Posted by Sponsored Post Posted on 9 February 2023

Avoiding Risks in Software Development Outsourcing

35% of the overall outsourcing services come from software development. The popularity of outsourcing stems from the fact that outsourcing gives you the ability to find the talent to solve a need faster. In addition, the financial component also plays a role because hiring a team from an outsource software development agency is cheaper than hiring an in-house one. 

Despite the advantages of outsource software development services, this type of collaboration also poses risks to be considered if you are thinking about hiring an outsourcing team.

This article looks at the risks associated with working with outsourcing teams. However, before we begin, let’s break down the basic concepts of outsourcing.

Outsourcing and Its Types

Outsourcing is a type of cooperation between two companies, where one provides temporary workers as a service, and the other orders this service to achieve its goals. Today, there are several types of outsourcing services on the market of outsourcing services.

On-site Outsourcing

The type of recruiting specialists for a particular term to work for the company. This type of outsourcing is relevant in circumstances where the team lacks the resources to achieve the desired performance in a job, task, or project.

Onshore Outsourcing

Onshore outsourcing is the type of hiring staff within the country where the hiring company runs its business. The difference with onsite outsourcing is the specialists work outside the company. It is excellent for companies without offices or who want to save on office expenses.

Nearshore Outsourcing

Nearshore Outsourcing is a collaboration between a contractor and an outsourcing company located in countries that border each other. For example, if a company from Germany outsources to a company from the Netherlands, this type of cooperation would be Nearshore Outsourcing. 

Offshore Outsourcing

Offshore outsourcing involves hiring personnel from outside the country that does not border the hiring company’s country of origin. This type of outsourcing offers interaction with talent from all over the world.

Multi-Shore Outsourcing

It’s not hard to guess that multisource outsourcing combines several types of outsourcing. This type of outsourcing helps you get the most out of hiring specialists.

Risks Related to Software Development Outsourcing

Outsourcing involves some risks. We have compiled some of them for you to be aware of and know what to look for before you start outsourcing.

Weak Management

Weak management is one of the most common drawbacks of outsourcing software development, which can result in failures, lousy performance, and little profit.

Outdated Skills and Technical Stack

Hiring outsourced specialists is likely to run the risk that they do not have enough knowledge and skills required for the project. It is recommended to carefully study CVs before outsourcing workers to your development team. Pay attention to the knowledge of the necessary technologies and tools, as well as the experience in other development projects and responsibilities performed.

Lack of Transparency

When you trust the development to an outsourced team, the process may not always be transparent and the customer may be left in the dark about what is going on. Consequently, the customer pays for a pig in a poke.

How to Avoid Risks

Knowing the potential risks of working with outsourcing companies is good, but knowing how to avoid them is even better.

Clarify Management Requirements

We recommend stipulating team management requirements prior to entering into a contract and then including them in the contract itself. What you can do to avoid poor team management: 

  • Establish strong communication with the development team through messaging, audio and video calls;
  • Make sure you have access to a dashboard where you can see the task allocation within the team, the task completion process, and the progess;
  • Set exact deadlines for each sprint and offer a reporting system to track results.

Learn Professionals Background

You can verify that the workers you hire have the necessary experience and skills from their CVs. Outsourcing companies usually have a CV for each employee, showing the programming languages, technologies and tools they are proficient in, the projects they have worked on and their responsibilities in those projects. 

Thus it is possible to choose the team which is suitable for your project in terms of experience and technical stack.

Specify the Technical Stack Preferred

Companies that provide outsourced software development services usually indicate the technology stack on the website. If this is not specified on the website, you can find out by contacting the service provider. 

Make sure that the company owns the stack that is needed or already used in your project.

Analyze Costs

Outsourced development is a volatile process that requires some updates or changes from time to time, which affects the cost. The cost of outsourcing services includes not only the developer’s work, but also management and coordination, hardware and software upgrades, inventory and logistics. To avoid being billed for outsourcing services, consider these elements in your costing and budgeting.

Ensure Learning

The quality of outsourcing can suffer because of the lack of training and onboarding. In fact, the training of outsourced workers is not always the problem of the service provider. oftentimes this responsibility falls on the customer’s shoulders. Do not neglect the training of the hired team, so that you can get them involved in the matter and the process as quickly as possible and achieve maximum results.

Software Development Without Risks

The market for outsourcing services is vast and most of the services provided are IT related. The demand for outsourced software development services has given rise to numerous outsourcing companies that provide software development services. 

With the proliferation of service providers, there are risks that do not bode well for customers. Though working with outsourcing companies can have risks, problems can be prevented before the cooperation begins by choosing a development team. 

At Celadon, we are well aware of the concerns of potential customers, and have built our outsourced development services around giving businesses a shot at empowering companies and their employees with innovative solutions and approaches, without worrying about the risks. 

We ensure constant communication with customers, build cooperation in such a way that the customer remains at the helm, follow Agile in project management, honor transparency in all stages and aspects of development, and work on time and materials.

So if you have a request for outsourced software development services, contact our team to learn more about what we have in store for you.


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