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It is no secret that businesses are increasingly relying on software outsourcing services as a means to get their projects off the ground and enjoy cost savings, access to a broader talent pool, and quality deliverables. In recent years, software development outsourcing has become a strategic approach for startups, small, middle-tier, and large companies alike to reap the promised rewards of outsourcing. But all too often, the transition is accompanied by a series of problems. Fortunately, these obstacles are avoidable if you get proper solutions in place. Let us lead you through some of the most prevalent outsourcing issues, as well as the workarounds for each.
Fortunately, if you put the necessary safeguards or fixes in place, you can avoid these difficulties. Let’s walk through a few of the most common problems businesses face in software development outsourcing and the practical solutions for each.
1. Ending up with the Wrong Outsourcing Vendor
TThe very first challenge most companies encounter when taking on software development outsourcing services is to track down a trustworthy service provider. Many outsourcing issues that arise later in development processes can be attributed to entrusting your entire project to an incompetent hand, such as overhead costs, lack of transparency, poor communication, and heaps more. It is understandable since businesses today are immersed in a vast ocean of software outsourcing service vendors from different countries. A majority of businesses outsource to the first vendors they approach or the ones that respond to their requests in the shortest time, whereas others choose a service provider based solely on price.
Solution: As a business owner, you should not choose a third-party vendor to work with based on the prices or hunch decisions. Instead, make sure to do your due diligence and research potential vendors by going through their portfolios, customer reviews, industry reviews, and the like. Better check out reliable sources, such as Clutch, TopDevelopers, or DesignRush, rather than only their websites to get accurate insights about our options. Also, consider the vendor’s expertise and past projects to gauge the kind of quality you can expect from them. If you are still confused or unsure where to start, feel free to check out our step-by-step guide to choosing the right software development outsourcing vendors.
2. Choosing the Wrong Outsourcing Models
Another critical aspect businesses often overlook in software development outsourcing is selecting the right engagement model. Depending on the project requirements and scope, each model has its own pros and cons. Most businesses are either not aware of all the options available or decide to go for a model that does not fit their business needs and strategies. Picking the wrong models may result in project delays, increased costs, and other costly blunders.
Solution: If you do not want to lose your shirt in the outsourcing business, you should learn about its different models. Outsourcing arrangements can be based on different models, such as the fixed-price model, the time and material model, and dedicated development teams.
- Fix-price Model: The most popular model among small and mid-sized businesses, the fixed-price model, is a great option for companies who have a defined project scope with clear milestones. In this outsourcing model, the vendor charges you a fee to complete the whole project within a given time frame. This way, you can pay one time, and the vendor will be responsible for all the development work with no worry about hidden costs.
- Time and Material Model: This outsourced service is suitable when your requirements are not set in stone, or they change throughout the development process, plus the delivery timeline is particularly flexible. Here, you pay based on the resources used and the time spent by your outsourcing vendor to design, develop, or integrate solutions for your business.
- Dedicated Team: The dedicated team model enables you to hire a development team to fill the knowledge gap for your project from an outsourcing company. In this arrangement, the vendor assigns a separate team of developers who work exclusively on your project during the entire development process. The competitive advantage is that you can hire people having specialized skillsets and expertise as per your demands.
Afterward, both the organization and the outsourcing partner must sit down together and work things out. Have a thorough discussion about your business needs, budget, and duration of the project. You can then accordingly decide on the most appropriate model for your development processes. Remember, it is crucial to have clear objectives in place and agree upon them before you develop any kind of service-level agreement or outsourcing contract with your service provider.
3. Dealing with Cultural and Language Differences
It is inevitable to face cultural and language differences when it comes to outsourcing, especially offshore outsourcing. In global software development outsourcing, these differences can directly affect communication styles, workflow expectations, and project execution. The clash in culture and language will definitely lead to troubles in the outsourcing process, such as miscommunication, misinterpretation, poor knowledge transfer, etc.
Solution: At this point, the vendor’s location is the key. To overcome such hurdles, you should choose an outsourcing agency located in English-speaking or other preferred language countries where the gap between cultures, languages, and work ethics is smaller. Training sessions, virtual meetings, and some get-togethers will also be helpful for building mutual understanding and trust. Moreover, you can ask your vendor to assign a dedicated project manager who has both the technical expertise and communication skills to bridge the cultural gap between both teams.
4. Insufficient or Poor Communication & Interpretation
In any outsourced project, communication gaps between teams can become a serious bottleneck. Without structured processes, software development outsourcing efforts may suffer from misunderstandings, delayed deliverables, and unclear expectations. Poor or inadequate communication will eventually result in project delays.
Solution: In fact, this is no longer a big deal thanks to the advance in telecommunication technologies, as we can now break the walls of distance and time by leveraging different tools to set up an open line of communication right from the start. It is important to follow a clear communication protocol and make sure that everyone knows their role in the process and is on the same page. Regular meetings, phone calls, emails, and video conferences are some of the essential tools for ensuring efficient communication between both teams. Moreover, it is crucial to choose an outsourcing partner who has sufficient experience with handling international projects and understands the importance of communication in the success of an outsourced project. Having a dedicated project manager will be an added advantage to ensure proper communication and a smooth flow of information throughout the process.
5. Poor Team Management
As outsourced teams are built and managed by an external company, you cannot keep them on a short leash as you run your in-house team. In many software development outsourcing cases, lack of alignment between internal and external teams leads to coordination issues and productivity loss. Poor team management can result in delays or even project failure.
Solution: It is important to establish a clear organizational structure in the project and define clearly how the internal and external teams should be working together to overcome this challenge. This includes setting up well-defined roles for each individual and outlining the goals of the project. Additionally, consider using the project management tools to facilitate smooth collaboration between both teams. Regular updates and feedback will make sure that everybody is on the same page and working towards the common goal. Also, setting up regular meetings, assessing progress via KPIs regularly, and introducing incentives or rewards can help in motivating the team members and address the loss of project control.
6. Intellectual Property & Data Security Risks
Delegating projects to offshore vendors requires disclosing confidential information and trade secrets. This makes software development outsourcing partnerships particularly sensitive when it comes to intellectual property and data security. Without proper agreements and safeguards, businesses may expose themselves to serious risks.
Solution: Developing an Intellectual Property Agreement (IPA) or Non-Disclosure Agreement (NDA) with the outsourcing partner can help protect your business data from any mishandling or unauthorized access. Make sure that the NDA clearly outlines the rights and responsibilities of both parties and that the partner has accepted all the terms and conditions before starting any work. Additionally, it is important to check if your partner has established sufficient technical safeguards in place, such as data encryption and authentication protocols, to protect your business’s intellectual data. Adhering to the strict security protocol and having a data protection system in place will help you mitigate any risks.
7. Underestimating Time & Cost Estimates
Time and cost are two essential factors in any outsourcing arrangement. However, in software development outsourcing, inaccurate estimation can quickly escalate into budget overruns and missed deadlines if external variables are not properly considered.
Solution: The key point in accurately estimating the budget or time for an outsourcing project lies within your requirements and objectives. Thus, it is significantly important to have a well-defined scope of work that includes all the details of the project, such as timeline, deliverables, and resource requirements. Furthermore, it is essential to discuss with your partner and clarify any uncertainties or potential risks involved in order to predict the project’s cost and timeline most accurately. Having a thorough analysis of all factors involved and obtaining multiple quotes from different vendors will give you a better understanding of the cost estimate for the project. Additionally, ensure that your partner has sufficient resources available to complete the project within the expected timeline.
8. Difficulty in Tracking Progress & Delivering on Time
Above all, quality is the final destination outsourcers crave to reach when outsourcing their needs to a service provider. But the challenge lies in monitoring the project’s progress and ensuring that the desired outcomes are delivered within the specified timeline.
Solution: Setting up realistic goals and expectations at the beginning of the project is key to ensuring successful delivery and tracking of progress. Make sure that both parties agree on these and are aware of any changes along the way. Additionally, relying on reliable communication channels such as emails, phone calls, video conferencing, or collaboration tools like Skype or Zoom can help you stay connected with your partner and track progress. Moreover, having a project manager assigned to oversee the project’s operations can help in keeping track of deadlines and ensure quality control. Furthermore, regular review meetings should be organized to keep the project on track and ensure that there are no unforeseen issues coming up. With proper communication and tracking systems in place, both parties can ensure the delivery of the project on time.
Sum Up
Overall, outsourcing your business operations is often a great way to reduce costs and increase efficiency. However, it is important to be mindful of any risks that might come up while proceeding with an outsourcing partnership. Taking the time to understand the key challenges associated with outsourcing can help you prepare and manage a successful outsourcing project. By following the solutions mentioned above, you can ensure that your outsourced project runs smoothly while meeting all of your business objectives.
Are you looking for a capable partner who can accompany you in the upcoming project with competence and experience, quality and transparency, as well as reliability and trust? Mys-VN is here to help. Why Mys-VN Our team of professionals has vast experience in all areas of software development, from planning and management to QA and maintenance. We will be happy to discuss your project, help you define your requirements and the scope of work, and provide a comprehensive quote accordingly. Contact us today!