Transferring IT services from one vendor to another is routine for many businesses, especially as technology advances. Various reasons may force a company to change its provider, such as the need for better service, cost savings, tech expertise, or improved scalability. However, this process can be stressful for unprepared business owners, requiring proper planning and execution.
Let’s say your business needs lead you to a critical moment: you notified the old vendor of the termination of cooperation and found a new IT service provider. Of course, you understand that you should organize the process of transferring information about the project and related tasks and technologies from one development team to another. It would help if you had a means of effectively controlling this procedure to avoid possible unpleasant situations in the future. This article will provide a step-by-step guide on successfully switching IT vendors, highlighting its ordinary risks and the importance of preparing a comprehensive knowledge transfer plan. Stay with us to know more.
In any case, whether the customer has had a positive or negative experience working with software developers before, they will have certain expectations for their new vendor. They will expect the latest vendor to be better organized and more efficient. If their previous experience was negative, they might be looking for a significant improvement in the quality of the work. On the other hand, if their prior experience was positive, they will expect at least the same level of well-established processes and timely communication.
A new vendor must understand the customer’s goals and needs to build a good and long-term relationship with the client. However, before taking responsibility for finalizing the project, the new vendor will want to diagnose its condition to understand the present state of affairs and prevent claims based on the mistakes of the previous team.
The following preliminary step to the conclusion of an agreement on the acceptance of the project by a new vendor is familiarity with the code. It’s important both for the developers, as they gain a direct understanding of the quality of the code, the relevance of the technologies used, and their compliance with business goals, and for the customer themselves.
Only after a preliminary review of the application code is it possible to have a substantive conversation about whether the new vendor is ready to take responsibility for the project, how long it will take to refactor bad code or write it from scratch, and when the vendor will be able to introduce project innovations required by the customer. Of course, in some cases, the developers may refuse to accept the project because of its unsatisfactory state, for which the potential customer has also to be prepared.
If this stage is completed successfully, the volumes and terms of refactoring are tentatively determined, and a cooperation agreement is concluded. Then client and new vendor create a transition plan and several related documents that regulate the technical and organizational issues of future joint work.
So, what is a knowledge transfer plan about? This document systematically transfers knowledge and expertise from one IT services provider to another. It is designed to ensure that the receiving party has the necessary possibilities to carry out a specific project or task, even after the departure of the original team. It’s used if a previous service provider has approved the product roadmap and done some job, but its revision is not expected. To read about why a product roadmap is created you may in our blog – Product Development Roadmap: how to create in 6 steps.
The plan typically outlines the specific knowledge, skills, and tools that need to be transferred, the individuals involved in the transfer, the timeline for the transfer, and the methods that will be used for the transfer. A well-designed knowledge transfer plan can mitigate the risks associated with changing IT vendors, ensuring the receiving party has the necessary information to continue the project without disruption.
In our practice, there were many cases when Academy Smart took over custom software development responsibility from other vendors, acting as an outsourcing contractor or completely reprojecting applications as a new lead developer. You can get acquainted with these examples in detail in our portfolio.
Academy Smart cases portfolio
The stakeholders creating a knowledge transfer plan can vary depending on the organization. Still, generally, it would include members from the current vendor, the new vendor, and the client’s team. These may consist of project managers, developers, business analysts, subject matter experts, and others who understand the project and its requirements.
Thus, the competent organization of the transition to another IT service provider significantly reduces the duration and cost of the change while maintaining essential resources and business continuity of the client. After all, vendor to vendor transition is such a standard procedure today that when interacting with an experienced IT service provider, it is fast, efficient, and very often profitable. Our company’s clients had the opportunity to see that in practice, the results of which are presented here.
When a company decides to switch IT vendors, it can be daunting, and the risks involved in such a transition can be significant. These risks may include data security and privacy concerns, compatibility issues with existing systems and software, loss of business continuity, and increased costs. It’s crucial for business management to carefully evaluate the threats and benefits of switching vendors and to have a solid knowledge transfer plan in place to prevent potential risks.
So, what potential and hidden trouble to business are possible in the event of a shift? Let’s look at them in detail below.
During the transition from vendor to vendor, there is a risk that some data might be lost. It is essential to have proper backup strategies in place to ensure data security during the switch.
Compatibility issues may arise if the new vendor’s technology stack is incompatible with the existing infrastructure or when the development process and workflow do not align with the business’s needs, potentially leading to delays, additional costs, and decreased productivity.
When switching to a new vendor, the latest development team may have a learning curve in understanding the project’s codebase, stack specificity, and the business’s needs. It can require additional employee training and lead to a temporary decrease in productivity.
The transition process can cause significant business disruption. It is essential to plan the changeover carefully, ensure minimal downtime, and minimize the impact on the business and its clients.
The contract between the business and the old vendor may have some restrictions that may limit the ability of the enterprise to change vendors. It is essential to have a legal team involved to review the contract before terminating the agreement.
Primary five risks of switching IT vendors
Let’s look at this algorithm closer.
Before beginning the transition process, it’s essential to review the current situation and analyze the reasons for wanting to change vendors. It helps to identify potential issues that need to be addressed during the planning and transition and can also help to get knowledge of the new vendor’s selection criteria.
Once you have reviewed the current situation and identified the reasons for wanting to change vendors, the next step is to select a new vendor. It involves evaluating potential vendors based on criteria such as their experience, expertise, and reputation and selecting the best suited to meet your specific needs.
With the new vendor selected, the next step is to develop a detailed transition plan. This plan should include a clear timeline, a list of all tasks and activities that need to be completed during the transition, and a list of all stakeholders involved in the process. The plan should also outline how communication will be managed during the transition.
Once the transition plan has been developed, informing all stakeholders about the change is important. It includes employees, customers, and other partners or third parties affected by the transition. Communication should be clear and transparent, emphasizing the transition’s benefits for all parties involved.
Once all stakeholders are informed, the next step is to transfer knowledge and assets from the old vendor to the new one. The knowledge transfer may involve sharing information about the project’s architecture, design, requirements, and testing processes. The new vendor will also need to become familiar with the project’s codebase and any third-party libraries or tools used in its development.
After assets have been transferred, the new vendor should test and verify that everything works as expected. It includes testing all functionality, ensuring data is appropriately migrated, and addressing any issues that arise during testing to continue development tasks efficiently.
Throughout the vendor to vendor transition process, it’s crucial to manage the process closely, monitoring progress against the transition plan and ensuring that all stakeholders are informed of any changes or issues that arise. It helps ensure that the transition is smooth and successful.
By following these steps, businesses can minimize associated risks and maximize the benefits of the provider’s change.
Vendor-to-vendor transfer algorithm
Documenting all decisions ensures a smooth transition and effective collaboration with a new development team. It is simple but precious advice that can optimize your working relationship with any IT vendor.
As the client, you should take the initiative to record all stages of communication and insist on receiving detailed technical documentation from your new service provider, including logs of meetings and correspondence. By doing so, you can be sure that your interests are identified and protected throughout the process.
To help you understand the importance of documentation in this process, we have outlined the most crucial documents and their practical purpose below. They include acceptance testing documentation, SLA drafting, and project specification. By familiarizing yourself with their content, you can ensure that your collaboration with the new development team will be aimed, effective and productive.
When transitioning from one software development vendor to another, it is crucial to ensure that the new vendor understands the product and any issues or challenges the previous vendor encountered. It is where acceptance testing documentation comes in.
During the preliminary stages of working with the client, a new development team will review the existing code and make a note of any bugs or outdated code that needs to be addressed. This documentation serves two purposes: first, it allows the team to develop a strategy for refactoring the code, and second, it helps to prevent potential conflicts with the client in the future by clarifying whether any issues are inherited from the previous vendor or are the result of the new team’s work.
Depending on the complexity of the application, the preliminary study of the program code can take anywhere from a week to a month. However, in some cases, the previous vendor may interfere with data transfer or sabotage the process. The client must anticipate this possibility and establish clear communication channels between all parties involved in the transition process.
Once the acceptance testing phase begins, it is vital to allow the new development team to focus on testing as much as possible. This phase often uncovers new business opportunities for the product that weren’t apparent to the previous vendor.
The Service Level Agreement (SLA) is another critical document for establishing practical cooperation between the client and the new vendor. This document serves as the basis for planning and paying the working time of the new development team, including the project manager, business analyst, developers, and testers, etc. The SLA outlines the client’s requirements regarding the amount of work to be done, the roles of each team member, and the response times for urgent tasks.
The SLA also allows the new vendor to align their processes with the client’s expectations and have some flexibility in the event of unforeseen circumstances. This stage is crucial for ensuring that all parties are on the same page and that there are no misunderstandings or disagreements about the scope of the work.
The Terms of Reference (TOR) is the final document in transitioning from one vendor to another. This document provides a complete description of all the technical subsystems of the application, scenarios for their use and testing, and error reports generation.
The TOR is a detailed statement of the requirements for the product, including its structure, functions, technology stack, and deployment infrastructure. It serves as the starting position for the new vendor and is a critical element of the software development process.
Choosing Academy Smart as a new IT vendor may bring several benefits to your business, such as higher cost-effectiveness, access to a broader range of outstaffing tech talent in the most demand areas, increased flexibility, and reduced workload for your in-house team. Our outsourcing IT services can also help enterprises to stay competitive by providing access to the latest technology and expertise, delivering high-quality custom software development from scratch.
Are you looking for a trustworthy partner to help you achieve your business goals through reliable technology solutions? Academy Smart understands that every business is unique, and we work closely with our clients to ensure that we fully understand their needs and objectives. We have a well-established methodology for quickly adapting to the specifics of new projects and a wealth of experience working with previous development teams. You may contact us today to discuss how we can help you take your software products to the next level.
A project transition plan typically includes a detailed overview of the project, its objectives and timelines, identification of key stakeholders and their roles, a thorough risk assessment, and a communication plan to ensure a smooth handover.
The time required for the knowledge transfer process can vary depending on factors such as the project’s complexity, the team’s size, and the transfer’s extent. However, completing the knowledge transfer process in a professional outstaffing agency usually takes several weeks.
