Advantages of getting a vendor to take on a variety of tech roles outweigh the cons, according to Zafar Sawant.

In an INMA Product and Tech blog this week, he argues that outsourcing tech instead of hiring in-house, may seem an evasive approach. “One may even be uncertain about what roles to retain and which ones to commission,” he says. “It’s important to consider a holistic perspective on the subject.”

But the Delhi-based HT Labs product head says that given the right choice of tech partner, outsourcing can also be a cost-effective solution.

“You save on the time and hassle of hiring, and can even pull off a product launch sooner than you would if an in-house team was assembled.

“The vendor with the right resources can get cracking from day one. Since their deliverables and timelines are clearly defined, it helps a product team meet its launch deadline with fewer compromises.”

Having a tech vendor can also be ideal if you’re testing waters: “One can easily reallocate or offload resources if the product ends up being a misfit for the market, without having to plan for retrenchments.

And he says “digital mavericks” can extend undivided focus in building leadership teams across marketing, sales, product and content. “The tech vendor takes care of the development.”

Before you take the plunge, identifying the correct vendor may require due diligence and a background check, Sawant says. Have they got sufficient and relevant resources; have they worked in your industry or have the required domain experts; have they managed to pull off projects of the same scale, and how long did it take them; and is the cost-per-resource justified?

“Despite all the checks and balances, there are chances a vendor may not deliver as efficiently or effectively as you had imagined or even chalked out in the agreement,” he says. “But uncertainties aside, one can always prepare for the worst and pencil a contingency plan into the vendor contract, which makes them accountable (if not liable) if the project is not delivered within the timelines promised or doesn’t meet the pre-defined performance standards.

Swant suggests most development can be outsourced, with the exception of core modules, “which should ideally be built in-house”.

This is only because a company’s proprietary tech or intellectual capital may often give it that competitive edge; outsourcing these to an external party could be risky, as vendors may be servicing multiple clients.

In the case of OTTplay, a meta recommendation engine for movies and shows, the core of the business was around building the recommendation engine that suggests movies and shows based on a user’s unique preferences. But apart from that, every other feature and functionality — from crawling streaming platforms to building deep-linking tech that allows users a one-click transfer to the streaming platform where a movie or show is available — was accomplished externally.

Some factors to be considered include:

-capping the number of vendors – “too many cooks can spoil the broth. But, more importantly, tracking multiple vendors can be tedious and time consuming;

-getting quotes for the fixed-cost model and to get a sense of timelines. When the scope is frozen, it is better to get a fixed-cost model to get more accurate effort estimations from the developer;

-the technical architect’s role is key. This critical internal resource will be your evangelist in directing and driving your tech vendor to deliver;

-the quality assurance team should not be outsourced to the same vendor, as they may let bugs slide and could cause unnecessary delays and embarrassing glitches;

-if a vendor has promised a certain project to be delivered within a period of time but doesn’t follow through, there should be a contingency plan pencilled into the vendor contract;

-interview developers allocated by the vendor before they are onboarded onto the project to get a fair idea about their knowledge of fundamentals and their ability to execute a certain project;

-agree on a clear escalation matrix. A project manager should be the single point of contact, but if things don’t go as planned, you should be able to escalate issues that need a quick fix;

-it’s also good to decide early on how long you plan to engage with a tech partner and when you plan to hire an internal tech team. This will enable you to move engineering in-house in a seamless fashion and plan your hires accordingly.