How to minimize risks with an external IT project department and a regular SLA

Finding experienced and qualified software developers is one of the most difficult problems that small, medium, and large companies face.

The task becomes more difficult when you need to find not only one or two developers or testers, but to hire a whole software development department that includes all the necessary specialists. It is good when you can “marshal” a whole team, whose members already know each other well and have successfully worked together on a number of projects. But this happens very rarely. And, of course, the search for the head of a development department is a special story.

There are no highly professional and competent CIOs with expertise in product development who are in “free flight” in the market, especially if we are talking about those who have already reached certain heights and are looking for a place with new, interesting and previously unexplored tasks. Even if you manage to attract such an executive, he needs time to build his team of specialists, or work together and tune in to the same wave with existing employees and get into the specifics of the business. In short, the task is not an easy one. But what if the project must be implemented on a tight deadline, and the result was needed literally “yesterday”?

In this case, it is possible to involve an outsourcing contractor. IT outsourcing services appeared on the market a few decades ago. The principle “give away everything that is not your core business” is successfully applied to this day. At the same time, the classical IT-outsourcing entails a whole train of possible risks, such as the low competence of the contractor’s employees, the lack of experience of the customer with the IT-outsourcer as well as the complexity of the management of the tasks performed. A step-by-step control is especially important, making it possible to make timely corrections to the project, steer it in the right direction, set the right priorities for all tasks, etc.

Long construction time in IT is, unfortunately, a common phenomenon, but it is too expensive for both parties. Therefore, today flexible project management methodologies are increasingly being used in various industries, but in this case it is important that they are just as effective in IT contractor, and the customer could take an active part in it, including stage-by-stage control and monitoring.

For example, the work can be organized so that every two weeks the client receives already working functionality for use in their current activities. It is important that during these periods he has the ability to adjust the requirements for changes in the business, which then will be reflected in the software. Moreover, if the work is properly structured, the customer can adjust the timing of stages, temporarily suspending the project. The prerequisite of success here is the research of target audiences, business models, and product values, which IT department of the customer often cannot do alone.

Service level agreement (SLA) serves as a guarantee of relationship between the client and IT partner, which accompanies the majority of service agreements, project implementation agreements, etc. As a rule, SLA regulates the parameters of qualitative realization of a project in its final point, i.e. what a customer should get as a result. This was the case before the pandemic, but now the world is changing rapidly. Remote work, cross-border teams, increasing staff turnover, the widespread use of agile project management methodologies (Agile, Scrum, Kanban), and the reduction of time to complete tasks are gradually changing the approach to SLA. We are talking about the fact that the SLA should regulate not only the final or intermediate stages of the project, but also the regular steps of its implementation. For example, it can be a certain period of time during which a predetermined list of tasks should be performed, for each of which a responsible person (task manager), one or more executors, as well as observers are assigned. Thus, all work on the project is divided into micro-stages (sprints); each of them takes five working days. At the end of this period is “Demo”, where the result is presented, and the customer accepts the work. This evaluates not only the fact that the task is performed, but also the compliance of the work done to the service level agreement. At the same time, every week there is planning, within the framework of which the time costs and specific tasks for the next sprint are defined. In the end, the customer and the contractor organize a reliable communication channel. In fact, for the client, such communication looks the same as if he were interacting with his own in-house specialists, who are in another office and, if necessary, come for face-to-face meetings.