The Significance of Knowledge Transfer in It Outsourcing

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According to this Deloitte report, 72 percent of companies globally outsource some part of their IT functions. Cost, enabling core business functions, solving capacity issues, and enhancing service quality are key drivers to outsourcing.

When used correctly, IT Outsourcing can help businesses drive digital transformation, innovation, and improve business results.

However, what stops businesses from reaping the benefits is the fear surrounding project failure, which mostly stems from poor communication with the in-house and outsourced development teams. It could be that your business outsourced an IT project to a part of the world where the time zone, language, and customs are different. It could also be that your external provider has a different work setup.

Either way, there will always be barriers, and your project team can address these obstacles with effective communication and knowledge transfer.

Why Is Knowledge Transfer Crucial?

Data is a vital asset to every business, but it’s the knowledge of how to use that data that allows companies to create unique products and services. Developing a strategy to facilitate knowledge transfer and retention, empowers your employees and improves your bottom line.

Sharing these insights within the organisation – from one department or project to another, or from the in-house teams to the external service providers – can be a challenge.

We all rightly know that poor communication leads to losses. Panopto and YouGov actually put a dollar value on inefficient knowledge sharing and found that on average, it costs large businesses $47 million each year. Hefty, right?

How Poor Knowledge Transfer Affects It Outsourcing

Let this story work as a cautionary tale.

Our team at Scalo once participated in a complex, international project aimed at creating an online sales system. To our surprise, during the kick-off meeting, we received documentation from the client which was completed beforehand, specifying the entire project logic, user paths, tasks, and potential changes.

All participants – from designers to devs, and testers – were to complete and pass on their tasks without further interaction. There were no opportunities for discussion, apart from the weekly slots with the client’s PM. Concerned deadlines were never attended by the business PO or their representatives.

The only time the business attended a meeting was at the final product demo, where they concluded that they were not satisfied. As a result, the product optimisation took an extra five months, which generated additional costs, and significantly deferred its market validation and release.

Improve Knowledge Sharing in a Methodical Way

The above story is a typical case why the waterfall model in IT projects should give place to Scrum. Scrum asserts that knowledge comes from experience. All its tenets – the events, artifacts, and rules – are structured to engage all parties regularly. It ensures a steady flow of information required to complete even the most complex projects.

Take for instance The Daily Scrum, a 15-minute time slotted event for Development Teams to help identify project impediments, highlight key issues, and improve the overall level of knowledge.

Or Sprint Reviews, a platform of regular communication between the devs, PO, and key stakeholders. The Sprint Review allows not only the inspection of what’s been done, but also plans the backlog for the next sprint.

When used in combination with a hybrid IT outsourcing model, Scrum can indeed bear outstanding results. By having a member of the external development team on your premises, you get the best of both worlds – the quality and cost-efficiency of IT outsourcing, as well as the stability and close cooperation usually associated with in-house development. With every sprint, you can observe how the line between your internal and external teams gets increasingly blurred as your engineers work hand-in-hand on achieving the Sprint Goal.

Tools That Facilitate Better Communication in It Outsourcing

The three pillars of Scrum – transparency, inspection, and adaptation – further facilitate knowledge sharing and build trust within Scrum Teams.

Here are some tools that support efficient communication between the Product Owner and the Development Team:

Project Management tool – such as JIRA, or other viable alternatives.

Instant messaging app – think Slack, or its open-source versions, such as RocketChat or Mattermost, which are used to get in touch with development teams quickly, where you can ask questions, or to double-check something.

Timesheets – for a better overview of the time needed to develop each feature.

Project workspace – a space where key project documentation, meeting notes, and relevant data can be found by all parties actively involved in the project. Think of a solution like Confluence, SharePoint, or similar.

Daniel Terek Scalo

Daniel Terek
Business Development Manager
 Daniel Terek is an Account & New Business Manager at Scalo. He supports companies’ grow their business by understanding their problems and connecting them to the right engineers for their project. He is here to support your development

: Drop us a line and let’s talk about how hybrid IT outsourcing can ensure better communication and knowledge sharing in your IT project.

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