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Due Diligence list for outsourcing software projects

Posted by: Ashley Zimmerman | On: 27th Jun, 2017 | Uncategorized

You should not outsource your software projects.

If you are technology business or startup, you should not outsource your project to a third party agency. You should outsource your non-core competencies. For tech company software is a core competency and it should remain in the house, if possible. Then again there are circumstances which force you to look at not-so-ideal conditions. Having an in house team of product managers, developers, UI experts, testers etc.. require significant capital. In many parts of the country, attracting the right talent early is very difficult despite the availability of capital.

So you decided to outsource your project

Once make the decision you should follow a meticulous, dry due diligence to give your project the best odds of success once completed.

The first list in the item is – are you and your organization ready. You cannot outsource your mess to a third party and hope for a miracle. It never happens. The expression garbage in – garbage out came into existence for a reason. You need to identify who will do project manage, product decisions, high-level requirements etc.. Understand your own strengths and weaknesses. Based on that figure out what are the items you need help. For example, if you need help with putting your concept into the paper as requirements, user stories and screens say so.

If you feel you are ready to go ahead with outsourcing need to decide what type of vendor suits you. Is it a local freelancer, a local agency, an offshore agency, offshore freelancer, mixed agency. Each one has its merits and issues. You should figure out which would work for you based on your values, skills, and budget.

Once you have made up your mind to outsource your requirements, it is better to consider the following aspects:

  1.  Self-Evaluation
    Understand your own competencies & in-competencies. Based on that figure out what are the items you need help with? For example, if you need help with putting your concept into the paper, or portray your requirements visually, get the help of customers case studies or testimonials that give a clear understanding to the end party.
  2. Timeliness
    The very first thing you need to do is document the entire project. You must list what the project is all about, the target audience, the objectives and all other important aspects that you want to get implemented in the web development project. You cannot outsource your mess to a third party and expect for a miracle. It never happens. The expression garbage in – garbage out came into existence for a reason.
  3. Identify key players
    It’s important to identify who will do the project management, who will make product decisions, who formulates the high-level requirements and other important aspects.
  4. Choosing the right vendor
    If you feel you are ready to go ahead with outsourcing, then you need to decide what type of vendor suits you. Is it a local freelancer, a local agency, an offshore agency, offshore freelancer or a mixed agency, from a wide range of options choose the model that syncs best with your business. Each one has its merits and demerits. You should figure out which would work for you based on your values, skills, and budget.Choosing the right vendor can be quite tricky, so it would be advisable to do some homework before you make the next move. Given below are some of the key components you can consider when choosing a vendor for outsourcing:
    A. Versatility
    It always better to opt a flexible vendor who provides services as per the rapid change in market requirements. Developers who have expertise moving their operations to the cloud would be ideal when developing a software for the fast growing economies.B. Engagement Model
    Once you identified the type of vendor you should identify the engagement type which fits best for your project and your team. Normally you can choose from fixed price engagement, Full-time equivalent, time and material engagement or an equity partnership.C. Security concerns
    Outsourcing often leads to insecurity. Since the potential risk of larger attacks is on the rise, software development companies should win the confidence of client decision makers by minimizing their own security vulnerabilities. Examine the review of the vendor before selecting one.D. Expertise
    There is no hard and fast rule that good reviews and experience mean the same. A vendor may get a good review by doing a small project which requires less expertise and may not have the experience to take up a complex project.

    E. Sufficient Resources
    A company with insufficient manpower will lead to a lack of commitment or involvement from developer team due to workload or lack of team work. It’s necessary to have certified, well-updated experts to ensure the activities are smooth & streamlined from the first phase of designing to the testing stage.

    F. Payment Model
    After all, the scouting is done and when you find that the vendor is meeting all your expectations, the next concern is payment. Investigate if the payment policy is favorable for you. The payment pattern varies from vendor to vendor, so it’s important to have a clarity on payment terms are clearly understood.

    It’s challenging to find the right partner as virtually everyone in the market is claiming to be one. A good security policy will be sound and rational. Instead of believing in false claims, get a good reference check done and conduct an audit on the security measures taken to safeguard sensitive data. Also, look into existing case studies or client profile to get a clear picture of their processes and methodologies as it will help you know what to expect out of them.

    Download extensive Due diligence Checklist for outsourcing Software projects HERE

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