The Truth About Software Outsourcing
If you're like many business owners, outsourcing mobile app development might seem like a good idea, especially from a financial perspective. The average business is strapped for cash, and even if you’re more financially stable at a bigger company, launching a mobile app can still be costly if you don’t have in-house resources experienced in mobile development.
But outsourcing mobile app development is not a one-size-fits-all solution, and it has its own set of advantages and disadvantages. Handing over a list of specs and expecting a service provider to come back with a great digital product isn’t necessarily how outsourcing looks like. The communication is critical, and it's the core of good cooperation with your business partner.
And while the overhead with outsourcing is significantly lower than if you were to build an in-house team, some questions also need to be answered — What is the cost? Will I lose access to my data? What about intellectual property rights and trade secrets? Who will be managing the project?
These are all valid concerns that should be taken into account before choosing an IT outsourcing partner.
What Are the Major Risks of Outsourcing Software Development?
Adjusting to remote teams and time zones
The first major problem with having a remote app development team comes when you want to oversee how outside contractors handle their part of the job. The need to be in control is sometimes hard to let go, especially when you’re working with a partner with different processes.
If you’re in the trust-building stage, consider asking about the possibility of CI/CD (continuous integration and continuous delivery). In the CI/CD approach, you get to see the development of your app daily through a working demo.
CI/CD will help you oversee the progress and evaluate the quality of the deliverables. So when your outsourcing partner is underperforming, you’ll know it very early in the project and will be able to halt the work without risking losing money.
Knowing how the app’s development is progressing also helps to estimate whether you’re going according to the time frame or not. A delay is the last thing any project owner needs in their schedule. But keep in mind that delays are one of the trade-offs of lower costs per hour when you hire offshore developers.
Another issue might stem from different time zones and cultural differences.
Every time you work with a remote team, it’s important to remember that they’re on a different schedule than the one your business operates on. Take extra measures to avoid any miscommunications or mistakes by keeping communication channels open and setting clear goals. Most of all, be considerate of their time by meeting when it’s suitable for both parties.
Working with a partner that lacks business expertise
Assessing the expertise of a remote development team can be a difficult task. And if they’re unfamiliar with your business niche, there's a chance the team you're working with won't be able to navigate industry problems as well as they should. In that case, it will take longer for them to integrate your business vision or project idea into your mobile application.
The solution? Look for an experienced outsourcing company that knows the ropes of your industry. Ask about their processes, project successes, case studies, and anything that will help you assess if they're qualified enough to do what you need them to. We recommend starting with a project discovery phase where intensive research allows teams to gain more understanding before jumping head first into implementation.
Inviting security breaches
Outsourcing app development means sharing portions of your data with another company. This can put your company at risk for security breaches, compliance violations, and financial scams. According to the Deloitte Global Outsourcing Survey, data security and loss of IP (intellectual property) are the leading concern among companies that outsource their operations.
To mitigate the risk of security breaches, outsourcing companies have to be vetted thoroughly (e.g., by checking their reviews on social media). Employees need to stay vigilant for possible misappropriations of trade secrets or loss of IP rights. There is also sensitive customer information that can leak through outsourcing — login credentials, medical records, credit card info — all can make their way to third-party hands depending on what type of solution you're developing.
To minimize those risks, ensure you sign an NDA (non-disclosure agreement) with an offshore company involved in your project before you share any data with them. This way, if any data leaks, they will have to pay penalty clauses. Furthermore, try to collaborate with a company that is legally bound by intellectual property laws (e.g., European intellectual property law).
Experiencing hidden costs and quality issues
While it’s tempting to settle for the lowest bid, in the end, the development might cost more than you expected. Before falling for the cheapest, consider the possible consequences of choosing a partner that has never completed similar projects. Also, is the company you want to partner with big enough to meet the demands of your project timewise?
When new agencies enter the market, they often offer low bids that aren’t feasible. Ultimately, the development ends up costing organizations more because these newcomers can’t manage the scope of the project correctly.
When you're looking to outsource a project, ensure that your contract covers all of the services and deliverables needed. The contract should outline the timeline, estimated costs, and explicit details about what is expected from both parties.
Ask what is included in the per hour contract, so as not to fall into the trap of being charged extra.
Dealing with miscommunication
The key to success for any project is clear communication. You can avoid many costly and time-consuming problems with your projects if you make sure that both parties are on the same page. Without a clear understanding of what is required, delays will pile up and turn good outsourcing relationships sour quickly.
When engaging a partner for outsourced work, make sure to consider and discuss all aspects, including deadlines for deliverables, milestones along the course of your project, software requirements, and expectations on quality.
Dismissing the role of your engagement
One of the risks you possibly haven’t considered but most outsourcing companies are familiar with, is your own engagement. If vendors don’t get timely responses from you regarding questions or requests, chances are you won't be satisfied with what's delivered in return.
When project managers and developers work closely with their clients, they're able to understand all of the nuances in your business and create a solution that fits exactly what you need. This means that there will be less miscommunication between team members on the project, and it will likely end up being completed faster.
The more your outsourcing partner knows about what you want, the better their work will be for you in the long term.
How Can Outsourcing Be Improved?
Before even considering outsourcing, define the business objectives and the project goals internally. By having a clear vision of where your company is headed and how the app you’re looking to develop supports that vision, you’ll set yourself up for success.
The outsourcing process will run more smoothly if you have these questions answered beforehand:
- Who is your target audience?
- What’s the main objective of your app?
- What features would you include?
- What is your app revenue model?
To make the perfect outsourcing decision and mitigate risks, you'll need to consider what kind of support you require carefully. Depending on your needs, there are three different models you may want to explore: staff augmentation, a project-based model, and a dedicated team.
Finally, you know the old saying, "you get what you pay for?" Well, that’s true for outsourcing as well. You wouldn’t be the first person who has paid for the services of a shady outsourcing provider only to never hear back or have any work done.
Always thoroughly research your potential outsourcing company before hiring. An excellent place to start looking would be Clutch or GoodFirms. They both have reviews that detail things like quality, timeliness, pricing, responsiveness. These sites can help sift out all the ill-fitting companies.
Outsource Mobile App Development Without Risks
Outsourcing has a degree of risk attached. But when you approach it properly, outsourcing brings efficiencies across many business areas. There’s a caveat: Good outsourcing relationships require both sides to understand their responsibilities and stay committed to them to run seamless outsourcing arrangements.
To avoid the outsourcing risks mentioned above, it’s important to carefully perform team selection and development planning. Clear-cut communication and understanding ensure that you don't fall victim to common pitfalls like mismanaged projects or fickle relationships between customer and vendor.
With a little bit of effort, you can avoid most software development outsourcing risks.
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