Strategizing your project plays a vital role in the success of your business. Likewise, software development outsourcing is an important factor that can determine the quality of your work. If you want to comfortably overcome every obstacle during the development of a project, it is crucial to have the right team developing your software.
It is common among us to think that the world has become more connected and we can outsource the required software development partner with minimal effort. But the truth is that every business is facing unique challenges while outsourcing the perfect team. This blog will help you know about the challenges you will face while outsourcing software development and suggest solutions for dealing with them.
Statista projects that the annual growth rate of IT outsourcing revenue will reach 8.07% from 2023 to 2027.
What is Software Development Outsourcing?
Software development outsourcing simply refers to the practice of hiring an external company or team of developers to work throughout a software product and solutions lifecycle (design, development, and maintenance). This reduces the level of dependency on an in-house team to create a whole software.
In other terms, businesses outsource when they require help from an outside professional who is skilled and experienced in a particular subject.
There are several benefits to software development outsourcing. Some of them are listed below.
Cost Reduction: Budgeting plays a major role before starting a project, and companies find outsourcing to be the best option to reduce costs. Hiring an outside team of developers can highly help in finishing the project at affordable prices.
Faster Development: By collaborating with a third-party company or team, it will be possible to finish projects quicker than usual.
Meets Customer Expectations: By choosing the right business partner you can make more informed decisions that will satisfy the needs of the end user. A skillful team of developers can understand the customers better and know more about the market for producing a successful product.
Lower Risk: You can always expect a reliable end product when working with an experienced company or team that has a good track record. This means the margin of error is reduced to the least and hence the risks are very low.
Wider Reach: Outsourcing allows you to explore and expand into new areas with the suggestions and ideas of new connections. The reach of your company increases indirectly as you make new links outside and this will contribute to the overall growth.
These benefits tell us why choosing software development outsourcing is a good practice.
Software Development Outsourcing Models
Choosing the appropriate software outsourcing model is one of the initial phases you go through after opting to outsource software development.
Let’s discuss the top 3 models that are selected by businesses after considering the size, scope, and budget of the project.
Onshore Outsourcing
In an onshore outsourcing model, a business will partner with an external but local service provider who is very easily reachable and collaborative. The software development and testing phases are undertaken with close monitoring of the business reaching out for the service.
There are several advantages to onshore outsourcing and here are a few of them.
- Higher visibility
- Better collaboration
- Control over project
- Decent time-to-market
Offshore Outsourcing
This outsourcing model will leverage the services provided by companies that operate from foreign countries. Though offshore outsourcing comes with a few negatives, the main reason many businesses choose the model is to reduce costs.
If you are considering offshore outsourcing you should know the below points to have a clear view of how it works.
- Higher time zone difference
- Lower visibility
- Lack of clear communication and collaboration
- Lower control over project
- Lower time-to-market
- Budget-friendly
Nearshore Outsourcing
Nearshore outsourcing is similar to offshore outsourcing where businesses hire companies or teams from a neighboring country or province. This model comes with an equal mix of both pros and cons for businesses with particular needs.
By choosing the Nearshore outsourcing model, you might have to deal with the following qualities.
- Better collaborations
- Higher visibility
- Higher control over project
- More affordable
At this point, you should have a clear understanding of what software outsourcing entails and the outsourcing models that are commonly chosen.
Next, it’s time to through the common challenges faced by businesses during software development outsourcing.
Major Challenges faced in Software Development Outsourcing
While there are several challenges to software development outsourcing, we have mentioned a few important issues along with the solutions to approach them.
1. Communication
Effective communication is key to the success of any software project irrespective of its magnitude and vision. In most situations, businesses find it tough to communicate with service providers who are hired from the outside.
Language barriers, cultural differences between organizations and countries, scattered team members, and other geographical issues majorly contribute to the miscommunication between businesses and outsourced companies.
In addition, communication challenges will lead to poor knowledge transfer which will affect the end product or software that is expected with a particular quality. When the expectations of a business and the delivery of the outsourced partner does not meet, there will be more problems to worsen the situation.
The solutions to this challenge are quite simple.
- Make sure that the team you hire is proficient in the language you require them to be.
- Managers or leaders must comfortably converse and understand the needs of businesses.
- Frequently connect with the hired team through video calls and make them understand the exact requirements.
2. Finding a Trustable Partner
When outsourcing software development, finding a trustable partner is crucial to ensure that the project is delivered on time, within budget, and meets the required quality standards.
Assure that you follow the below-given practices before choosing your business partner who will serve your needs.
- Check the vendor's reputation and position in the market. Go through their reviews and testimonials from previous clients to see how they perform and deliver their services.
- Evaluate the vendor's expertise in the specific domain or technology that your project requires. Closely check if the skillsets they propose to possess reflect on the case studies and other available materials.
- Ensure your partner has experienced project managers who can take care of all project-related issues.
- Make sure that sufficient measures are in place to maintain data security and confidentiality.
3. Control Over the Project
Businesses cannot exert the same level of control over a project when it is outsourced to a foreign team as they can over an in-house team.
Common issues arise when the outsourced team does not align with particular goals that could have been easily accomplished with proper connectivity and control over a project.
To deal with such situations, you can follow the below-given solutions.
- Hire a vendor who works with more transparency and communicates in most stages of software development.
- Try to use an extended team (QA engineer or a QA team) that will help you have more control over the project.
- Review and check the project status frequently to stay updated about the project.\
4. Budget and Fair Negotiations
Everything comes down to money while both sides (hirer and vendor) look to make the most of the deal they have at hand. Hence it is critical to be well aware and informed about the negotiations you make when outsourcing software development.
The simple tips given below can help you make a smart deal with the right vendor.
- Instead of focusing on the price, negotiate based on the value the vendor can provide. As mentioned earlier, consider the vendor's expertise, experience, and quality of work.
- Make sure you clearly state the requirements you expect from the vendor. This will improve the mutual understanding between both parties and avoid unnecessary expenses.
- Stay updated about the current market rates to ensure that you propose a reasonable number to the vendor.
- If you value transparency from your vendor, you must also feel comfortable being transparent with them. Have clear communications and never be uncertain about any deal.
Conclusion
It's no secret that if done correctly, outsourcing projects can bring a lot of benefits to your business. However, outsourcing is not without its own sets of challenges and every company should be ready to face them. The software development outsourcing market is experiencing a surge, and both companies with requirements and resources are reaping their benefits.
Choosing the right outsourcing model and following the required measures after hiring a vendor can make it easy to complete the project you want. Finally, it is never ok to compromise quality over cost. Always stick with the ideas and needs you have with your budget and keep searching for the perfect partner who can contribute to your vision.
