The Pains of IT Outsourcing and How to Prevent Them in Three Steps

  • CrowdforApps
  • Apr 22, 2020

The Pains of IT Outsourcing and How to Prevent Them in Three Steps
CrowdforApps Software Development Apr 22, 2020 257

Delegating IT services to 3rd parties seems like a panacea for several businesses. Ideally, this reduces labor costs, gives access to a wider pool of talent, and improves productivity. actually , things don’t always go that smoothly. along side the promise of rewards, outsourcing from top IT companies also involves certain risks which will turn a healthy idea into pain and suffering. 

“I was constantly nervous about the 6-hour time difference between us.” 

“I’ve had to spend tons of your time and money redoing and undoing things due to a scarcity of communication.”

“I paid them, but they never finished the work .”

“About 95% of outsourced developers aren't getting to be an honest fit most companies.”

These are just a couple of complaints about the failures of remote teams we’ve heard from our partners. Does this mean that outsourcing IT projects may be a bad idea? never . for several startups and little businesses with limited resources, delegating tech tasks to external teams remains the sole realistic and cost-effective thanks to grow. 

While it’s impossible to eliminate all the risks related to outsourcing, you'll successfully anticipate and mitigate most of them. Simply put — prevention is best than cure. Here are some common pain points and ways to deal with them. 

Lack of Trust

Many people find it hard to trust somebody without eye contact. “I got to look them within the face before striking a deal.” — That’s how entrepreneurs often explain their fears regarding outsourcing. the truth is that by 2020 over 50% of skilled workers are going to be a neighborhood of remote or hybrid (remote/office) teams. a method or another, business owners should learn to create trust with off-site employees using methods aside from eye contact.

Developing trust takes time, yet you'll alleviate some major concerns at the seller selection phase.

Step 1 — do thorough research

To identify the proper candidates, you ought to have access to verified information about them. Seek advice and help from people you recognize personally. ask other business owners who have already used remote services. Visit popular review platforms like GoodFirms, which publishes exhaustive client feedback about different service providers.

When you have narrowed down your option to a couple of vendors, ask them for case studies and references. Contact their clients to get first-hand objective information about your potential contractor.

Step 2 — check if the communication is sweet enough

Smooth communication is vital to trust, so slow reaction time and one-word answers should raise an enormous red flag. To succeed, you would like a proactive team capable of understanding your ideas and offering better solutions. Poor communication makes this impossible.

To know people better, take time to interview them properly. be happy to ask any questions you've got , especially technical ones. Prompt and clear feedback via e-mail, messengers, phone or other channels increases your chances of developing an efficient relationship.

Step 3 — consider a business trip 

A picture is worth thousand words. We can’t deny this. Phone calls, social media or maybe video sessions can’t entirely replace face-to-face communication. If it’s possible, visit your team or meet with their representative (team lead/sales manager/business owner) face to face . it'll offer you a far better understanding of further prospects.

Loss of Control

Even the foremost trustworthy team needs proper management and supervision to perform tasks on time. Here we face subsequent challenge: how does one keep track of remote employees? Being in several time zones once you only have a few of business hours overlapping makes the matter even harder to unravel .

Loss of control leads to the so-called ‘4x Rule’ — it reflects the very fact that an outsourced project takes fourfold longer to finish than your initial estimate. Fortunately, there are proven ways to attenuate this risk. 

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Step 1 — appoint a project manager

Some entrepreneurs like better to control their remote team themselves. In our opinion, appointing an onsite project manager may be a much more effective solution. 

An experienced PM knows your hires well and may monitor their work during local business hours. How else do onsite PMs contribute to your project success? Among other things, they:

  • develop schedules.
  • track deliverables.
  • take your ideas and switch them into detailed plans.
  • document and frequently update all processes within the workflow.
  • give you reporting at the agreed times.

Note that good service providers are very flexible in terms of working hours. Their PMs adapt to time differences and to national traditions. for instance , if the client is from Israel, with a Friday-Saturday weekend, the PM will take that under consideration and be available on Sunday.

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Step 2 — choose the proper project tracking software

Modern project management tools make all activities from the seller side more transparent than ever before. Such apps as JIRA, Mingle or Assembla (to name just a few) allow you to ascertain what has been already completed and what's still ongoing , along side the due date/time for every task.

Step 3 — hold regular meetings

Though your project manager is meant to stay you within the loop, you'll also schedule regular online meetings together with your team. These weekly or monthly sessions enable you to review goals, identify and fix possible workflow bottlenecks, and make mutual affection .

Quality Issues

Even skilled teams with the simplest recommendations sometimes fail to deliver software products of the expected quality. to urge the simplest results, you ought to clearly define your quality standards and take steps to ensure their implementation.

Step 1 — watch out for extremely low rates

The cheapest is typically the worst, so once you select rock bottom cost you compromise the standard of your future product. Use the typical software development rates across the region as a point of reference . Roughly, the hourly price range is as follows:

  • Eastern Europe — $25-$50
  • Asia — $18-$40
  • Latin America — $30-$50
  • Africa — $20-$40

Bear in mind that services of experienced software developers are comparatively expensive everywhere.

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Step 2 — invite a free trial or start with an MVP

Many custom software development companies comply with provide a free trial so as to prove the code quality and their ability to suit the time-frame .

Another option is to start out with a minimum viable product (MVP) to check your business idea. Building an MVP takes 2-4 weeks. During this era , you’ll find out whether the team meets your requirements — how they create updates, communicate, solve timezone issues and, of course, if their expertise and skills are ok .

Step 3 — include quality requirements within the contract

Specify your requirements for quality within the agreement. The contract should contain code quality standards, criteria the ultimate product must meet, its maximum throughput capacity, list of devices that the app is meant to run on, etc.

Sometimes, apps work properly initially but start malfunctioning during a week or two when the seller is not any longer liable for it. To avoid such issues, negotiate a guaranty period during which the event team agrees to repair all the bugs you discover for no extra cost.

Extra Costs

Outsourcing results in costs you'll haven't considered . for instance , at some stage, you'll need help from a contract lawyer or business analyst. Take under consideration expenditures on business trips mentioned above. However, in our experience, the main extra costs in outsourcing are caused by two factors:

  • Not all the client’s requirements are clarified.
  • The client wants to feature features or make changes that are beyond the initial scope of the project.

On this basis, we recommend that you simply consider subsequent steps:

Step 1 — define your expectations as clear as possible

When we mention complex and non-standard software projects, it’s impossible to require under consideration every detail and foresee every possible challenge. Over the course of app development, requirements are often modified, refined or added to. However, the more clearly you explain (and document) your requirements at the outset of the project, the more accurate the value estimate are going to be . 

Step 2 — be able to buy the expansion of scope

Minor changes that emerge during app building are often implemented without using extra resources. Yet, if your project grows otherwise you suddenly plan to implement new features, you ought to prepare a change request. supported these alterations, the project schedule, scope and budget are going to be reviewed and altered . 

Step 3 — avoid complicated documents 

It’s true that contracts and alter requests should be as detailed as possible. At an equivalent time, the agreement should be easy to know . Tricky wording and sophisticated legal terms, also as small print, may disguise hidden costs. altogether cases, carefully read every line before signing.

Intellectual Property Concerns

When you send sensitive information to a foreign team, there’s always the danger of leakage. Also, you'll feel nervous about your newly developed app. What if the seller uses this software or a neighborhood of it as their own or for subsequent client? To avoid this, you ought to take legal measure to guard your property (IP).

Step 1 — sign non-disclosure agreement (NDA)

An NDA may be a basic thanks to protect your IP once you start working with a replacement distributed team. The document defines what's considered tip that needs extra privacy. It can cover trade secrets, know-how, ideas, designs, client lists, and other data that you simply got to send to your vendor for assessment and further development of the project. By signing the document, your service provider agrees to not misuse or share sensitive data without permission from the client. just in case of violations, the agreement provides for penalties and legal prosecution.

Step 2 — protect your final app within the main contract

The main contract should contain a clause stating that property of the ultimate app and everything associated with it (source code, algorithms, etc.) is transferred to your company. Once you've got paid the bill, the software package belongs to you.

Step 3 — consider your service provider as a partner

You can solve security issues much more efficiently by developing a long-lasting partnership with a reliable service provider. As your relationship matures and you begin treating one another as business partners, the chances of cheating and theft get lower. Instead, mutual trust enables you to double safety and security efforts.

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Final Thoughts

Most risks mentioned during this article emerge once you delegate a software project to a foreign team for the primary time. You perceive them as total strangers, and not without good reason. However, because the old saying goes: “Time heals all wounds.” Finding a service provider that matches your expectations, negotiating all the terms, creating a well-structured workflow— of these processes take time. The more diligent you're at the initial stage, the more aches you’ll prevent. Taking the long view, you ought to also invest time in developing a partnership together with your vendor. an enduring account supported transparency and trust may be a universal cure for several worries, fears, and pains.

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  • CrowdforApps

    CrowdforApps

    Apr 22, 2020

    CrowdforApps is an undeniable research and survey stage that helps programming purchasers and administration searchers to choose the best programming or firm. In the meantime, it encourages IT organizations and programming sellers to support client procurement details, piece of the pie and brand mindfulness. CrowdforApps, similarly as the name recommends, is a committed network of "performing" IT organizations just as programming arrangements.

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