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Key Risk Areas In Software Development Outsourcing

Posted by: Ashley | On: 20th Dec, 2018 | Uncategorized

Outsourcing software development projects can be a risky endeavor. However, it can be the best, cheapest, or only way for some companies to do what they need. If you can’t afford to have an in-house team and are afraid of the risks, what do you do?

Identifying and mitigating the risk is important. The risk for the project can be originating from Business, management or Technical aspects. Thinking about these risks can be scary. However, knowing what problems to expect can help you to work around or through them.

Business Risks

Undefined Metrics

Defining the metrics for your project from the beginning is important. However, it can be difficult, especially if you aren’t familiar with the software and aren’t sure how to explain your needs.

Working with an experienced, but smaller development company can be important for navigating around this problem. Less experienced development companies or freelancers may not know how to approach a case with less defined metrics. Alternatively, a larger company may not want to take the time to work with you if you can’t tell them exactly what you want.

An experienced but smaller group will be able to help you to define what you need and is more likely to be willing to work with you through the process.

Inconsistent Priorities

A good outsourced software developer or team will work with you to give you what you need. That means that they need to have consistent priorities. This can be difficult if you have more than one person communicating with the outsourcing team.

To overcome this problem, consider having an early meeting with your business team. During this meeting discuss your needs and other basic aspects like appearance. After this, try to lock in your priorities and then select one person to communicate with the outsourced developer or development team. This should go a long way toward preventing lines from getting crossed.

Few Executive Champions

In cohesive organizations, “executive champions” are the “starters.” They identify funding sources and set budgets, motivate team members, and organize groups to maximize efficiency. Due to the nature of outsourcing, this role can be hard to fill. Finding someone to fill it can be even harder.

If you work with a lone developer, that developer and the individual that you elected to communicate with the developer can fill this role together. If you are working with a larger outsourced development team, they will likely have one representative. In that case, their representative and yours can work together to fill this role.

Lack of Team Engagement

Even the best outsourced software developer or team won’t have all of the spirit for your project that you or your employers might. In the best case, this can lead to some minor disconnect and disappointment. With a worse developer or team, it can mean that you don’t get the product that you want or don’t get it on your schedule.

The best way to work around this problem is to interview a number of applicant developers or teams rigorously. Your final selection should be one that can relate to your passion, and that has a good history. Look for agreeable and enthusiastic individuals and ask for client history and feedback or reviews.

Financial Issues

Outsourcing Software Development

In the world of software outsourcing, you get what you pay for. You might not have a sky-high budget, but that doesn’t mean that you should settle for the lowest possible bid.

 

 

If money really is tight, make sure that your development budget is as high as possible. You might even want to ask yourself if you need this project right now. If you can’t afford a good developer, it might be best to set some money aside and look into things again at the beginning of the next fiscal year.

You should also consider your new software almost as a new business. It might not start making money right away. It will take your team time to take over from the developers. If your clients or customers will be interacting with the software, it will take the time to find out about it and start using it as well. If your development budget breaks the bank, your software might not start paying off in time to save you. Don’t outsource as soon as you can afford the service Outsource when you can afford to wait for the service to pay for itself comfortably.
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Contracts

Writing a workable contract can be hard. A good contract should ensure that you get what you want on a schedule that works for you. However, what you want can change as the project goes on. A contract that is too rigid won’t allow for that kind of change.

Similarly, a contract that is too loose may mean that you don’t get what you want or that deadlines are meaningless or unenforced.

Your contract should have firm but not immovable deadlines. It should also define your expectations without locking in your options.

Management Risks

Unrealistic Expectations

A lot of people know what software is capable of but don’t understand  the work that goes into it. As a result, it can be easy to form unrealistic expectations on what your project may look like.

Setting out, it is very important that everyone understand what kind of work an outsourced developer or team can do in the given time and for the given price. The priority should be functionality. Bells and whistles can always be added later if your budget is tight right now.

Unfocused Leadership

This can focus when the delegate between your organization and the outsourced developer or team doesn’t care about the project or has too much going on.

The person chosen for this position should be somebody who is dedicated to the project. If this person is very busy, consider trying to transfer some of their projects to another employee.

Unclear Milestones

Setting milestones is a good way to track progress. They let you know how fast the outsourced developer or team is working. They also let you keep tabs on the project to make sure that it is looking the way that you want. Milestones may be set up by you or by the outsourced developer or team because they can also be a good way to manage payments.

No matter who sets up the milestones, everyone should understand exactly what the milestones are. Unclear milestones are the ingredients of confusion and disappointment.

Lack of Team Interaction

Don’t let milestones be the only way that you track your outsourced development process. Your delegate should be communicating with the outsourced developer or team at least once per week. These meetings should be opportunities for the developer or team and for the delegate to ask any questions that they may have.

Weak Processes

Weak processes can complicate the system and can occur either in your organization or with the outsourced developer or team.

The best ways to prevent these issues take place early in the process with selecting a solid developer or team and drafting a workable contract. Other ways to prevent these issues include keeping up communication and observing milestones.
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Technology Risks

Inadequate Technical Skills

Sometimes the developer or team simply doesn’t have the skills that are required for the job. This is often the case with the cheapest available options.

The best way to avoid these issues is to ask potential developers for portfolios of their past work. This allows you to be sure that they have the skills that you require.

Undefined Operations

Undefined operations are essentially incomplete coding that can result in software that doesn’t work or doesn’t work properly. They can be the result of bad or inexperienced programmers. They can also occur when developers work on software that was started by someone else.

The best way to avoid these issues is to find a quality outsourced developer or team. It can also help to use the same outsourced developer or team throughout a project. If you can no longer work with an outsourced developer or team, be sure to collect all of their documents and code for continued use.

Ineffective Design

Ineffective design can be the result of bad or inexperienced developers. It can also be the result of poor communication or bad ideas by the client organization.

The cheapest way to avoid these problems is to outsource with a good developer or team and leave the design up to them.

A more expensive option is to hire a separate design team or usability specialist to work with you and the outsourced developers.

No Quality Assurance

Some software developers promise quality and will work with you to ensure that your final product is what you want. Other groups don’t. Which you go with might depend on your available funds.

You don’t need quality assurance to get what you want. All you need is a competent outsourced developer or team, a clear goal, and strong communication.

Poor Technical Infrastructure

This issue can manifest when your organization takes over the software from the outsourced developer or team. Even if you get quality software, if your team and your hardware can’t support it might not pay off.

You can try to keep ahead of this problem by learning and training with the software throughout the development process. Updating old hardware won’t hurt either.

There are a lot of risks involved with outsourcing software development. These risks shouldn’t stop you from going with an outsourced developer or team if that’s the best way for you to get the software that you need. Due diligence and careful planning can ensure that you get the software that you need.  You might want to consider downloading our free whitepaper on Due Diligence List for Outsourcing Software Projects.

Download whitepaper on Outsourcing due diligence

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