The outsourcing development market is getting bigger every year – the spending is expected to reach 1 trillion dollars. As an outsourcing development team, we confirm – the scope of responsibilities of the software outsourcing team is increasing all the time. This is why businesses and product owners have reasonable doubt about software outsourcing risks (especially since there are quite a few horror stories online).
Business owners contact offshore teams to build MVPs, create and support large-scale software, refactor existing projects.
Increased demand inevitably leads to the entry of new providers of development outsourcing to the market. It’s a great thing if teams are motivated to build successful products, but not so much if they are just following the trend.
Statista defined that the main reasons for hiring software developers is the need for skills, cost-efficiency, and better focus on core business processes. With this motivation, business owners have certain expectations, too.
In this case, software outsourcing is a way of delivering software quickly without facing issues connected to hiring, onboarding, sustaining an office, and development infrastructure. Development relies on more than a team – you also need hardware, servers, software.
In these and similar cases, software outsourcing helps business owners build new products faster and beat competitors. When business owners consider how to choose software outsourcing teams, the motivation is usually the lack of competitive resources on the local market.
A significant benefit of working with a software outsourcing company is that developers, project managers, and testers are constantly exposed to different domains and software outsourcing trends.
Unlike engineers that come from conservative, corporate environments, outsourcing developers get to experiment a lot.
Obviously, for companies that are located in tech hubs, finding local developers shouldn’t be an issue. However, even if so, the competition is fierce. In tech hubs, established companies are always hiring, too. This is why software outsourcing is also relevant for businesses in tech-populated cities like San Francisco and New York.
Software outsourcing has become increasingly popular lately. Business owners understand that even if they hire local talents, they still need to think of management, communication, infrastructure. It would be difficult to get started immediately. This is an especially important consideration in the following cases.
Most business owners weren’t exposed to outsourcing software development practices and software outsourcing trends for their entire life. Working with software development teams, where people operated as a unit for years, is an empowering experience. The question is, how to choose software outsourcing teams with proven experience? Let’s discuss that.
The potential for cooperation with a software development team is incredibly high. However, just like with everything in life, you don’t always get what you want. The bigger the reward is, the more risks come with it.
As software outsourcing providers, we talk a lot to product owners. A lot of them come to us after experiencing some of the outsourcing horror stories first-hand. This is why we won’t state that it doesn’t have pitfalls and issues – that’s simply not true. Instead, we’ll share the stories and offer advice for preventing the software outsourcing risks.
Sometimes, hiring an offshore or nearshore software development outsourcing team turns into buying a cat in a sack. The exterior looks promising – the team has a lot of expertise, bonuses, transparent methodologies. A sales manager or business analyst highly praises developers and managers. The deal seems excellent.
However, as soon as an owner signs an SLA, NDA, and all the necessary documentation for development outsourcing, an outsourcing partner doesn’t seem to deliver anymore. Communication is irregular, unclear, and uninformative, and the team doesn’t share the process and practices. The result ends up entirely different from what you envisioned while consuming the entire budget.
Solution
Also, request as much direct communication with the team as possible. You’ll be able to see their motivation, technical expertise, and soft skills. We at Syndicode do it by removing intermediaries as much as possible. Business owners can talk to everybody on the software outsource team, directly catching up with developers and testers. They also have influence on how to choose software outsourcing developers for the project, with the full access to CVs.
Not all software outsourcing partners are equally dedicated. Often business owners face irresponsible providers who keep their developers, designers, and testers, involved in multiple projects simultaneously. Even if they end up delivering assigned hours, a busy schedule affects motivation levels and creativity. There’s no way to assure commitment of a software development company – this is one of the main software outsourcing risks.
Solution
It’s possible to hire a dedicated software development team that will work only on your product and even hire developers as a part of your in-house team. Syndicode developers often join remote and office in-house teams of our clients.
A common fear among product owners who consider software outsourcing is a language barrier. You need to walk the team through your business’s specifics, explain the challenge, and understand their vision of the problem. It’s difficult to do if your team’s English is incomprehensible.
It’s not just about language, however. Even if the offshore or nearshore software development outsourcing team has a native proficiency, the lack of established communication practices can sabotage cooperation. This where an experienced project manager comes in is a professional who connects the project’s technical and business aspects. A PM also gets everyone on the team on the same page. If the project manager of the software development company isn’t experienced or transparent enough, the project might be heading towards failure.
Solution
Discuss the communication process and deliverables right away on the discovery stage of development outsourcing. Ask your software development company questions about your industry and type of services. The team should be able to discuss their previous cases, show playbooks, client reviews.
To avoid software outsourcing risks, you need to document every step of cooperation. Right away, you should be looking for software development outsourcing companies who conduct data-driven communication – this implies:
Good teams start with excellent communication immediately. Work with companies ready to schedule calls, send numeric data, provide visual dashboards, etc.
With software outsourcing, you are not just choosing a offshore vendor, and you are opting for the market. You should be looking at the country, its local prices, tech market, education, English proficiency, development expertise, and IT companies’ rates.
How do you know that the choice of location was right? First and foremost, statistics should indicate the clear benefits of hiring outsourcing developers there. All markets have their proven advantages and drawbacks. Ukraine, for instance, is known for low rates and high development outsourcing expertise, but English proficiency is often said to be a problem. Does it mean all outsourced teams in Ukraine don’t speak English? Far from it, but now you know what to pay attention to.
A professional software outsource team knows the weaknesses of its market and resolves them. Understanding the software outsourcing risks of a local market helps you from precise requirements to your future software outsourcing vendor.
We mentioned several times about the importance of experience. Indeed, choosing an established tech outsourcing vendor with reputation prevents many issues. However, the number of years under the belt isn’t always proof of development outsourcing skills.
Some business owners that we worked with told us stories about hiring experienced companies that turned out to be outdated. They relied on reputation and having well-known clients, and stopped investing in hiring new experts. The lack of influx of new specialists inevitably leads to lack of adoption of software outsourcing trends and stagnation.
Solution
Software development outsourcing companies should be focused on the latest innovations – AI, blockchain, big data. It’s great if a team has experience working with large companies and startups since it assures a varied background.
By hiring outsourcing developers, you essentially entrust them with your functionality, technical concepts, and confidential data. This is why you need to discuss the conditions on which documentation, code, business data, logs are stored and used.
Some untrustworthy providers can sign a questionable NDA form, leaving room for error, or bypass signing it altogether. Some business owners even complained that their service providers reused the code on other outsourcing software.
Solution
Service providers should specify what code they wrote custom and where they simply reused an open-source tool or API. It influences the cost of development and customization options of your codebase. By specifying ownership, you’ll avoid the majority of software outsourcing risks connected to code reuse.
A common concern about software outsourcing is the lack of a defined schedule. Some business owners even end up disliking Agile and flexible methodologies altogether. Agile itself isn’t to blame, but it’s indeed often misused. Teams lack understanding of the project, essential to provide estimates and call their lack of organization flexibility.
The consequences of these software outsourcing risks are harsh. Outsourcing developers are usually paid for hours, and business owners end up paying for extra time. Delays from the side of a development firm give competitors spare time and lead to wasted market opportunities. Sometimes, teams have to move marketing and advertising projects into hiatus, causing bottlenecks in other business processes.
Solution
The outsourcing development team should show initiative about understanding the overall business timeline. A good development team understands the impact of other business processes (design, marketing, communication) on the product’s success and moves in sync with those.
It’s important to remember that outsourcing developers don’t work in a vacuum. The project’s must-have components are also UX/UI design and testing. We recommend hiring a single team that can take responsibility for all three. Otherwise, you are risking responsibility shifts and miscommunication in software development services.
Solution
This outsourcing development risk is solved with detailed documentation, competent management, and a motivated team. If hired members are engaged in the process, they will be interested in getting to know the specifics from inside, and interacting with as many specialists as possible.
Risk management is a crucial aspect of any development project. In our experience, product owners often face two software outsourcing challenges:
What should a business owner prefer: being as cost-and time-efficient as possible or predicting budget with all potential risks in mind, potentially overpaying a lot? The answer, as often, lies in the middle.
Solution
A professional team openly talks about potential difficulties and is always ready to provide documentation. You should know how and why the outsourcing development vendor estimated individual costs to risks and be able to influence the result.
Legacy code and technical debt are nightmares of business and product owners that consider software outsourcing.
From our clients and online sources, we’ve heard too much about irresponsible teams who finish the product with good-for-nothing code.
The problem is, most product owners start understanding the software outsourcing challenges only when it’s too late. They finalize the deal, try to deploy the product, or roll out an update, and suddenly, the code breaks. By the time owners understood this, code already needs to be re-written from the ground up. It could be avoided if an owner chose an outsourcing development vendor who pays attention to tech debt.
Solution
You want a computer programming offshore team that will build a codebase that can be sustainable long-term. As a product owner, it’s essential that you understand the importance of building a readable, scalable codebase.
What are the problems in software development outsourcing?
The software outsourcing threats derive from the lack of immediate contact. Miscommunication, low-quality codebase, issues with technical debt, and performance appear as a consequence. Time and language differences create problems in collaboration which influence your product in the long run. However, detailed specifications and thorough research of the outsourcing partner can minimize the risks.
What is outsourcing in software development?
Outsourcing software development is the process of trusting a third-party vendor to handle development tasks. Off-shore outsourcing partner teams that are located in another country or even continent. Due to differences in prices in local economies, outsourcing providers charge less than local developers. Additionally, they offer inaccessible local talent – which is why outsourcing often covers competitive fields. As soon as the company can foresee software outsourcing threats, off-shore cooperation is a great way to achieve cost-efficiency.
How to choose an it outsourcing company for your project?
You need to make a list of requirements for software outsourcing vendors. Start by looking for a provider whose area of expertise overlaps with your business model. If you are building an e-commerce platform, it makes sense to opt-in favor of an e-commerce specialized company. Similarly, for mobile applications, find a team that focuses on that area. Listing sites like Clutch and GoodFirms offer a lot of insights on how to choose software outsourcing developers.
Where can you outsource software development?
Main software outsourcing markets are located in Eastern Europe, India, China. In particular, Eastern European countries have been getting a lot of recognition recently. Ukraine, Poland, and others attract clients with competitive tech expertise, high English proficiency, and relatively low rates.
We believe that a great project with the first contact with a business owner. Our team builds a long-term two-way partnership. On the one hand, we engage product owners in technical aspects; on the other hand, our team members are dedicated to understanding business objectives.
How to choose a software outsourcing team? Look for honest communication. The computer programming offshore team has a deep, insightful perspective on your business, and you have an informed knowledge of our practices and outsourcing software. They should walk you through strategies for managing software outsourcing threats.
This transparent approach serves well both our clients and us. Team members are a lot more motivated when they understand the project, product’s scope, intent, business objectives. We can solve strategic solutions and follow software outsourcing trends,
Business owners, on the other hand, avoid vendor lock-in by working with reliable software development outsourcing companies. They know precisely why we are starting any development outsourcing and testing ideas and know how we do it. This wholesome approach allows us to take responsibility and deliver results that both us and product owners are proud of.