Communication Strategy in Outsourcing Projects

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Many companies are deciding on outsourcing software development projects to the near- or offshore companies. To achieve expected results it is highly important to define your needs and keep up-to-date with the progress of the project. Therefore, the crucial element in successful outcomes is effective communication between the client and the vendor.

The growing importance of the outsourcing software projects

What is more, companies spending on IT outsourcing services are rapidly growing every year. In the years 2016-2019, the CAGR (compound annual growth rate) value for the ITO was 4.7% and in the upcoming years, it is forecasted to grow up to 5.1% by 2023. The growing popularity of choosing the software development outsourcing strategy is due to many positive effects resulting from the implementation of this approach. The key drivers are costs reduction, exponential technologies, improving productivity, as well as gaining the strategic and competitive advantages.

Reasons that may have an impact on effective business communication in outsourcing projects

As a highly dynamic and crucial component of a business strategy, selecting the best service provider to outsource software development operations bears substantial influence on successful outcomes. Nevertheless, completing the project and reaching the advantages is not possible when the relationship between the client and the vendor is not stable. Recent studies show that the main reasons that lead to the failure of the outsourcing projects are lack of communication and effective project coordination. There are 5 barriers to effective communication that occur the most often:

• Deferred replies
• Deficiency of casual correspondence that is occasional and controlled
• Non-recorded promises that are done amid videoconferencing or telephone conversation
• Time zone
• Cultural differences

Examples of good communication affecting a work relationship

To establish effective communication the efforts should focus on involving the project development team, stakeholders, and end-users in order to achieve a greater understanding of needs. In addition, consider assessing project progress through the use of collaborative tools and graphics, which can reduce cultural and linguistic distances and bring project participants closer to the customer and supplier.

• Maximizing the presence of the stakeholders or/and end-users in the development team meetings to achieve greater compliance with the requirements, provide feedback, and resolve uncertainties in the project assumptions.
• Holding at least one official meeting per week between stakeholders and the development team to resolve issues, verify progress, meet objectives, as well as agreements reached from previous sessions and respond to concerns.
• Exchanging the messages that are concrete, coherent, complete, clear, and concise, whatever the means of communication is used.
• Visualizing the workflow is one of the best options and ways to maintain effective communication. Therefore, it is recommended to use Kanban management so that both companies can visually observe which tasks are prepared, in progress, in the process of testing, or fully completed.
• Using teamwork tools for communication between organizations (chats and joint emails), knowledge management (wikis, note management, photo management, a joint editable publication of documents and presentations), and project management (calendar control, monitoring of meetings, events, milestones control, overdue tasks, responsibility, and work distribution tools).

Implementing those five steps in your outsourcing strategy may be very helpful in establishing a stable and prosperous relationship with your vendor. It will lead to successful cooperation and satisfactional outcomes of the software development project.

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