite difficult to purchase IT services. They are more diverse in characters, prices, qualities, etc. You need a certain procedure for conducting the comparison in order to obtain your business goals. In this article, GCT Solution will provide you with a comprehensive IT vendor selection process containing 6 steps that may help you in choosing your IT partner.

6 Steps In The Right IT Vendor Selection Process

1. Examine your project specifications

2. Research IT outsourcing vendors

3. Shortlist IT outsourcing vendors

3. Schedule discussions with shortlisted IT outsourcing vendors

4. Choose the suitable outsourcing model

6. Contract to IT outsourcing partner

Step 1. Examine Your Project Specifications

To better understand your project needs, here are a few steps GCT Solution suggests:

• Define the project types: Is your project a MVP with a few core features, or a complex system?
• Evaluate the project scope: What are your project goals, deliverables, features, functions, and tasks? At this stage, you may not have a clear idea of the product. You should decide on those details that you expect from your product.
• Estimate the project budget: Do you have a range of budgets?Small projects with predictable requirements are easy to calculate budget. However, a large project can require modifications in the process of development, making it difficult to estimate budget in advance. In this case, you may need to reevaluate the budget after a certain time or each sprint.
• Decide the time to go to the market: Do you need to release the product early? Or are you fine with spending more time on developing and fixing the product?
• Set deadlines: Which date do you want your product to be released? Is it 6, 12, or 18 months from now?
• Choose a software development methodology: You will decide which framework to use: Waterfall, Agile, Scrum, Kanban or any other? You can read more about popular software development frameworks suggested by GCT Solutions.

All aforementioned steps would later define what kinds of service that you will hire the IT outsourcing vendor.

Step 2. Research IT Outsourcing Vendors

Once all your business requirements, or project specifications, are listed and analyzed thoroughly, you can start to research by listing all the IT companies that can provide the required services, or in the desired locations. Almost all IT companies nowadays provide end-to-end services, but you can hire separate services, such as UI/UX design or coding.

Step 3. Shortlist IT Outsourcing Vendors

After having a list of IT outsourcing vendors, you set certain criteria to choose the suitable ones. These criteria vary among businesses, as each of them have their own needs and wants. GCT Solution suggests some popular criteria for IT vendor selection used by our clients.

• Portfolio
• Years of experience
• Range of services
• Locations
• Pricing

You should read more about criteria to choose the right IT outsourcing vendor.

Step 4. Schedule Discussions With Shortlisted IT Outsourcing Vendors

After shortlisting IT outsourcing vendors via certain criteria, the only way to know about them better for an informed outsourcing decision is to set up a meeting, maybe an e-meeting.

In the discussion, remember to focus on these points:

• Communication: Does the vendor try to understand the core objectives/ requirements/ problems of your project? Do they ask technical questions besides questions about budget and cooperation?
• Service models suggestion: Does that vendor offer suitable service models or attempt to put you into one option? Do they explain the differences among different models?
• Risk proposals: Does the vendor acknowledge the potential risks and offer any solutions? Do they suggest any internal improvements?

Step 5. Choose The Suitable Outsourcing Model

After evaluating your project, you should now choose the software development model that will work the best for your team and your business. The IT outsourcing contracts, which cover conditions of collaboration, project dates, pricing policy, and other rules, will be shaped by this stage.

The following are some of the most well-liked engagement models in software outsourcing:

• Fixed-price structure
• Time & materials contract (T&M)
• Dedicated team model
• Outstaffing

You should read more about these IT outsourcing models.

Step 6. Contract To IT Outsourcing Partner

The contract draft is the final crucial step after choosing the IT outsourcing vendor. To avoid possible conflicts, the contract negotiation must be thoroughly discussed and arranged. It is important to carefully consider all of the potential risks and liabilities before signing the contracts. You should include an article of amendment, mentioning that a new term can be included or adjusted in the contract if all parties agree.

Here are 10 things you must focus on in your IT outsourcing agreement suggested by GCT Solutions, an IT outsourcing partner in Vietnam.

Final thought

Hopefully, the IT vendor selection process steps suggested by GCT Solution have shedded light on your way to find the most suitable IT outsourcing partner. IT vendor selection may require a lot of money, time and effort, but the benefits your IT partner brings to your business is extremely remarkable.

GCT Solutions works with businesses to implement AI solutions and build modern digital platforms that create measurable operational impact. Our capabilities across AI Services, AI Consulting, Platform Modernization and Software Engineering help organizations scale technology more effectively and accelerate digital transformation initiatives.