In the cutthroat world of competitive forces, each company wants to lower its operational expenses. Same principle applies to when it comes to outsourcing your IT work to an offshore vendor. In this single-minded pursuit of minimum expenses, other important factors get ignored and result into either underachieved results or budget overshooting the initial plans.

What are some of the important factors a client must look into before and while engaging with an offshore software development company?

1. Develop a Relationship: It is critical that the client also invests its time and resources to build a relationship with the offshore software development company. In the world, where a service provider may be working with multiple clients, it is important to understand that even the service provide would have its priorities. Given that the service provider is extending your organization, it is important to provide them an overview of the relevant factors like business culture, marketplace and products/services. Investing in a long-term relationship, by sharing their business vision, clients can go a long way to bring in the service provider in its ecosystem.

2. Think Big, Act Small: Outsourcing a function (e.g. IT) of company must be planned on a bigger scale but executed in small and incremental phases. It is important to start small with something like a pilot project, where a broad framework can be achieved with the service provider. Once a broad framework is established, client can engage with the service provider to go for incremental phases. A roadmap kind of exercise, which outlines the small incremental phases, is an important tool to achieve a continuous value delivery channel.

3. Continuous Improvement: Improvement should be a continuous activity rather than based on milestones (e.g. end of phase 1). Be making sure that the broad framework with the offshore software development company entails the basic principle of continuous improvement; a client can reap benefits which are not visible at the start of the engagement besides achieving the overall goal and objectives from the outsourced software development work.

4. Look out for signals: Results are not delivered overnight. It takes time and efforts to deliver solid results. If the delivery plan does not show regular deliverables, project is bound to fail. If the deliverables are not converging to closure after 2-3 iterations (for small to mid size projects), there are serious issues at many levels such as wrong expectations, no framework of reference. If there are some deliverables (e.g. fluffy benchmarks without any tangible benefits), which gives rise to questions like "so what", there is a warning that the resources are being invested in unproductive areas.