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Outsourcing Software Development: How To Make It Work Successfully

outsourcing software development

For many organizations, outsourcing software development services seems to be the answer. This, in theory, lowers labor expenses, increases access to a larger pool of talent, and boosts production. Things don’t always go as planned in reality. Outsourcing from top IT businesses comes with specific hazards that might convert a good concept into agony and misery.

“The 6-hour time gap between us made me uneasy all the time.”

“Because of a lack of communication, I’ve had to spend a lot of time and money repairing and undoing things.”

“I gave them money, but they didn’t complete the task.”

“Approximately 95% of outsourced developers will not be a suitable match for most businesses.”

These are just a handful of the concerns we’ve received from our partners concerning remote team problems. Is this a reason to avoid outsourcing IT projects? Definitely not. Delegating IT duties to external teams is the only practical and cost-effective method to develop for many startups and small companies with limited resources.

While it is impossible to eliminate all outsourcing risks, you can successfully anticipate and mitigate the majority of them. Simply put, prevention is preferable to treatment. Here are some typical aches and pains, as well as solutions.

Lack of Faith

Many people find it difficult to trust someone who does not make eye contact. “Before we make a deal, I need to look them in the eyes.” — This is how many business owners express their apprehensions about outsourcing. By 2020, it is expected that more than half of skilled professionals would be part of remote or hybrid (remote/office) teams. Business leaders should learn to create trust with off-site personnel through tactics other than eye contact in one way or another.

It takes time to build confidence, but you can ease some big worries during the vendor selection step.

Step 1: Conduct extensive research

You should have access to verifiable information on the prospects in order to find the best ones. Seek guidance and assistance from individuals you know. Consult with other company owners who have employed remote services in the past. Visit well-known review sites like GoodFirms, which provides detailed customer feedback on a variety of service providers.

Once you’ve reduced your options down to a few suppliers, request case studies and references. To get firsthand, impartial information on your prospective contractor, contact their clientele.

Step 2: Determine whether or not the communication is adequate

Slow reaction times and one-word responses should raise a significant red flag when it comes to building trust. You’ll need a proactive staff that can grasp your ideas and provide better solutions if you want to succeed. This is difficult due to a lack of communication.

Take the time to thoroughly interview them if you want to learn more about them. Please do not hesitate to ask any queries you may have, particularly technical ones. Quick and unambiguous feedback by email, messengers, phone, or other methods improves your chances of establishing a successful partnership.

Step 3: Think about going on a work trip

It is said that a picture is worth a thousand words. This is something we can’t deny. Face-to-face contact cannot be completely replaced by phone conversations, social media, or even video conferences. Visit your team or meet with their representative (team lead/sales manager/business owner) in person if at all feasible. It will provide you with a better knowledge of your future options.

Control Abandonment

To complete assignments on schedule, even the most trustworthy team need adequate management and monitoring. Now comes the next problem: how do you maintain track of distant workers? When you’re in various time zones and just have a few business hours in common, the situation becomes much more difficult to fix.

The ‘4x Rule’ illustrates the notion that an outsourced project takes four times longer to finish than your original estimate due to a loss of control. Fortunately, there are tried-and-true methods for reducing this danger.

Step 1: Choose a project manager

Some business owners choose to manage their remote workforce directly. Appointing an onsite project manager, in our view, is a significantly more effective alternative.

An experienced PM will be familiar with your new recruits and will be able to oversee their work throughout normal business hours. What other ways do onsite project managers contribute to the success of your project? They include, among other things:

  • Make a schedule.
  • Keep track of deliverables
  • Transform your thoughts into precise plans.
  • All workflow procedures should be documented and updated on a regular basis.
  • Provide you with reports at the agreed-upon intervals

It’s worth noting that reputable service providers are quite accommodating when it comes to working hours. Their prime ministers adjust to time variances and country customs. For example, if the customer is from Israel and the weekend is Friday-Saturday, the PM will accommodate them and be accessible on Sunday.

Step 2: Select the appropriate project management software

All vendor actions are more visible than ever before thanks to modern project management systems. JIRA, Mingle, and Assembla (to mention a few) are examples of programs that enable you to view what has been done and what is still in process, as well as the due date/time for each work.

Step 3: Schedule meetings on a regular basis

You may organize frequent online meetings with your team, even if your project manager is intended to keep you up to date. You may use these weekly or monthly meetings to discuss objectives, identify and repair any workflow bottlenecks, and build mutual understanding.

Problems with Quality

Even the most competent teams with the greatest advice are not always able to provide high-quality software. To get the greatest outcomes, explicitly establish your quality standards and take efforts to ensure that they are followed.

Step 1: Be wary of rates that are too low to be true

The cheapest option is generally the worst, thus choosing the cheapest option means sacrificing the quality of your future product. As a starting point, look at the region’s average software development rates. The hourly pricing range is roughly as follows:

$25-$50 in Eastern Europe

$18-$40 in Asia

$30-$50 in Latin America

Australia — $20-$40

Keep in mind that the services of skilled software engineers are often more costly.

Step 2: Request a free trial or begin with an MVP

Many bespoke software development firms offer to give a free trial in order to demonstrate the quality of their code and their ability to meet deadlines.

Another alternative is to test your company concept using a minimal viable product (MVP). It takes 2-4 weeks to create an MVP. During this time, you’ll assess if the team fulfills your needs, including how they communicate, resolve timezone problems, and, of course, whether their experience and abilities are enough.

Step 3: Incorporate quality assurance standards into the contract

In the contract, specify your quality expectations. The contract should include code quality requirements, criteria for the end product, maximum throughput capacity, a list of devices on which the app is expected to operate, and so on.

When the seller is no longer accountable for the app, it may perform correctly at first but begin to malfunction within a week or two. Negotiate a warranty term during which the development team commits to patch any flaws you uncover at no additional expense to prevent such problems.

Costs Not Included

Outsourcing incurs expenditures that you may not have anticipated. You may, for example, need the assistance of a contract lawyer or a business analyst at some point. Take into consideration the above-mentioned business travel expenses. However, two reasons, in our experience, cause the majority of the additional expenses associated with outsourcing:

  • Not all of the client’s needs have been addressed.
  • The customer wants to add features or make adjustments to the project that aren’t in the original scope.

As a result, we suggest that you do the following steps:

Step 1: Be as specific as possible about your expectations

It’s hard to account for every aspect and anticipate every conceivable issue when dealing with complicated and non-standard software projects. During the development of an app, requirements are often changed, adjusted, or added to. The cost estimate will be more accurate if you explicitly describe (and record) your needs at the start of the project.

Step 2: Be prepared to pay for the scope increase

Minor adjustments that arise during the development of the program may be applied without the need for additional resources. However, if your project expands or you decide to add new features on the spur of the moment, you should prepare a change request. The project timeline, scope, and budget will be evaluated and adjusted as a result of these changes.

Step 3: Stay away from difficult paperwork

Contracts and modification requests should, in fact, be as explicit as possible. At the same time, the contract should be simple to comprehend. Buried expenses may be hidden behind tricky phrasing and sophisticated legal jargon, as well as tiny print. In all circumstances, read each sentence carefully before signing.

Concerns about intellectual property

There’s always the risk of sensitive material being leaked when sending it to a distant team. You may also be concerned about your recently produced app. What if the seller keeps this software or a portion of it for themselves or for a future client? To prevent this, take legal steps to safeguard your intellectual property (IP).

Step 1: Signing a non-disclosure agreement (NDA)

When you start working with a new remote team, an NDA is a simple approach to safeguard your intellectual property. The paper specifies what information is deemed sensitive and requires special protection. It might include trade secrets, know-how, ideas, designs, customer lists, and other information that you need to transmit to your vendor for evaluation and project development. Your service provider commits to not abuse or distribute sensitive data without the client’s consent by signing the agreement. In the event of a breach, the agreement stipulates fines and legal action.

Step 2: Include a clause in your primary contract that protects your finished app

The primary contract should include a clause saying that your firm owns the intellectual property of the completed product and everything linked to it (source code, algorithms, etc.). The software package is yours after you have paid the fee.

Step 3: Consider your service provider as a collaborator

By forming a long-term cooperation with a dependable service provider, you can tackle security concerns much more quickly. The chances of infidelity and stealing decrease as your relationship evolves and you begin to consider one another as business partners. Mutual trust, on the other hand, allows you to quadruple your safety and security efforts.

Last Thoughts

When you delegate a software project to a remote team for the first time, you run into the majority of the hazards described in this article. You see them as complete strangers, and with good cause. “Time cures all wounds,” as the old proverb goes. Finding a service provider that meets your needs, negotiating all of the agreements, and developing a well-structured workflow all take time. The more careful you are in the beginning, the less pain you will avoid. In the long run, you should devote effort to building a relationship with your vendor. Many anxieties, fears, and pains may be alleviated by a long-term business partnership built on openness and trust.

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