There inevitably comes a time in the life of a start-up or even a large organization when additional resources are required for a particular effort or even a large project. It is common practice for companies to hire a third-party provider which not only performs the necessary work but also is capable of integrating into the organization as part of a team. This can be called Outsourcing, Business Process Outsourcing (BPO) or simply Contracting.
There are many different types of outsourcing services and it is likely that a quick search will find examples that could meet your requirements. You may need someone to help you with the company's financial reporting such as an accountant; or resources to help you position yourself ahead of your competitors such as a marketing team; or you have a small local business and the rapid growth and changes in the industry are urging you to adapt and embrace the power of digital transformation.
Just like all racquet sports software outsourcing has the perfect sweet spot. This occurs when companies find the best collaboration between business needs, technology trends and budget. The ideal software outsourcing provider has the capability and experience to understand their client’s requirements, works with the best and latest technologies and manages their resources efficiently to provide competitive pricing. In this case, outsourcing becomes a value-add solution.
We are a custom software development company so we are focused on delivering technology outsourcing. We have experience delivering many web and mobile projects internationally to companies in other countries, continents and cultures. We have worked with big companies where we allocated a part of our team to particular projects to provide support. In addition we have worked with small and medium companies with no previous digital experience to accelerate and transform their digitisation. In both scenarios we have succeeded in building long lasting partnerships.
ADVANTAGES OF SOFTWARE OUTSOURCING
The biggest reason why so many organizations choose to outsource is related to budget. It is worth noting that it is also much easier to hire a company with in-house skills for mobile app development and software development than building an internal team from scratch. The simplest way to put it is that companies primarily outsource because it reduces their overhead thus increasing their profit margins but also to avail of new expertise with skills not ordinarily at their disposal.
Flexibility in outsourcing software means it is possible to rely on a contractor to create a product while saving time for other company priorities and business goals. Usually companies will initially approach the topic with a speed-to-market approach foremost in their mind after cost. Businesses always need to pivot and adapt as the environment in which they operate changes in order to survive and prosper. Outsourcing can allow a business to launch a new revenue stream without compromising existing ones or its financial budget.
When you hire an external IT company, you actually hire the skills and experience of its team. These benefits will be reflected at every stage of the product life cycle. We have experienced clients coming to us many times with a broad outline of what their software product should look like. After working with our process and taking on board our input, the product evolved and exceeded their expectations.
The outsource provider will usually have a better knowledge of both the relevant technologies and an outside perspective on the client’s proposed approach. This means that they are well qualified to adapt any requirement to the latest industry innovations and best practices enabling acceleration of the client’s goals.
RISKS OF OUTSOURCING SOFTWARE DEVELOPMENT
There is another side of the coin. The benefits of software development outsourcing need to be balanced with the risks. This is not a reason not to proceed but it means that the process needs to be managed carefully.
For example allowing someone who is not part of the organization to suddenly have access to sensitive assets and data may present a security risk. Security breaches can seriously compromise a company for example if a software provider was to inadvertently share sensitive data with unauthorised third parties. Make sure that your software provider has the right processes, people and technology safeguards to keep your data safe.
Weak contractual arrangements can cost a company more than they ever hoped to save by outsourcing its product development. Intellectual property is among the most frequent concerns when an unpatented idea is shared with a software development company. You need to ensure that strong contractual arrangements provide the necessary protection.
We have learned that an outsourcing company provides a team of people from outside an organization to deliver within. This means that they will need to collaborate with internal teams and impact existing workflows. Here things can become risky. When starting a project particular attention needs to be paid to the people involved on both sides to ensure the right chemistry. Excellent language skills, cultural alignment and the ability to connect are essential attributes. Both teams must communicate effectively so that the requirements of the project are not lost in translation. The best way to achieve this is through an agreed structured process to ensure that key milestones are achieved and progress is monitored at regular intervals.
The following is a suggested step by step approach which can be adapted to any project.
- Identify the need, decide on the scope of your project and research suitable partners
- Put the contractual arrangements in place
- Put an SLA in place to enable monitoring and feedback
- Work with defined deliverables and establish key milestones to be achieved
- Schedule regular feedback sessions
- Keep communication open between the outsourcing team and the in-house team
The prospect of outsourcing can seem intimidating until the mechanisms are defined and agreed. This is an excellent resource for companies that want to improve their processes and achieve their goals. Stay tuned for our next article on what is the right type of software outsourcing for you to choose. Feel free to send us your feedback or ask any questions by email at [email protected]