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( votes)Software outsourcing in more general terms refers to contracting the responsibility of developing software to a software development company. It is a practice of choosing a third-party service provider of software development solutions that is capable of managing all the tasks involved in a software development project. According to Statista, the global market size of outsourced services is a whopping 92.5 billion USD.
Outsourcing the Software development allows entrepreneurs to allocate their in-house assets to tasks that generate the highest value but also prevents them from utilizing heaps of valuable resources by starting from scratch. Moreover, it enables companies to complement their employees’ existing talents for significantly less than it would cost to train them.
Risks of software development outsourcing and their solutions
Hiring experienced software development professionals with extensive technical knowledge is both a time and cost-effective method of getting your work done. In addition, these other benefits include increased efficiency, greater competitive advantage, wider talent pool and improved focus on core business activities. However, these benefits aren’t experienced by default and come along with some risk factors.
You cannot avoid the risks but having adequate knowledge of outsourcing and a strategic business plan goes a long way. Let us walk you through the risks and methods of overcoming them when outsourcing your software development project requirement to an offshore service providing partner.
Poor communication
One of the biggest risk factors that one might face in software development outsourcing is poor communication. No matter how many tools you use for communication, if you don’t have a clear channel of communication, then mishaps are bound to happen. With outsourcing, as the teams might be working from different locations and different time zones, clear communication can become really challenging. Here are a few things you can do to avoid this risk of miscommunication:
- Know your development team
- Setting up regular meetings
- Allocating a SPOC(Single person of Contact)
- Demanding updates after each development phase
Inadequate domain knowledge
Software development outsourcing companies will pitch to you that they are well versed in your industry and come along with best practices and highly skilled developers. You must be sure that the software company’s programmers are as skilled and proficient as they commit. You do not want to be stuck with a firm with inadequate domain knowledge that cannot fulfill your basic technical requirements and doesn’t know the ropes of your industrial domain. Here are a few things you must assure of before hiring an outsourcing company for your software development needs:
- Check developers’ technical skills
- Ask for relevant case studies and projects
- Include a discovery phase
- Screen out their latest tools and technologies
Hidden costs
When it comes to outsourcing software development, the chances of a company charging you additional fees in the name of last-minute modifications is very high. They might come up with hidden or unforeseen costs such as relocation, recent updates, troubleshooting, redeployment and much more. Although the primary goal of outsourcing is saving costs, you might end up paying more. Here are a few solutions that can help you in refraining from such hidden costs:
- Defining needs and requirements
- Engaging with a third-party law firm
- Signing an airtight contract
Confidentiality and privacy concerns
Hiring a third-party organization for outsourcing your software development in a different part of the world means giving access to your business to an outsider. It is natural that you may not trust your potential software companies but you are bound to discuss your business ideas with them in spite of having security and privacy concerns. Here are a few ways you can share your valuable information with unfamiliar companies without the fear of them stealing your information or using it without your consent.
- Signing NDA(Non-Disclosure Agreement)
- Ownership of the source code
- Look out for ISO 27001 certifications
- Find firms supporting PCI DSS and other outsourcing standards
Lack of project scope clarity
One of the most neglected critical risk factors in hiring a software development company that can undermine the success of your project is the failure to understand your project scope. This lack of clarity can lead to a serious expectations gap and wastage of resources as well as efforts of the people involved in developing the software.
All the project details such as budget, expected timelines, deliverables, schedules, the scope of the project, phases of software development life cycle process and other project details must be documented properly. Moreover, it must be communicated with the dedicated development team members by aligning it with the vision of the stakeholders. Here are a few ways of achieving project scope clarity:
- Prepare an SOP(Statement of Purpose)
- Detailed Software Requirements Specification document(SRS)
- Specifying specific project requirements
The bottom line
The trend of outsourcing software development is growing by leaps and bounds among budding entrepreneurs as well as existing business owners. Although it comes along with reduced costs and a huge pool of talented developers working remotely, there are some cons. Risks are always bound where there is a return. Hiring from the best software development companies providing outsourcing services and dedicated team with relevant experience and expertise in your business vertical helps in minimizing the risks. Nevertheless, you can reduce such risks and navigate through outsourcing a software development team by simply being aware of the anticipated risks. Conclusively, software outsourcing can turn into a daunting task unless all major risks are accounted for appositely.
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As a business entrepreneur, it is natural to have some fears and doubts related to software outsourcing. However, there are ways of overcoming them and succeeding.
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