Startup world is brutal. There are hundreds of possible ways how things might go awry with your product. Some of them are almost impossible to avoid, some can be prevented. The latter include hiring bad programmers.
As Paul Graham once famously noted, “[…] when I think about what killed most of the startups in the e-commerce business back in the 90s, it was bad programmers.” Indeed, the success of your product depends mostly on the skills and expertise of the development team: Hiring inapt staff comes at a cost. Thus, as a startup, you cannot afford to hire bad developers.
Business case for outsourcing
Outsourcing, as a way to find and retain the required software development expertise, has been a subject of a heated discussion for over a decade. There are millions of successful examples of products built by remote teams. The number of failed outsourcing initiatives might be even bigger. Yet, despite this love-hate relationship, many companies still choose to hire offshore software developers.
And there are some good reasons to do so: Deloitte’s Global Outsourcing Survey states that most respondents outsource their IT tasks in order to cut the costs (59%), increase focus on their core business (57%), and solve capacity issues (47%).
Moreover, outsourcing opens huge staffing opportunities, regardless of your physical location. With the recent talent shortage in Australia, US and Europe, this approach might become even more attractive for businesses all around the world.
One of the most popular outsourcing destinations, India, offers some of the cheapest IT services. However, it is also notorious for its poor quality: Indian outsourcing market has some major drawbacks, which you should take into consideration if you still want to give it a try.
On the other hand, there are more promising destinations to consider, for example Eastern Europe. Poland, Philippines, Ukraine, Romania, and Bulgaria are among the most attractive European countries for outsourcing. Thanks to their geographical proximity, high education level, and overall lower cost of living, they can offer a perfect combination of extremely skilled and professional developers at a reasonable cost (on average, 2 times lower than their American or Western European colleagues).
Yet, regardless of your outsourcing destination, there is always a risk involved when hiring remote software developers. To help you avoid the most common outsourcing pitfalls, let’s consider the following situations and their possible solutions.
Problem #1: Cost & Duration Overrun
“In some projects, costs and durations have spiralled up to 4 or 5 times the in-house estimated cost due to poor productivity and quality.”
Source – Techrepublic.com
Despite the fact that outsourcing is considered to be a great way to save on software development, it sometimes can lead to even greater expenses. There might be multiple reasons for that: Poor staff performance, unrealistic expectations/commitments, lack of internal processes. Some companies might cause delays on purpose to pump out more money from their clients.
Regardless of the reasons, the result will be the same: The deadlines will be missed, probably several times, the total duration of the project will grow, leading to uncontrolled increase in your expenses.
There are several ways to tackle this issue. First of all, we recommend using an efficient project tracking tools. This will increase the transparency and allow you to keep track of the team’s activities in real time.
Agile project management methodologies offer a set of practices for increasing team’s efficiency and transparency as well. Daily/weekly progress reports will help you to keep track of the process and be the first to know about possible issues or delays and thus be able to handle them with minimum losses.
Pro Tip: Fixed price/deadline cooperation model won’t solve the issue. Better choose Time & Material or Dedicated Team approach. Use this guide to choosing a proper cooperation model to learn more.
Problem #2: Deliverables that don’t meet your expectations
“I can’t even think about how much code we’ve had to throw out and start developing over again, because it didn’t work and nobody could figure out how it was supposed to work so we could fix it. Big waste of precious money.”
Source – christophedelsol.com
Another issue that you might face with outsourcing is poor quality, be it source code or the product in general. This might be due to your provider’s lack of expertise, testing practices, or overall understanding of the product requirements.
Alternatively, even good software developers might have issues delivering good results when under pressure. If you work on a fixed price model, any delay might lead to lower product quality as the team is forced to comply with the initial duration/budget requirements regardless of the changes in the amount of work or its complexity.
Having a proper documentation ready before starting the development will significantly reduce the risk of deliverables that don’t meet your expectations. Initial planning and detailed specifications, created together with the team, will give both parties a better understanding of the project and its high-level goals.
As for the quality issues, having a proper QA process will significantly contribute to the overall quality of the product. Make sure your team provides testing as a part of the development process. Additionally, you can set up some quality control activities in-house if you have any doubts about your vendor.
Appointing a tech-savvy product owner or a CTO to control the progress and deliverables in the process is also a good idea. “Black box” outsourcing simply does not work: I you expect to give a task to the team and then come back several months later in order to get your product, the chances are, you won’t be pleased with the results.
Problem #3: Legal Issues
“I have a brilliant idea but I won’t tell you about it as I am worried that it will get stolen.”
Source – almost every person considering outsourcing
IP rights violation, disclosure of confidential information, or data leaks are probably some of the most dreaded outsourcing pitfalls. Indeed, when sending your business’ secrets oversees or sharing your brilliant ideas with a person you’ve never met in person, it is easy natural to be suspicious.
From copying your concept to reusing your source code and designs, or even selling your customer data – there are many ways your rights might get violated. So will the benefits of outsourcing outweigh these potential risks?
The best and the foremost piece of advice in this situation would be using solid contracts, be it Non-Disclosure, Non-Compete, or service agreement. If your partner is legally bound by these documents, you can take a legal action in case of any violation and recoup for your loss.
Pro Tip: Take these 5 steps in order to protect your IP rights
Reputable companies take this issue seriously. They are perfectly aware of the IP rights and code ownership. So any violation would leave a stain on their reputation as a trusted vendor, which might lead to bankruptcy and force the company to cease any activities in the field.
As we can see, there are many pitfalls one should avoid in order to reap all the benefits of outsourcing. Yet, there are many things you can do to save your business harmless. Choosing a reliable and skilled development partner is probably the most important step for ensuring the success of your outsourcing project.