Software development outsourcing is growing steadily in the IT industry. The risks involved in outsourcing and the benefits, the positives outweigh the negatives. So, many businesses are turning to software development outsourcing to leverage the benefits of gaining access to a larger pool of talent. This includes even popular and global brands like Intel and IBM.
Outsourcing software development allows you to hire developers with great tech expertise. It also enables you to scale your business depending on the workload. This helps save time and improve cost-effectiveness. Moreover, software development also provides fast shipping, instant support, and enhanced quality control.
Still, achieving these benefits does not just happen by chance. Companies have to plan to mitigate dangers in outsourcing for a successful outcome.
Here we look at the common dangers in software development outsourcing and how to avert them.
1. Falling to carry out proper vendor evaluation
Outsourcing software development success will depend on the provider that you choose. It is advisable to choose a competent vendor. One that is the right fit for your company’s culture, philosophy, and engagement style. Basing your assessment solely on the market share or rates could be an oversight. Risks in software development outsourcing include fragile software solutions, customer loss. Others include engagement costs, unauthorized use of sensitive data, and more.
These risks can worsen if comprehensive outcomes and requirements are not well defined. It leads to workflow inconsistencies, which results in wasted financial resources and effort. Luckily, these pitfalls can be averted by ensuring proper evaluation of the provider. The following are some factors you can use to check the vendor capacities. Proper evaluation helps prevent workflow inconsistencies or snags.
Case studies. Check the detailed descriptions of the issues handled. Moreover, you should also check technologies applied and results for clients.
Company maturity. Review the number of employees, website, clients, and staff’s reviews. Besides, you should also check expert domains, and partner’s experience. You should also check the number of implemented projects.
Development process. Understand how the arrangement of the development process, and quality control approaches. Besides, you should also know the distribution of team roles. Doing this will help you establish further communication. It will also help you test the vendor’s full potential.
Current or past client’s references. Evaluating actual feedback sharing can greatly help you identify a great vendor. Moreover, it helps identify hidden gains and downsides through listening to the clients.
Defining project scope. Every experienced vendor has a team of experts who can assess the scope of your projects. This includes compliance procedures, disaster recovery, and software requirements. Moreover, these experts can also suggest practical improvements. These suggestions could help enhance the outcome of your project.
2. Poor system quality control
When outsourcing, it is important to understand that each party has a role to play. Both the provider and the client have to be involved in the entire process for a successful project. Quality control is a responsibility that falls under the two parties involved. For the project to run without snags or inconsistencies. You should have some tech experts in your in-house team.
Having engineers with a keener eye on the latest technology enables you to check risks. This includes risks that can flag bugs that might be critical to product users.
But, the provider still must perform a larger part of quality control. This explains why every vendor should have extensive expertise in quality assurance (QA). With extensive expertise in QA, you can detect coding flaws and fix them.
There are other potential challenges in proper evaluation of the vendor. These include vague system requirements and tight deadlines. These obstacles could result in insufficient test coverage. This is because development is usually given higher priority. Here are some suggestions that would help reduce low-quality shipment risk:
Types of test. The type of test that runs will differ with projects. But, most test runs will need acceptance, load, unit, function testings, and integration. It is also important to outline testing types and test cases used in your project in the test plan.
Efficient QA processes. It is advisable to ensure that the provider has a team with well-defined QA procedures. Make sure that their test case is based on system requirements mapped out in the test plan.
Access to the bug tracking system. Choose one bug tracking system to meet transparency in the workflow. This is by monitoring QA processes.
3. Poor communication ties between the parties involved
Failure to build strong ties between the vendor and client is another common danger. Usually, the misunderstandings result from poor language skills, and time zone differences. They also occur due to a problem with navigating opposing views. This applies when it comes to how processes should be managed or set up.
Misunderstandings could lead to deviation from the initial project requirements and mismatched expectations. Yet, you can reduce the risk of such dangers by following the following suggestions:
Assigning onshore team. When software development outsourcing, having developers to support offshore developers is critical. The approach helps increase urgency and shorten response times while handling issues. Additionally, it also minimizes the chances of misinterpretations. This is because the vendor teams can connect and discuss emerging issues.
Communication plan. The first step in the engagement with an IT provider is building a strong communication plan. This plan may consist of team leads, and regular review sessions with experts. It may also include ad hoc communication methods, status reporting, and more. This can ensure smooth workflow without scheduling of excessive communication activities.
Dedicated project manager. Hiring a dedicated project manager with strong, and soft skills can prevent misunderstandings. This allows them to better communicate project requirements. It also allows them to pass clients’ messages to the team of developers. With better communication skills, project managers can avert possible bottlenecks and hindrances.
4. Failing to adopt safe data processing methods
Reckless outsourcing practices remain the common cause of data breaches across the globe. Every entrepreneur is wary of the concerns that intellectual property (IP) safety poses. According to research, about 63% of data breaches result from careless outsourcing practices.
Unfortunately, some software development companies concentrate only on service level agreements. This causes them to ignore vendor’s security policies. They also fail to pay attention to methods that project managers use in data processing. As well as data loss prevention systems, and more.
Evaluating data processing methods is important to all the parties in software development outsourcing. The company personnel will understand the information that is eligible for sharing. It will also understand the data that is unauthorized for use.
But, you should take these precautions to ensure you use safe data processing methods.
Code ownership. It is advisable to ensure that there is proper documentation. There should also be assurance of legal protection of the code developed by the provider.
Documented security policies. You should also ensure that your vendor is ready to enter into a data processing agreement. The provider should also have a valid security management policy.
Risk management plan. Evaluating potential risks and ways of averting them will ensure safer communication with the vendor. It will also enable you to provide an immediate response to necessary matters.
5. Failing to have a proper exit plan for contractors
When outsourcing, it is highly likely to forget crafting an EMP (Exit Management Plan). Especially if you focus on the plentiful benefits involved. But, an EMP should be finalized before getting into any engagement with the vendor. Like any other technical documentation. Failing to have an exit plan could lead to huge litigation costs later. Make sure you make proper arrangements that involve clarifying details on your partnership.
The exit management plan does not aim to threaten the provider. But, they are prepared to set fair and clear procedures for both parties. This comes in handy when the partnership terminates earlier than what outlines on the timeline. The EMP plan fosters great business continuity while facilitating service handover. Especially when the services are to be shared with another vendor.
Here are some suggestions on what you can include in your exit management plan (EMP):
Knowledge transfer. Ensure that you outline clear policies on knowledge transfer when concluding your project. In this case, include any asset that should be handed over to the customer by the supplier.
The scope of task performed. You also need to define the longevity and the scope of the development provision. It is also advisable to include obligations for all the parties involved, including the provider and the customer. Defining the scope of the task performed is critical. Especially for long-term engagements, since the details may change over time. Finally, ensure that your plan is reviewed by both parties to prevent any inconsistencies.
Software development outsourcing comes with great risks that are easy to miss. Especially if you focus too much on the plentiful benefits. Luckily, these dangers can be averted easily through thoroughly planned development outsourcing. It can also be prevented through proper selection of a provider. The suggestions that we have listed above will help you avoid all the common dangers.
Thanh Pham (Bruce)
Email: [email protected]