Welcome back to our engaging articles exploring the vast landscape of software development outsourcing. In our previous piece, we ventured into risk mitigation in outsourcing. We unlocked the importance of due diligence, communication, defining requirements, and the crucial role of metrics, quality assurance, and dispute resolution.
Today, we are excited to elevate your outsourcing knowledge to a new level with our second article - "Strategic Partnerships as a Method for Successful IT Outsourcing". As the outsourcing landscape evolves, we see a shift from direct client-vendor relationships towards more mutually beneficial, strategic partnerships.
In this piece, we invite you to journey with us through the intricate paths of forging strategic partnerships in IT outsourcing. We will unveil the compelling benefits these partnerships offer. All provide you with a pragmatic guide to building one.
Whether you're a startup seeking to leapfrog the competition, an established business aiming to enhance your technical capabilities, or an entrepreneur ready to turn a visionary idea into reality, this article will provide the tools to understand, initiate, and nurture a strategic partnership in IT outsourcing.
Strap in and join us as we demystify the concept of strategic partnerships, exploring how they can bolster your outsourcing success and, ultimately, your business growth.
Strategic partnership meaning
So, first of all, let’s define what strategic partnership means. In my opinion, it is a long-term business relationship in which both companies work together, side by side, to achieve mutual goals that will benefit both parties.
If you treat your vendor like a partner, you create a win-win situation because the vendor will benefit from this collaboration as he will gain a long-term client. At the same time, the company gets access to specialized skills and resources much easier than in the case of in-house hiring or regular business cooperation.
It all seems pretty good, but it’s not as easy as signing a contract and starting the work. Building a strategic partnership requires building and maintaining trust, aligning and being transparent with goals, and creating a collaborative communication culture. When you achieve those, the vendor will be much more committed to the success of your project and will be much more willing to invest his time and effort to achieve your shared aspirations.
So now that we understand better the meaning of the term “”, let’s look at the main benefits you will gain from creating one.
As you may know from our previous article (Scaling Tech Teams with Outsourcing - Mistakes and Best Practices), good communication is essential for success in any business venture (in private life as well, but that’s a topic for another paper on another blog).
When you manage to build a good partnership, communication will improve drastically. You will benefit from openness, transparency, and speed.
Naturally, having regular check-ins, status reports, and face-to-face meetings will be necessary, but they are already vital for your internal team, so just extend them a bit.
When both companies work as partners, they begin to share the same goals and have the same interest in the project being a successful one. This usually creates a situation where the vendor's purposes are similar to the client's, which you should look up to!
Access to Specialized Skills
Thanks to building a partnership, you will quickly gain easier access to specialized skills - which is pretty necessary. The vendor may also do whatever is required to acquire new talent to fit your needs, as it is in their best interest.
The result is simple - better quality, shorter time-to-market, and achieving your business goals much better than an ordinary relationship.
Quality assurance and control are more aligned between you when working side by side. The vendor will pay much more attention to ensuring that whatever they do matches your expectations or, in some cases, will implement their quality control in your company if they see it will bring you closer and faster to your goal.
This is an important one. When being a simple vendor, the incentive to be very flexible is not really high. Usually, the vendor will not gain much by following some last-minute changes, additions, or suggestions. But the situation changes when they are your partner.
In this case, the vendor will be willing to be highly flexible in terms of team size, team composition, or finding replacements whenever a team member leaves the company.
That is simply because they have a good interest in behaving that way. And we all know how fast the business needs change and the software ones as well. Making the vendor your partner means you no longer need to worry about this.
Last by not least - your strategic partner will be willing and motivated to suggest innovations to your company and processes if they see this will influence the cooperation well.
Vendors often have vast experience but are sometimes discouraged from suggesting anything because they are treated simply as another company to do a simple job.
How to build a strategic partnership?
Most of you (at this point) may want to develop or transform your vendor relationship into a better one. In this chapter, we will give you some simple practices that will allow you to do so.
As with any cooperation, you have to begin by finding the right partner.
You may be surprised, but not all vendors understand this concept, so you need to find one with a track record of such corporations or be willing to try that for the first time.
In my experience, look for a smaller company rather than a corporation because, in such cases, you will have direct contact with C-levels that (in my opinion) are essential to building a partnership.
Of course, you need to verify skills, experience, and reputation, but we’ve covered that in another article, so I will not dwell on that much here.
As communication is one of the benefits of building a partnership, it seems obvious that you need to focus on this part of cooperation.
To gain a trusted partner, you need to be transparent and honest. At the same time, you should spend extra time (together with the vendor) to build communication protocols, guidelines, and best practices.
Including your partner-to-be in company events, such as hands-on meetings or company retreats, is very important. This brings the relationship to another level.
To gain and benefit from trust–based relationships, you must define clear expectations from your partner (and it goes both ways, you must also learn what theirs are).
So, define the scope of work, quality standards, timeline expectations, and other important things. Do not omit anything - it will only fuel disappointment. A good rule is to put everything in writing and even name it - partnership expectations.
Such documents must be revised regularly, and each party should feel free to communicate whenever those expectations are unmet.
A strategic partnership is a different type of relationship. It’s not usually sufficient to simply work on the same goal. You also need to get to know each other on a private note. It’s of vital importance to meet each other face to face regularly, even if you are on different continents.
It should go both ways - in the same way, your partner should know your headquarters; you should also visit him and meet the team in person. A great way to improve the relationship is to do some training or courses together - not only will they grow knowledge but also be a way of team-building.
Work & improve & repeat
As mentioned above - a strategic relationship is about honest communication and improvements. Merely discussing problems honestly won't benefit anyone. To make progress, it's important to discuss possible improvements as well regularly.
At the same time, it’s good to revise the expectations and discuss what went wrong and what went well. Give yourselves a round of applause when it’s due. And learn from each other's mistakes rather than dwell on them.
Strategic partnerships in software development outsourcing are a great way of achieving success, but it’s also a lot of hard work. I believe treating your vendor as a partner will pay off in the long run and sometimes even make you decide to join forces as one big company.
If you’re looking for a company you can build such a relationship with, at Sunscrapers, we are always happy to talk, as this type of cooperation is our role model and something we’ve done many times. We are always willing to go the extra mile to build one.