The risks of software outsourcing

A lot of famous companies like Google outsource, but only some of them succeed in doing so.

The advantages of outsourcing software development are huge. According to statistics, the gross market of software development outsourcing hit $64B in 2018.

There are different reasons for outsourcing. Intel, Orange, and Reuters don't hire an in-house team permanently because they see no point in it. Companies save an average of $100,000 per year thanks to outsourcing software development.

Even Hollywood celebrities like Britney Spears and 50 Cent delegate their social media projects and websites to software outsourcing firms.

Outsourcing software development is when a third party is hired to develop web and mobile app products. Apart from developers, companies usually have employees to complete other related tasks like testing, project management, business analysis, etc. It means that you can outsource different kinds of work you need done for your project to one company.

Technology outsourcing gives a lot of opportunities for companies and lets them be unlimited in location or market. It has become a solution for many growing companies, which need software development services and highly experienced professionals.

Depending on the place where information technology outsourcing services are performed, there are the following types of IT outsourcing:

local or onshore IT service outsourcing means hiring staff outside your company but that are still based in your country

nearshore IT outsourcing means hiring contractors in a country near yours, often a bordering country

offshore information technology outsourcing is when a business hires a company or individual who is more than four time zones away from their own for the sake of lower costs for IT outsourcing jobs

You need to start with choosing what and how to delegate to an external team. To succeed here you need to learn more about the risks and rewards of software outsourcing.

The risks of software outsourcing:

The biggest outsourcing disadvantages are financial losses and security breaches. You can avoid these risks if you stay away from the following:

Choosing a team based on price comparison

Prices are very different, so without elementary literacy in software outsour?ing prices, you are blind. So, learn the prices around the world.

Overrating expertise

Sometimes, outsourcing software development is about taking on challenges. So, if you are a non-techy don't outsource simple tasks to overqualified teams, because they face unnecessary expenditures.

Sharing access to sensitive data

It's a great risk to trust your intellectual findings to a software outsourcing company. That is why keep the tasks you would only trust your team with away from strangers and stick to an NDA.

Incorrect expectations

Sometimes a software outsourcing company can mess up even a simple task, because of your low business skills and a lack of responsibility on the end of software outsourcing contractor. That why it is necessary to prepare specification documentation.

Communication issues

Smaller outsourcing companies are easy to communicate with. While a project manager takes care of communication, deadlines and overall quality, you may also reach your team directly to clarify questions or even contact the CEO in some cases.

With big outsourcing software development companies, the communication process requires more steps and is less flexible. That is why it is necessary to set up a communication procedure with the project manager.

Here you will find out more about how to outsource successfully.