Technologies that were once a competitive advantage have become a precious commodity in business.
Even the smallest start-ups are now investing in e-commerce sites, mobile applications, and business software.
Due to the shortage of tech specialists, U.S.-based companies turn to IT service providers to help keep up with demand.
94% of IT companies report using 3rd-party service providers. Thanks to these strategic partnerships, tech companies report 10-30% reduced costs and 15% increased productivity.
Unfortunately, using IT project outsourcing and staff augmentation isn’t always a good experience for everyone. Some companies report losing time, money, and clients because of subpar IT service providers.
Those who report poorly choosing their service provider attribute it to a weak vetting process.
- What Common Characteristics Do Successful IT Service Providers Share?
- The Vetting Process
What Common Characteristics Do Successful IT Service Providers Share?
When business transparency is at the forefront of your vetting process, you’re much more likely to enjoy a beneficial working relationship with an IT service provider.
What Is Business Transparency? How Does It Apply to IT?
Business transparency is about making information visible to the client.
What kind of information should IT service providers openly share with you?
- Communication practices
- Taxes and costs
- Talent acquisition
- Talent qualifications
- Onboarding processes
- Training and retention programs
- Talent rotation
- Commitment to the environment and sustainability
- Talent assigned to other tasks while working on your project
- Monitoring, documentation, and reports
- Critical issues that can arise and change deadlines
Your IT service provider should meet with you regularly to review how the project is moving along; whether weekly, monthly, or quarterly. These meetings should be backed by supporting documentation and open dialogue about your SLAs.
Why Is Transparency Important?
When the IT service provider makes information visible to you, that openness creates trust.
Companies that make information accessible to their clients are more likely to uphold their commitments and maintain a positive reputation within the industry.
With accessible information and open communication, you can hold your remote team accountable and can be more involved in the decision-making process.
Studies demonstrate that a transparent development life cycle is more likely to meet functional requirements.
In other words, transparency builds collaboration, collective decision making, and strong business partnerships.
Common Problems Caused by a Lack of Transparency
IT service providers that communicate neither well nor often enough provide products that fall short of client expectations.
Businesses that have had a disappointing experience with IT service providers have made complaints about:
- Hidden costs
- Missed deadlines
- Lack of control
- Privacy concerns
- Lack of communication
- Cultural differences
- Lack of necessary skills
Interestingly, all these problem areas can be traced back to one overlying issue: a lack of transparency on behalf of the service provider.
These problems are not inherent to using a remote team, like many believe. The client can avoid these problems by implementing a thorough vetting process that prioritizes transparency.
The Vetting Process
With many options to choose from, how can you know who to trust?
Choosing an IT service provider is like choosing a business partner and therefore it isn’t a process to be taken lightly.
When narrowing down your options and booking discovery calls, it’s important to implement a strict vetting plan.
Before ever reaching out to an IT service provider there are a few things that you need to ask yourself as a business. Make sure you have these points clear:
- What’s your workflow?
- What’s the technology stack you’re looking to use?
- What are your objectives, or what are you trying to achieve by working with an IT project outsourcer?
- Are you ready to be actively involved with your IT service provider and communicate regularly?
- Are you willing to make an on-site visit?
Once you have these points clear, you can begin your search.
Whether the service provider has been recommended to you or not, it’s important to do your due diligence.
Ask to see their portfolio and case studies. Read their reviews and testimonials. Ask for client referrals that you can contact and talk to about their experience with the service provider in question.
Does the service provider have repeat clients and do they maintain long-term client partnerships?
Take Advantage of Discovery Calls to Ask About the Following:
It’s best to tackle these important issues during the discovery phase rather than after a contract is signed. Any IT service provider that is confident in their process will be happy to answer all your questions.
What’s their communication protocol with clients?
How frequently will you have review meetings throughout the development life cycle?
Because when you have all of the information, you can make informed decisions together
Ask about documentation: Do they use online project management tools for you to follow the progress of the project in real-time? Will risk reports be shared with you? Will you have direct access to the code?
Learn more about their track record: Have they had problems with meeting deadlines before?
Make sure you won’t get hit with hidden costs: How transparent is their billing process? Will you always know exactly what you are being billed for?
When outsourcing a project end-to-end, it’s easy to think, “They’ll take care of talent” so you focus little attention here during the discovery process.
But it’s crucial for you to know how a service provider finds, trains, and retains their talent. It can say a lot about them as a company and can impact the quality of the end product.
Can they talk you through their processes for talent acquisition, onboarding, training, and retention?
How do they measure performance? And what is their procedure in the case of poor performance?
Ethical and Sustainable Sourcing
Unfortunately, some companies maintain antiquated hiring/termination processes for outsourcing. They turn out products and throw out talent once the project is finished.
To avoid supporting a business that treats its employees as something disposable, talk to your service provider about company culture as well as their long-term plans for their specialists. Do they follow all legal procedures in regards to employee benefits and salaries?
Another important part of being a conscious consumer is promoting eco-responsible businesses. Is the provider committed to environmentally sustainable practices and reducing their carbon footprint?
Cultural or Geographical Obstacles
Ask about the language barrier. Does everyone involved speak the same language?
Inquire about the cultural differences that they’ve faced with previous clients and how that has impacted the product.
Ask about how they deal with time zone differences and how the time zone could interfere with communication.
Finding Balance: Is There Such a Thing as Too Much Transparency?
Even something as positive as transparency can have its negative side effects.
The Harvard Business Review, takes a look at studies on transparency vs. privacy in the workplace. The research found that too much transparency stifles creativity.
When being closely watched, employees feel the pressure of being on stage and behave the way they think they are expected to behave.
This self-consciousness makes them less likely to experiment with new ideas.
Researchers concluded that the best way to be transparent without limiting creative problem solving is to restrict the number of observers. They suggest an employee’s work process should be visible to only a very small audience.
A 3rd-party IT service provider is a valuable tool for any tech business or IT department to have in their tool kit.
Remote teams can provide much needed support when you’re struggling to fill IT talent gaps. They can also play an important role in business strategies like lowering costs, increasing productivity and spurring growth.
But you must be thorough in your vetting process to find the right fit.
An IT service provider that doesn’t value nor practice transparency can lead to frustration, lost time, wasted funds, unsatisfied clients, and missed deadlines.
Whereas a transparent service provider will build trust and increase your efficiency through regular communication, accessible documentation, and ethical talent sourcing.
Nativo is a remote development team that helps tech companies and small to mid-sized businesses with web and mobile projects.
We’re committed to transparent IT services and ethical talent sourcing. For more information about how to reduce costs, expand your business, and fill talent gaps without the recruitment hassle – make us a part of your vetting process. Contact us to book a discovery call.