Over the past decade, many companies started making necessary moves to grow their team through a software outsourcing company or virtual workforce. More recently, the pandemic forced even more companies into the world of working with a software development outsourcing team for their development needs.
However, and though this turning towards outside companies was a bit of a necessity, many company owners and decision-makers felt a bit hesitant when it came to working with “outsiders.” This isn’t an uncommon concern or thought process either – and it’s definitely understandable.
There are many advantages that come along with partnering with a third-party software development company. Yet, there are also risks associated with the outsourcing setup that companies must understand before signing on for a project or long-term contract. While the rewards definitely outweigh the cons for most businesses investigating this option, being aware of potential challenges in the business relationship can help negate the issues.
The Risks of Outsourcing Software Development
While the risks of a software outsourcing partnership are manageable when companies act proactively against them, the risks still exist. Decision-makers must fully understand what they are getting themselves, their company, and their team into.
- A Loss of Control – Sometimes companies feel as though they lose a bit of control when they outsource their work. Outsourcing companies may not share all of their standards, workflows, or processes with the hiring client or these aspects may not align with the hiring company’s processes themselves.
Thankfully, companies have the ability to negate this risk with the implementation of solid, regular, and detailed communication practices from both sides. - Communication Failures – The location of the outsourced team may add a few additional challenges to the outsourcing process in terms of time zone differences and potential language barriers. By setting up a standard of simple, easily understood communication on a frequent basis, companies can protect themselves from having issues in the future.
The hiring business should set up time requirements, decide on a common language for all official communication, and establish communication methods or technologies ahead of beginning any kind of project with a new outsourcing provider. - Intellectual Property and Confidentiality – When contracts and outsourcing paperwork don’t cover all of the bases of intellectual property ownership and confidentiality rules, sometimes companies aren’t exactly happy with the outcome. Again, these are avoidable issues when businesses complete the required due diligence before signing on with any third-party partner in general.
Before signing on any dotted line, the hiring company needs to work with the necessary resources to create a contract that solidly outlines important legal factors of the business relationship. This includes intellectual property, project ownership, source code ownership, confidentiality, non-compete clauses, and so on to ensure that they remain content with their position in the working relationship.
The Rewards of Outsourcing Software Development
Working with an outsourcing team provides businesses of all sizes and industries with the necessary support and additional team members to get their projects done while staying within requirements. The benefits and rewards of outsourcing include:
- Extended Skill Sets and Resources – Outsourcing software dev work to a team of trusted experts gives companies access to additional availability and skills. Experienced outsourcing teams continuously train and/or hire for the latest technologies and niche skills required to keep their team members updated to meet their customers’ needs.
- Reduced, More Predictable Costs – While the idea of a totally “foreign” team of developers resulting in more predictable costs sounds a bit out of touch, it’s true. In-house teams must deal with uncontrollable factors such as sick leave, employee turnover, vacation time, and other issues that may infringe upon development time. When these in-house employees can’t work, there isn’t anyone filling in their roles either.
Outsourcing teams deal in fixed costs on a regular basis in most cases, via a retainer, hourly rate, or another arrangement. They offer an entire team to help take on the extra workload when someone isn’t available to work to get projects done for their clients on time and on budget. - Scalability – Some development projects simply require more brains and hands than others. This often challenges businesses in times of need when things aren’t getting done fast enough. Outsourcing provides companies with the ability to simply scale their teams up or down as needed.
- Security – Outsourced development professionals typically only work on development projects. They live and breathe making decisions about available technologies, their benefits, and how implementing them helps best protect a business.
Many outsourcing providers give hiring companies peace of mind with remote monitoring services, implementation of cybersecurity best practices, and emergency services when required.
While it’s definitely understandable for companies to feel hesitant when handing over the keys to their business to let another team drive, the right due diligence and preparation before starting any new venture will help them reap the benefits of outsourcing instead of dealing with the risks.
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