An offshore software outsourcing should follow a disciplined, managerial approach from planning through negotiation and implementation, to ongoing management of the relationship. The first step in planning for a software development outsourcing is to evaluate a company's readiness for outsourcing based on various aspects. This article is focused on highlighting factors that could be considered while evaluating whether a company is ready to outsource or does it needs to realign its internal processes or mindset before it could begin outsourcing.
The outsourcing factors can broadly be divided into three sections: Outsourcing objectives, Process support and Cultural outlook

1. Outsourcing Objectives
First thing a company should assess is why is it they want to outsource their software development process. What is that they will like to achieve by following the offshore outsourcing approach. Here are the few questions that they could ask themselves:

1) Are we looking at reducing costs?
2)Do we want to reduce development duration by having round the clock development and increased team size in same budgets?
3) Are we having problems in finding right resources or specialized skills?
4) Will it help in lowering the cost of professional services like product implementation or enhancement costs for the end client?
5) Do we want to provide 24x7 support structures to our clients?
6)If the software development is outsourced, will it free up sufficient of management's time to allow them to focus more on company's core activities like product marketing or looking for growth avenues?
7)Will outsourcing help in releasing some of the key development resources from daily management or coding so that they can think more towards improving products or applications from customer point of view?

If most of the answers to the above questions are in yes, offshore outsourcing is something a company can actively consider. If the answer is in positive for only 1 or 2 questions above, the company should objectively weigh the gains it will realize by outsourcing its software development activities. If all the above questions result in a negative answer, the company is probably doing perfectly fine with in house development and looks like there is no reason to look out for outsourcing its software development needs.

2. Process Support
Once a company has evaluated that yes, software outsourcing does make sense for them and they will get lot of benefits, it's time to assess whether the company is ready for outsourcing or not from process stand point. Does its existing process support successful software outsourcing or will they hamper it? If the organization focus just on products/application specifications and completely outsource other parts of SDLC, it may skip these questions. For others, the questions below could help in objectively evaluating their process readiness.

1) Do we have a development environment which helps in real time project management, content sharing between the team and support distributed development?
2) Do we follow processes for our software development as recommended by SEI-CMM or other such organizations?
3) Do we have formal processes laid out for each step of software development life cycle like requirement analysis, designing, implementation or quality assurance? Do the associated groups with these activities have clearly laid out responsibilities?
4) Have we separated QA completely from the development team?
5) Do we get a formal sign-off by QA group with respect to planned features and stability of the application before the product or application is released to the end customer?
6) Do we have formal templates or documentation for various activities like requirement analysis, technical specifications, test case planning, coding standards etc?
7) With our current in house processes, are we able to achieve majority of our deadlines and budget for various releases of products or applications?

Documented and well planned processes are the most important part for any successful outsourcing. If you know what you are doing, then only expect others to do it for you. If answers are yes to most of the questions above, well, there is no need for the company to wait. It can just go ahead, find the right partner and start leveraging the benefits of outsourcing. If the company thinks that they are ok with most of the questions above except may be few, the company can proactively focus on the loose points internally or specifically co-ordinate on the loose points with its offshore partner to set them right from the word go. Well, if most of the answers are in negative, suggestion will be to first get a consultant to set its internal processes right so that it may successfully leverage outsourcing benefits for longer periods.

3. Management Outlook
One of the most important factors to evaluate before offshore outsourcing is that is the company culturally aligned for offshore outsourcing? Does the management have an outlook that supports successful outsourcing? Does it have a mindset which will help rather than inhibit in successfully running offshore outsourcing engagement? The questions below should help in assessing the same.

1) Is company open to changes and take risks if the potential payoffs are substantial?
2) Does the management have experience of outsourcing any of core or support activities before?
3) Are the key stakeholders or investors in the company open to outsourcing?
4) Is company's software engineering department centralized?
5) Has it tried offshore outsourcing before?
6) Does company perceive things like communication, intellectual rights protections, knowledge transfer to be low risk areas when offshore outsourcing and you think you can manage it?

Answers to above questions should definitely help a company to evaluate itself to see if it is culturally aligned to outsource and have the right support from the management. If not, maybe it's time for the management to objectively evaluate the benefits and be totally convinced if outsourcing makes sense for the company. Half hearted effort might not lead to the expected results, so better have everybody fully aligned towards the step company is about to take.