Outsourcing comes with its advantages and disadvantages. When you analyze them, you will come to the conclusion that the benefits of outsourcing are way more significant. You get to save money by not having to train your employees. Also, you don't need to manage the process by yourself. Your provider will manage the whole process for you, leaving you plenty of time for more critical tasks. Outsourcing is a huge trend in many industries due to its advantages. Global companies like Intel and IBM understand the benefits of outsourcing and implement this in their working process.
A dedicated software development team will take over the project for you, saving you precious time. The team has the needed expertise and experience and is flexible enough to provide scaling as your project grows more prominent. In addition, you get the better quality control and help desk support.
Outsourcing comes with its disadvantages too. You might experience poor communication or lags. Or your project might end up costing you more than expected. But it is all about good strategic planning to avoid the risks and guarantee excellent results. Which are the risks connected with outsourcing software development, and how to prevent them?
Some companies might assess the provider in terms of market share and rates. However, this isn't the right approach when outsourcing software development. You should pick a company that fits your business's engagement style, culture, and philosophy. Overseeing these crucial factors might lead to poor customer satisfaction, higher costs, improper software solutions, and cyber security threats.
If you don't set precise requirements and outcomes, the situation will be even worse. The workflow inconsistency might end up costing you money and effort. Therefore, assessing your provider is crucial for making the process work for your needs.
How to assess whether the software development company will suit your needs? Start with their experience and portfolio. Have a look at their employees, projects, and reviews. Don't forget to evaluate your partners' experience.
Another thing to consider is their development process. How does the company organize the process and assign the roles? Get to know more about their quality control process too. This way, you will clearly understand what to expect regarding communications.
To grasp their work process further, you can look at case studies. They will reveal their problem-solving strategies, technologies used, and the results.
What does the project scope include? The company should provide an estimate of the project scope, including procedures, software requirements, and disaster recovery plans. Also, they should specify the number of edits they will make to get the desired result that satisfies your wishes.
Client feedback is another valuable aspect to consider. Reading genuine feedback will help you grasp the customer experience when working with that company.
Building strong communication with your chosen company is one of the ways to reduce potential risks. Poor communication leads to misunderstanding and mismatched expectations, and deviation from the initial plan. The language barrier, time zone difference, and not being able to compromise are some of the problems that can occur.
If you want to minimize the risks connected with poor communication, you should come up with a proper communication plan. You might want to have review sessions with the team to assess the completed work for a specific period. Determine your ad hoc communication methods and stats reporting, but make sure not to go overboard. Taking so much of their precious time for communication will interfere with their schedule.
An offshore team that will coordinate with the outsourced team is a common practice. The process will reduce the response time and help avoid any misinterpretation. Also, assigning a proper project manager will help you avoid communication problems. This role will be responsible for conveying the message to the outsourcing company.
Quality control is a process where both the client and provider should be included. To ensure everything is according to plan, you need to assign a few experts from your company to spot the critical red flags that would interfere with the experience.
The service provider will perform a large part of the quality control process. Therefore, your chosen company should have experience in quality assurance. If they didn't, you would need to identify the potential flaws by yourself.
There are a few things to do to avoid any risks connected with quality control. Firstly, you should make sure your chosen company has an established QA team and process. Vague requirements and tight deadlines will make the team prioritize the development process, leaving less time for testing. Each test should be done according to the system requirements.
What type of tests will be performed? Although this will vary depending on the scope of your project, expect to have susceptance, unit, integration, functional, and load testing. It would be best if you determined a testing plan with your company to determine the types of tests that will be included. Lastly, choosing a bug-tracking system will help you make the process more transparent.
Safe data processing methods
Every business owner is worried about Intellectual property (IP) safety. Kouign that about 63% of data breaches happen due to improper outsourcing practices, it is easy to understand why. Your vendor might focus on service-level agreements but won't implement data loss prevention or security policies.
Considering every factor that influences safe data processing is crucial. Your vendor should be ready to sign a data processing agreement with you. Also, they should have a good security management policy. When your vendor creates any codes, they should be adequately documented. You should make sure that your property is followed by the law in such cases.
Identifying the possible risks and coming up with strategies to solve them will give you peace of mind. Based on this, you can take action whenever a problem arises.
Exit path for providers
A detailed exit management plan (EMP) is very important as it will help you clarify the details regarding your partnership. Before you even sign a contract with your provider, you should finalize the technical documentation. If you fail to do so, you might face litigation costs in the future.
An EMP isn't a threat to you and your business partner. Instead, its goal is to clarify every detail for both sides. This action will identify the steps to be taken when the project comes to an end or is terminated earlier than expected.
The EMP will contain the details if the service is passed to another provider. To create an EMP, you should include a few crucial aspects. Firstly, you should define the scope of the work included in the project. Set a clear definition for the deadline and the size of your specific project. This will determine the obligations of both sides.
The exit plan should be included but also reviewed from time to time to ensure consistency. In addition, you should define policies for the knowledge transfer and any assets that will be handed to you.
Define the costs
One of the risks that business owners are afraid of is the uncertain costs. When you outsource the services, you might find out that some services are not included in your price, and you need to pay more. Some companies might come up with unforeseen costs that fall on your side. An excellent example of this is after-hour services, relocation, and upgrades. When you add up all those additional costs, you might find out that you are over your defined budget. However, you expect to pay less money for outsourcing.
To avoid any unforeseen costs, you should start with defined requirements. When you start working with that company, you should set clear expectations. To prevent the occurrence of unplanned expenses, ask for a list of every cost that you need to pay. They should provide you with a complete list covering the costs from beginning to finish.
If you want to have yourself fully protected, work closely with a law firm to decide which company to choose. Also, you should sign a contract that contains a detailed list of the costs, including the unplanned ones.
Outsourcing your software development doesn't have to be risky. If you do your best to assess the risks and take considerable actions to minimize them, you will feel the benefits of outsourcing. Make sure to carefully plan every step of the process to cover all essential areas. This will prevent any unpleasant surprises from occurring during your project. The whole process might cost you effort at the beginning, but you will be sure that the outcome matches your requirements.
Developing a proper plan will minimize the risks connected with outsourcing. In addition, it will ensure a good connection between you and your provider. A good plan will eliminate potential misunderstandings and make the communication process more straightforward.