When did you last hear the term “global village”? It was a buzzword before buzzwords came into being. Seems outdated now, doesn’t it? Strangely enough, its core meaning still rings true. After all, we are more connected than ever before.
This has impacted a lot of our daily activities, especially work. In fact, you can now collaborate with people from all over the world without moving from your home.
Geographic location means nothing when every kind of professional is accessible (and employable) online. Moreover, the costs of hiring someone from across the globe can be substantially lower.
And that’s without considering the recruitment possibilities a global talent pool offers! That’s precisely why outsourcing has become such a widely used practice, especially when it comes to software development.
If you’re considering this for your enterprise — please, do read on. We’ll discuss the outsourcing risks as well as ways to mitigate them.
What It Is And Why You Should Do It
In essence, outsourcing is an agreement between two companies. Company A hires Company B to handle a planned or existing activity. Said activity is typically carried out internally by Company A.
However, due to a lack of local talent, budget constraints, or any other reason — outsourcing may take place. Company B then takes on the task, either for a predetermined period of time or indefinitely.
This can save time, increase productivity, and enable faster delivery. It also gives company A the freedom to focus on core business activities.
Another obvious benefit is the reduced costs. If your company is in Norway, it makes sense to hire a team from Serbia. You could literally slash the costs in half with this method.
A nearshore way (i.e., outsourcing to a team nearby) could be better if geographical proximity and neighboring work culture are important to you.
Considering Outsourcing Risks
Now that we’ve covered the good bits, it’s time for the not-so-good bits. After all, there’s no denying that handing over your software development to another business comes with downsides.
You will need to carefully assess them before you make a decision that could either propel your enterprise to success — or bring it to ruin.
Let’s look at some of the major outsourcing risks, what can go wrong, and how you can make it right. Ask yourself these questions before you begin.
Are You On The Same Page?
Let’s assume you know exactly what you want. Does your new team know it too? A misguided vision can bring any project crashing down. There are multiple reasons behind this.
Unclear project scope, communication barriers, and lack of clarity about the client’s business processes can all pose a risk. Let’s not forget the lack of awareness of technical nuances. The contractor may know them inside out but the client could easily skip a detail or two.
It’s important to be on the same page every step of the way. Even before you begin, synchronize your vision and share project objectives. Write a work statement, at least. Unified terminology (i.e., defining what a “component” or a “project” is) is essential.
A good contract can save the day. Document every step so you can refer to it if something goes wrong.
Are The Channels Of Communication Clear Enough?
A lot of the above boils down to communication. Most problems arise due to lack thereof. Outsourcing risks include language barriers, cultural differences, and subtle nuances in work ethics. Time zones don’t seem to help either when you’re hiring contractors on the other side of the globe.
Before these issues snowball into roadblocks, the best thing to do is develop a robust communication process. In fact, it’d be best if your outsourcing company already has one in place, as that would show you that they know of the capital importance of communication.
Whichever happens, take an active part in it. Get to know your developers better through video calls and regular catch-ups.
Are You Dealing With Experts Or Charlatans?
A stunning portfolio or a great first interview may give you a good impression. Still, assessing their actual skills takes more than a single conversation. Are your developers-to-be aware of trends and audience preferences? What about legal regulations? Programming languages?
You’ll need to study the portfolio properly, especially focusing on similar projects they have done in the past. Quiz them about the ways in which they’d solve your particular problem.
Which framework would they use? Are they willing to do a paid test job? Reviews on Clutch could also help you check their integrity.
How Much Does It Really Cost?
One thing that every project manager dreads the most is hidden costs. If you’re not careful, you can end up paying extra for obscure overheads.
Watch out for limited numbers of product updates, relocation costs, troubleshooting fees, etc. This all adds up, especially if you automatically assume that everything comes as a part of the package.
In order to remove this outsourcing risk, it’s best to clearly define what’s included from the get-go. Ask for specific hourly rates for every service.
If your business is big enough, assign an analyst to estimate technical requirements. The more transparent both sides are, the less room there is for confusion.
How Safe Is It?
Security is another major outsourcing risk. An app that stores user info — be it credit cards or medical records — must be truly secure. In addition, appropriation of your code or other intellectual property is a realistic possibility if you decide to outsource.
When hiring developers, pay attention to the potential lack of ISO 9001 and ISO 27001 certifications. It’s a major red flag. Always ask for industry-specific compliance certifications.
If you can afford it, consult a lawyer to create an airtight non-disclosure agreement (NDA). Always document all created code. Ask the vendor about previous experience in mitigating safety and security risks.
Can You Fully Manage The Tasks?
We should also touch upon the outsourcing risk of task chaos. It’s common in IT and happens due to weak project management. Inefficient processes can lead to massive delivery delays.
It’s best to have someone oversee the development. The client or the contractor can assign a dedicated project manager.
This person serves as a link between two businesses and (hopefully) enables smooth sailing. In order for this to be a success, make sure you pick the right sort of talent. Conduct a detailed assessment — from their language skills to experience in the field.
Don’t Be Discouraged By The Risk
A clear strategy can help you mitigate just about any risk — be it in software development or project management.
Establishing clear lines of communication, hiring only qualified contractors, and keeping an eye on safety are all equally important. It’s the responsible and cost-efficient way to outsource, ensure successful project delivery, and achieve your vision.
