I don't think that anyone can dispute the fact that cost reduction which can eventually lead to bigger profits is the major most common reason why many companies in the developed world outsource part of their projects overseas with China as the leading destination.  However, there are several factors that will need to be considered in order to determine which projects are best outsourced. The two primary factors are the difficulty of the task, and the actual scope of the task.

Factors That Determine Projects To Be Outsourced

1. Difficulty Of The Project

When it comes to determining the difficulty of a project, many companies simply look to the nature of the competitors which they can see within the market place. While it is important to consider the nature of the competition within the market place, it is often much more difficult to determine the actual difficulty of a project. Many new businesses are started simply due to the difficulty of a particular project. It is for this reason that it is imperative to consider the actual scope of the project as well.

2. Scope Of The Project

The actual scope of a project will reflect the size of business you are hoping to start. For example, if you are hoping to start a service business, you will likely find that the size of the project will be significantly smaller than if you are hoping to start a large accounting practice. One factor that is crucial to consider when deciding the actual scope of a project is the actual time it will take to complete a project. Many companies underestimate the time it takes to complete a project and this is why it is important to determine the actual time it will take.

It is important to determine whether or not you can achieve your project with a team of one or with a team of one plus an outside consultant. Often times, companies only consider the task with a team of one because it looks like a small company, and therefore it is easier to do with one. However, in many cases, a team of one plus an outside consultant will actually take longer due to the fact that they will need to be briefed on every step of the way. Again, if you do not account for a team of one, you will end up spending more money because you will need one person to handle the entire project. This will ultimately impact the return you get from the contract, thus impacting the value you are trying to obtain from the contract.

This part has nothing to do with this article here but it is still part of my blog: Other 5 Misunderstandings.

3. How Will The Project Be Billed?

It is vital that you determine the price of your project before you agree to do the project. Many companies use a formula in order to determine the price of your project. However, this is usually inaccurate because it is based on something that may no longer be accurate. It is often more accurate to determine the price of your project by looking at similar projects in order to determine your price. By doing this, you will be able to determine how the market will change once you start doing business. It is important that you take into account the downturns in the economy because these factors will affect the project’s completion time. If you price your project too high, you run the risk of losing the bid. However, if you price your project too low, you will run the risk of not receiving the bid.

4. How Will The Project Be Funded?

It is crucial that you determine how you will fund your project before you commit your business resources to it. Because of the many factors that will affect the project's completion time, it is important that you price your project so that you have enough funds to complete the project before your business is adversely affected by the slow economy. You need to price your project such that you receive all the bids that are sent to you. You also need to price your project such that you meet all the requirements of the contract before the deadline. These are one of the factors that reflect leadership qualities especially if you have to outsource part or all your projects.

5. How Will You Keep Score?

It is essential that you keep score of the number of bids that you receive before the deadline. This is so that you will know how many hours you have to allocate towards completing the project. You need to use the scores to make decisions on which bid to accept. In this way, you will ensure that your project is completed within the time requirement.

Pricing your project correctly is essential for any business that does business online. It is a good idea to discuss your project with an accountant and/or lawyer to make sure that you price your project correctly. This will ensure that you raise your capital with enough time to allow your business to receive enough bids to keep your business afloat during the economic downturn.