How to Avoid Risks Associated with Outsourcing Software
Before you even consider outsourcing a software development project, you must understand critical risk assessment factors with the help of document analysis
brainstorming, prototyping, legal research and competition survey to make sure your project suffers no losses along with communication approaches that produce the safest and performant software products. Pitfalls of outsourcing include delays due to time lag, culture gaps, unrealistic expectations and unexpected budget snags and overspending due to inadequate foresight and planning.
Establishing an easy and transparent style of communication between clients and outsourcing vendor is necessary to ensure a successful project. All the vital information should be communicated directly and on an official to the Project Leads whose responsibility it shall be to provide clear instructions down the command line.
You must use a reliable group communication platform where important conversations are centrally stored. Giving instant and real-time feedback to the various teams in the outsourcing company helps you get the project in the right direction with clarity of vision.
Maintain regular schedules of meetings (weekly/monthly) to track the progress of the different spirits and phases of the project where you should be directly in talks with the C suite of the outsourcing company. Get in alignment with the teams face to face at the end of each project milestone and answer questions personally over a video conference to clear out any types of miscommunication and discomforts with the ongoing processes. Your offshore agencies need to have a grounded focus on the bigger picture as well as the daily functions, which is why regular updates and Q&A sessions along with a reward and recognition system would provide the outsourcing company with proper clarity and motivation.
When you’re outsourcing, you can’t run the risk of not protecting your source code and trade secrets. Although an NDA can protect your intellectual property rights, you’d do well to retain the source code in-house unless the project requires it to be shared, in which case, you can split it into parts and outsource to multiple vendors so that no one company has access to all the information and data. It’s recommended to get an air-tight contract to ensure that it covers all the important documents like a Non-Compete Agreement, Statement of Work, Data Processing Agreement and a Non-Disclosure Agreement.
Companies can always consider retaining the core development of the project within the company walls and outsource only sub-processes to outsourcing vendors. Keep the source code within the in-house server and while sharing data, make sure you limit access to only those members in the outsourcing company. Don’t trust an outsourcing vendor who doesn’t follow the ‘security first’ approach and doesn’t have satisfactory standard documentation for security management policy for safeguarding against data thefts and breaches.
Going over the budget
Oftentimes, offshored processes can cause the budgets to overrun due to factors not accounted for during the financial planning phase of the project. It’s, therefore, necessary to choose the right type of contract to enter into. Even if you have a time and materials based contract (where pay as per hours and resources), you might end up spending on other requirements like hardware or cloud infrastructure, communication tools and platforms, travelling, marketing, etc. It’s important to get internal and external partners to estimate the total cost of the project and get a ballpark figure first. Then get accurate figures for each overhead and associated costs over and above the offshore budget. Make sure your funding is substantially more than the estimated ballpark for emergencies and unexpected costs.
You’d also need to factor in the legal processing and contracting fees and legal consultations. Building an MVP before the outsourcing contract would help you figure out the initial budget. If you’re building/outsourcing an app, choose a cross-platform solution for iOS and Android so that the costs can be reduced further. Select an outsourcing company that are experts at Agile/Lean methodologies as they’re more cost-effective and have them use a CI/CD pipeline (continuous integration + continuous deployment).
The difference in geography and culture
Your outsourcing company’s goals and work culture should align with yours and strengthen productivity instead of being a source of conflict. It’s also necessary to solve the time lag by the use of scheduled monitoring, a well-structured process with some advanced communication tools, that can make synchronous and asynchronous communication easy and transparent.
Partner with a vendor who is a culture fit with your own company’s ideas and work ethic has a stellar reputation for being modern and in tune with the times so that your project is developed with the best practices followed globally with the least influence of disruptive local factors, a vendor who has quality developers, innovators and a sturdy infrastructure that is of international standards.
Lack of analysis and rushing to the lowest bid
You may have the technical and design aspects of the project skilfully outsourced to the vendor, however, if you haven’t performed due historical data analysis, collected extensive technical documentation, determine functional requirements and high-level features, create a detailed description of the various phases of the development.
It’s necessary for advancement to conduct business and competition research, and define the product scope and features accordingly while also creating precise requirements analysis and how it translates into the roles for internal stakeholders and external vendors. Business analysis before outsourcing decision should consider the vital resources and potential risks after which an approximate estimate should be generated.
If the software vendor comes cheap, his services may not be as good as advertised. A big mistake you’ll make is to compromise the quality of your software product in a rush to settle for a vendor who offers unusually affordable rates while may not have a talented pool of resources to pull off the quality you expect. A thorough background, reference vetting, and credentials check of the outsourcing vendor become extremely important before embarking upon an outsourcing contract of software development.