Outsourcing has been known as one of the best solutions out there when it comes to cost reduction. As big a business is, it always aims to optimize its spending so that the money can be spent on other important matters.
Small businesses are the ones that need to utilize the benefits of outsourcing thoroughly. Therefore, software outsourcing is something worth exploring.
A company might not work entirely with technology. Hence, it doesn’t have to spend millions of dollars to have a technological infrastructure built in.
The cost of construction could be as much as 10 times the cost of hiring an offshore team to handle the work. So, the advantages of software outsourcing are undeniable.
However, drawbacks are unavoidable. It’s just a matter of how dense those drawbacks are. Outsourcing has some in its loophole that may cause severe damages to a business.
Since hiring an offshore team to carry out the work has in itself the biggest risks of long-distance collaboration, it could make the situation even worse if you don’t consider the reality carefully.
However, drawbacks always come with solutions. Therefore, Techvify is here to show you the 4 most common disadvantages of software outsourcing and how you can deal with them.
Software outsourcing drawback #1: Collaboration issues
This is the most obvious menace on the list. The problem within it is the differences in geography. Outsourcing usually takes place in different countries. This leads to the difference in the time zone of the offshore team and their clients.
Therefore, everything from project management to communication has to be through digital devices. There will be no face-to-face meetings throughout the entire collaboration of both sides which leaves a lot of difficulties along the way.
- Overdue reports/submission
- Ineffective communication
- Problems/issues within the projects are not communicated effectively
- Lack of understanding of the focus of the project
- Challenges happen more unexpectedly
These don’t happen just once but many times. Therefore, collaboration
Therefore, there are couples of things that you should try to avoid before jumping into software outsourcing:
- Plan out exactly what you expect the offshore team to do.
- Avoid letting the offshore team decide everything as you have to take full control.
- Discuss carefully when and how to communicate about work-related issues/ideas
- Emphasize your deadlines with the team and make sure that they have to strictly follow those.
- Put as much effort as you can into the contract between both sides.
These will help not just you but the offshore team to be as organized as possible. This can help everyone arrange their timetable more effectively and for yourself specifically won’t have to suffer from an overtime schedule.
Software outsourcing drawback #2: The lack of control
Management is hard when you outsource a software development team. It’s not only about productivity or effectiveness at work.
It’s also about the data that you have to share with the offshore team to serve the goal of the project.
Data sharing is a risky matter. Unless you have to share it with someone else outside your company for a very important purpose, it’s unlikely for data to be shared anywhere else besides the department in charge.
Also, another worse scenario (which could be the worst in certain cases) is that the data of your company can be a powerful weapon for the other competitors.
It can be sold to another competitor without you acknowledging that and until you have found out about the truth, it’s already too late.
Therefore, data security is one of the most important that every business has to be concerned about when outsourcing.
However, as bad as it may sound, there’s at least one solution to everything. Of course, you’re paying less since you want to outsource.
Nevertheless, it takes more time and effort for market research. Therefore, strictly follow these steps so that you can make sure you’re working with the right people:
- Spend at least 1 month in advance to do as much research as you can about the outsourcing market.
- Work carefully on the contract that has specific terms that: emphasize that you have the right to retain control over the data, even when the contract is about to end or has already ended.
Also, try to avoid terms that may prevent you from applying specific technologies or blocking you from cooperating with a new vendor.
- Be selective of what datasets you might have to share.
- Be sure you have the right to use open technology standards to gain greater flexibility and maintenance.
These are some basic steps that we strictly follow whenever we outsource a team to finish a minor task for us. It might help you out as well in the future.
Software outsourcing drawback #3: Risk sharing
Risk sharing is a great solution in many cases. Especially the ones that both can share the same objectives, the same motivation, and the same benefits, in the same way.
This will likely help increase the collaboration of both sides so that they can achieve the same goals. However, it might not seem to be an ideal answer all the time.
If you’re working with someone who’s falling into a difficult situation that is opposite to your company’s stability, they could drag you down badly in the end.
Multiple other causes can come along which can also threaten your bottom lines such as high turnover, insufficient resources, or unskilled staff. Therefore, list down these as your criteria when searching for a vendor:
- Their projects in the past
- Their financial stability
- Their experience
- Their tools
After considering all the four criteria above, make sure that the downside of their business won’t threaten yours in the end. Those must be listed in the terms and conditions of the contract.
Software outsourcing drawback #4: Data confidentiality
As mentioned in the 2nd heading, your data might be stolen if you give it to the wrong person. This also includes customers’ data which is the main source of your business’s earnings.
If your customers’ data is leaked out, you will 100% lose your customers’ trust even when it wasn’t you causing that problem.
And a lot of time, working with a third-party vendor means you sometimes have to give them some confidential information or data which might include customers’ data.
Therefore, you must be careful with this no matter who you’re working with.
Therefore, the number one thing that you have to include on the list is to list out what you can share with your internal partner and the limitation that they have over the information.
After that, try to think of as many solutions as possible when things go wrong. And lastly, do not let them look through confidential files that they are not supposed to see.
Do not show any loophole in the contract and you’ll be good to go from there.
I hope these can help you out in the long run when outsourcing a software development team.
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Discover more in our new articles about software outsourcing: 8 Factors That Must Be Consider Before Outsourcing