Risks Of Outsourcing Software Development

Outsourscing development has become a global trend. Companies use it to reduce costs, time or to work with someone who has specific technical skills. This seems like a good idea, but it does come with some outsourcing risks. Which, for example? Poor quality of the end product, which hinders its development. Fuzzy responsibility for the implementation of individual parts of the system with the involvement of many people. Difficulties in caring for the high quality of the code, which occur in the absence of appropriate code review tools and processes.

What is software development outsourcing?

Software development outsourcing we can understand as involvement of programmers from outside the company and organization. Most often they are individual programmers working to produce the necessary software. Such developers are not employed in any company / organization, they operate as freelancers, so their awareness of business processes may be at a negligible level and support may end with technical knowledge.

Outsourcing helps companies focus on the tasks at which they are best. It is worth focusing on your strengths and delegating the remaining tasks to someone else, from the outside.  Outsourcing works well in situations where subsequent projects require a lot of learning, and therefore time and money, or when employees have an excess of duties and tasks to be performed on a certain date.  However, it should be remembered that this decision carries risks of outsourcing software development.

What are main pitfalls in outsourcing development?

The main pitfalls in outsourcing development are fuzzy responsibility, lack of knowledge of management processes, difficult communication, poor knowledge of business needs, problems with data security, inferior software quality, increased costs and time of project work. When taking up certain challenges, you always need to know what threats they bring. Remember to always be prepared. Let’s take a look at what exactly it entails and whether the risks of outsourcing software development is worth it. 

Failing to build strong communication ties

This is one of the biggest problems that creates misunderstandings and potential risks in the project. Lack of communication or its significant limitation may cause a lack of understanding of the project assumptions on the part of the programmer. On the part of the ordering party it may cause a lack of understanding of the technical choices of solutions. The changeability of initial assumptions, technical problems that arise in the course of work on the project, in the absence of appropriate communication, may cause mutual aversion. Failure to overcome crisis situations may result in increased costs, extension of project work time and contribute to the creation of a non-fully functional end product.

Unforeseen and Hidden Costs

Often, due to the lack of understanding of the product and the client’s business needs, the programmer only works on a particular task, not looking at the client’s needs as a whole. The code produced by the programmer in outsourcing is also vulnerable to numerous fixes and improvements in the case of further use in the system, because the professional testing stage is most often omitted. Therefore, the product is exposed to a large number of errors, necessary corrections and updates. When the product meets the final business requirements, it significantly increases the cost of producing such software.

Failure in understanding the scope of the project

Outsourcing is characterized by the fact that the outsourcer often focuses only on their area of tasks without a comprehensive project analysis. Usually, it causes that the project is not understood in a wide range, so the solutions selected by the outsourcer are not correct in relation to the business assumptions. It causes confusion and often improvement of the work done so far.

Vendor Failure to Deliver or Constant Delays

Lack of understanding of the project translates into a large number of corrections and the need for continuous improvement, which in turn extends the duration of the project and increases costs. In addition, a significant problem is the lack of control over the team and the effects of activities, because we do not have ability to track progress.  The risk of delays is much greater, because we do not have full control over the outsourcer’s activities. And if it is necessary to change the outsourcer, extending the time of work on the project is colossal and very expensive.

That is why it is so important to select committed people who are able to work not only on the elements of the task, but also on the project as a whole.

Using unsafe data processing methods

An insanely important point. The commissioning party very often transfers confidential data to the outsourcer and relies on its processing methods and ensuring data security. Unfortunately, very often it is not able to ensure adequately secure processes in the processing of confidential data, most often due to negligence, which makes our data significantly vulnerable to leaks. We also have no control over how such a person detains them and whether they have appropriate procedures for deleting confidential data at the client’s request.

In the case of employing an outsourcer with low skills, we risk very serious cost increases, such as the publication of access keys to our websites on programming forums where the programmer looks for help in the implementation of project tasks. Most often, such keys are taken over by outsiders and used for their own purposes, generating a massive increase in costs. Such faults are difficult to prove and most often the contracting authority bears financial responsibility.

Falling short of systematic quality control

If an experienced, qualified team is not working on our product, in which there is a division of roles (programmers, testers, project manager), there is a very high risk that control over the project will be lost. The division of work on the project into sprints can protect us from this, i.e. the stages after which each new element of the system is thoroughly tested, subjected to customer control, and then returned to the team for possible corrections.

If we outsource the creation of a product to an outsourcer who only presents our product to us at the very end, without prior testing and consultation with us, there is a good chance that the final result of the project will not meet our expectations. While this seems obvious, experience shows that this is a very common mistake.

Quality of the Outsourced Product

The quality of the product consists not only of its technical correctness, but also functionality and usability, resulting from a thorough understanding of its specifics, the reason for which it was created and the business needs it should meet. In theory, quality consists of the implementation of the project within the agreed time, budget and scope. In practice, we would add to this the fulfillment of the customer’s business expectations and the satisfaction of future users, which is often as important as mentioned earlier things.

Final Thoughts

As can be seen, the risk of outsourcing is quite high. However, you cannot get discouraged as the above-mentioned outsourcing risks can be avoided. If you plan your outsourcing properly and choose a trusted, proven supplier, there is little chance that something will go wrong. You know IT outsourcing risks, you know that you have to consider inappropriate communication, lack of comprehensive understanding of the project or using unsafe data processing methods.

Having the appropriate knowledge and putting in hard work you will certainly avoid mistakes and by using outsourcing you can gain a lot. We hope that we were able to warn you about the most common risks of outsourcing IT services. For years, we have been supporting companies in their development, creating dedicated software for them. We have already helped companies from the fitness industry during the covid pandemic, we have automated a number of management processes in construction companies in the UK, we support hundreds of campgrounds in Australia. If you want to know more – visit our portfolio, read the opinions of our clients and contact us.. We are waiting for you.