Risks Associated with Outsourcing Software Development

In the business world, outsourcing has long been considered a highly profitable strategy/ typically used by IT departments across organisations; offshoring software development helps companies achieve their business objectives and delivers myriad other advantages. Research has found that while cost economy is the primary reason why businesses turn to a channel partner for software, quality improvement and access to rare skills follow closely behind it. Also, to think these are only a handful of the many ways companies and their businesses stand to benefit from outsourcing.

Nonetheless, there are multiple companies of all sizes, and regardless of the industry, they operate in, that have been found to flounder while they look for channel partners for software development work. Quite often, the causality of the issues that cause them to struggle is not brought about by outsourcing or triggered by the channel partner for software. Instead, such challenges are typically traced back to internal factors at the organisation that eventually hold back the success of their outsourcing efforts.

To help you get it right, we put together a handy guide to all the factors that present a risk to the success of your outsourcing endeavours.

Unsteady priorities:

Inconsistency while establishing priorities in this context can take a toll on the outcomes. So, decide what is most important when it comes to your solution: functionality, components, or capability? So if you use iterative development and deployment strategies, you must have an order of work product based on the priorities above.

Engaging with your vendor:

Channel partners for software are mostly a continuation of a company’s internal team’s abilities. Long story short, the vendor’s success translates into success for the company too. Hence, it is advisable to adopt an approach wherein you and your software partners work towards a common goal. It can help you deal with the continually changing needs of custom software development with ease.

Lack of clarity about milestones:

Today, the iterative deployment of strategies such as Agile Sprints mean that companies can’t afford to have ambiguous benchmarks. The lack of transparency while relaying responses to stakeholders as well as other relevant parties can result in unnecessary confusion later on. E.g., when a software release is missing a specific thing that was never planned for the current version.

Unreasonable hopes:

A mismatch in expectations between two parties, especially those involved in a contractual relationship, is a far too common an occurrence. To ensure that your expectations aren’t out of sync with the vendors’ actions, you must avoid any grey areas in the context of expectations. Be extremely specific and clear about everything you expect from the outsourcing partner.

Insufficient skills:

You’d be surprised how many times companies fail to vet their channel partners for software adequately. It means they are unable to verify that the team indeed possess the experience and skills requisite for ensuring the project’s success. It is essential to substantiate that the vendor has the training, certifications, functional and industry experience before you sign the dotted line.

Out of focus operations:

It is a well-known fact that there exists a significant gap between processes and applications. Also, it is this awareness that eventually led to the emergence of DevOps since applications and services must necessarily work well together during both developments as well as deployment. So, while channel partners for software are a terrific means to get the job done, but it also introduces complexity to the mix. For example, questions such as ‘how will the software be certified for the targeted platform and who is responsible for it’ or ‘who will take care of hosting?’ are bound to arise. So, be sure that all such factors get addressed adequately.

For you to fully leverage the benefits offered by software development channel partners, it is imperative that you are also aware of such risks that could derail your development project and affect the chances of success. This awareness will then help you mitigate the consequences of these risks.