Software development outsourcing has been a common practice for quite some time. This business model has been adopted worldwide for many plus points, for example, tailored budgets, time savings, adding expertise, etc.
But anything with pros has its cons as well. You might have read about news headlines saying outsourcing is fading away; it is an old business model or how outsourcing can have negative consequences and outcomes.
Delegating IT services to 3rd party vendors is a universal cure for so many businesses. Things don't always go that as intended. The assurances of the desired result also include risks that can turn a seemingly decent idea into debris. Chief executives and Project Managers across companies have to brainstorm and develop technical challenges to stay on track with the ever-changing market ecosystem and consumer expectations. There are notable pain points concerning custom software development.
By now, you might be having second thoughts about outsourcing your IT project. But don't worry because although it is impossible to abolish all the negative factors associated with outsourcing, you can still put some anticipation and mitigation to work and bypass the issues.
A 2016 survey about outsourcing software development projects has marked out some specific pain points. Basing on the survey, the following are some common concerns regarding outsourcing software development and ways to address them:
Quality of Service
One of project managers' most frequent and biggest frustrations is the poor quality of service while dealing with software outsourcing services. Budget-centric outsourcing firms tend to supply inexperienced and cheap-to-afford software engineers. This strategy filters out the more talented cream of the crop who charge a premium for their skills. Sometimes, even teams tailored as per high skillset also fail to meet the expectations despite extensive recommendations. Now check out how to address this issue in the below-mentioned tips.
Tip 1: Too cheap rates
In a bid to save expenditure, don't sabotage your product. Usually, the cheapest ones are the worst. After all, it is the value in exchange for money. Selecting the most inexpensive services might compromise the quality of a product. Surf through various software development rates and calculate an average to regard it as a reference point.
Tip 2: Always ask for a free trial or opt for an MVP
Make sure you ask the 3rd party software service provider to demonstrate a free trial. It is done to judge code quality and their ability to meet the deadline.
There is another way, and it is known as a minimum viable product (MVP). MVP is invoked to test a business idea. Creating an MVP takes 3-4 weeks. MVP helps determine if the team meets your requirements — their update procedure, communication levels, time-zone constraints, and they have the necessary skills and expertise to get the job done.
Tip 3: Cite requirements in the contract agreement
Create an agreement document for the two parties. Define your quality requirements in the agreement. The agreement should mention coding standards, quality standards, criteria for the final product, the list of devices the product is supposed to work in, etc.
There are occasions where products work decently at first but start giving errors and malfunction in the next couple of weeks when the vendor has delivered and is not responsible anymore. Therefore, to avoid such headaches, fix a warranty period by negotiating, during which the vendor development team will correct all the bugs for no added cost.
Outsourcing often leads to uncalled expenditures you may have never expected. It is a common phenomenon. You might end up seeking advice and help from a contract lawyer or business analyst. Maybe some added business trips.
However, it has been observed, the significant causes of extra expenditures in outsourcing are the following aspects:
- The client didn't clarify their requirements.
- The client suddenly wishes to add new features not mentioned in the agreement or make changes beyond the agreement's scope.
Tip 1: Define your requirements and expectations clearly
When talking about large and complex and software projects, it is impossible to foresee every possible challenge and consider every detail. Throughout app development, requirements are often redefined, modified, and new features are added. If you clarify your needs at the starting phases, the cost estimate will be much more accurate.
Tip 2: Be prepared to pay extra if needed
Always be ready for minor changes that pop up during app development which can be implemented without using extra resources. However, if your project requires a previously unexpected new feature and you decide to enforce them, prepare a change request. These alterations influence schedule, scope, and budget will be revised and changed accordingly.
Tip 3: Create a clearcut legal document
Legal documents are pretty complicated to read since contracts or change requests must be as detailed as possible. However, the agreement has to be easy to read and understand. An agreement resembling a word salad with tricky legal jargon may not reveal the costs involved clearly. Carefully reading every clause and line before signing is a must.
Intellectual property issues
When you provide the outsourced team with confidential information, there's always a looming danger of information leakage. The outsourced partner might use your product or its elements as their own, or worse, give it to the next client. To overcome this, You should apply legal measures to protect your intellectual property.
Tip 1: Create a Non-disclosure agreement
An NDA is a legal method of protecting IP rights that specifies confidential information that requires serious privacy. NDA information encompasses business secrets, technical know-how, designs, ideas, customer lists, and other necessary information sent to the service provider. When the vendor signs the NDA, they agree not to exploit or reveal confidential information without prior client permission. In case of NDA violations, the agreement stipulates conditions of penalties and legal prosecution.
Tip 2: Include your final app in the agreement
The contract must specify the clauses mentioning the IP right regarding the final product, and all related aspects such as source code, algorithms, etc., must be transferred to the owner. To simply put, the product belongs to you after you've paid the bill.
Tip 3: Regard your service provider as your partner
One fact that could give you a sense of security is forging a long and trustworthy partnership with a well-grounded service provider. Once a business relationship matures and you start regarding each other as partners, the possibilities of IP rights infringement decrease. This mutual trust promises a sense of safety and utmost security.
The language barrier, Time zone differences & cultural fit
A thoroughly professional proficient English-speaking team is not easy to find. 3rd party services will give assurances about their team's proficiency in English, but it is not as accurate as they claim.
Time zone differences are a common and frequent facet of outsourcing software development, and occasionally, the outsourcing company sets the tone. But time zone differences also affect product delivery deadlines and seamless communication between teams.
Culturally fit is a significant pain point when hiring an offshore outsourcing vendor company. Too many cultural differences and diverse mindsets can lead to botched communication and drain your energy and resources.
Tip 1: Language focus as a criterion
Make sure your supposed service partner has a working environment that observes English as the working language, considering English is now the lingua franca. English language issues come up, especially when dealing with nations in South East Asia. In such cases, try conducting a one-on-one interview with prospects to know if you can understand each other.
Tip 2: Set a fixed time or Nearshoring
The best way to manage this is to know about the time zones of outsourced software developers and agree upon fixed online meeting hours. It has to be sorted out right when shortlisting possible vendor partners or even before signing the contract agreement. Nearshoring is another excellent choice since it presents lesser time zone differences.
Tip 3: Cultural compliance
A similar mindset is essential in business. Thus a more suitable outsourcing company would be the one that not only understands your work culture but culture as a whole.
Most of the risks mentioned above emerge when delegating a software project to a 3rd party developer team for the first time. A 3rd party service provider who can understand product requirements, client expectations, respect contracts, and IP rights, build a well-structured development team, and working model is a wish-cone-true. Being meticulous at the early stages will help you prevent mishaps and pain points. Also, it's about time you understand the importance of developing a partnership with your vendor.