Selling Management On Software Development Outsourcing

If you are in IT management and you are charged with finding the best way to get your software development workload done, sometimes taking some of that work outside the company is a necessity. You know what a challenge it can be to get authorization to hire more programmers, systems analysts or project leaders. Then even if you get the funding, finding qualified personnel who will make good developers as well as good employees is pretty tough too.

Sometimes it seems that upper management expects you to work miracles with the limited budget that you have. So if it is clear the best way for you to accomplish the goals management has laid out for you is through outsourcing, you need a strategy for how you are going to go in front of the executive management of the company with this proposal and how to get approval for you to begin to use a top flight software development contractor or consulting company to outsource the work to.

In order to show upper management that you cannot accomplish the ambitious goals they have for IT using existing resources, you have to value the work your current staff does. To do this, use the valuation system you might use to estimate a quote from the contractor you have in mind. So if the contractor is going to do a project for $100 an hour, use that figure to evaluate the work your staff people do. In order to justify using existing staff or expanding staff, the cost must be less than the cost of outsourcing.

Many times staff IT personnel are kept busy with ongoing maintenance and support. So take a few weeks before building your proposal and have everyone on the staff who would be considered “software development” caliber to log their work. With those values in hand, you can go to management and demonstrate with solid numbers that can be graphed how your current staff is utilized and make a case for the fact that to use employees to work on a new software development project would call for expanding the staff.

A very good justification for building a relationship with reliable and technically competent contractors is to approach it from the angle of keeping staff size at the current level. This can be especially effective if your staff size is low due to law offs or retirements and you would have to “staff up” anyway. By presenting the case for outsourcing software development and perhaps even maintenance and operations functions, you can show the executive management team that this keeps human resource costs low which looks good on the annual report.

Moreover, by using contractors to perform development work, you can quickly drop that cost when the work is done without damaging your relationship with the contractor or the outsourcing company and you do not increase costs for benefits, desk space and insurance and retirement that has to be set aside to sustain a staff position. Because contractors often work off site, office overhead is reduced and absorbed into their total fee. And that fee can be directly associated with each project they directly work on which makes cost accounting so much simpler than is possible using staff developers.

You may see some real “ah ha” moments on the faces of upper management when you start to step through the value of outsourcing project level software development to keep current staff focused on mission critical functions and to control development costs. And if that “ah ha” moment turns into an approval to go forward with your outsourcing plan, then you did a good job of demonstrating that outsourcing has a real place in your long term development growth strategy.