Software outsourcing is a great way of growing your business without committing long-term resources or spreading existing staff too thinly. However, it involves a significant change in the operation of most businesses, and isn't a step to take lightly.
Before deciding to contract out part of your company's software development, here are some vital questions to ask to ensure you're making the right decision.
Will software outsourcing save any significant money compared to in-house operations?
Don't forget that there will be a management and supervision overhead, which will add to the real cost beyond the contracted price.
A perfect example of financial savings in software development happens to be Hong Kong.
For most businesses in Hong Kong that are not one of the city's major financial firms, it is often too expensive to hire developers locally because the best ones get swept up by the finance companies.
A way most companies in Hong Kong have successfully developed their projects at a reasonable price was to work with a application and softwared development firm, like GreyLoud, that has project management offices in Hong Kong with the developers in Eastern Europe.
This model works for many Hong Kong businesses because, via geoarbitrage, they are able to have local managagement and supervision oversight locally and the normally cost prohibitive development done in a region were costs are lower. So the best of both worlds.
Price Ranges and Quality
How much is your chosen deveopment provider charging, compared to their competitors?
When most of the market is charging more than you can afford, ask yourself if a cut-price deal is a sensible option for this particular service.
Will your needs be adequately covered?
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Room to Grow
Will the results provide real value and growth potential?
A successful application or software outsourcing arrangement is about more than simply cutting costs.
It should provide the opportunity for your company to develop, whether this is by handling greater volume, expanding into new areas of operation, or simply by freeing up full-time employees for more creative and profitable work.
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Some the blocks to starting an outsourced software project is how it will be managed:
- Who will monitor the service provider and liaise with them on your company's behalf?
- Who will be ultimately responsible for the smooth running of the partnership?
- Does your company have the staff and structure to handle this without causing disruption or taking employees away from their core duties?
Many of the above hurdles can be overcome when the outsoure vendor has local offices for project management, as GreyLoud does.
Being able to have face-to-face meetings with the project leads of your development team can save hours of digital back-and-forth and rapidly speed up the time to final product delivery and ROI.
Are you sure you can relinquish enough control over parts of your business to make outsourcing worthwhile?
When you can't resist micro-managing, most of the benefits are lost, and the arrangement will likely come under strain on both sides.
Being resilient in business includes having backup for when plans do not turn out as initially thought. It's a smart exercise to think about the following, before getting into an outsourcing relationship:
- Could you cope with a sudden loss of the arrangement with your service provider?
- Can the provider show that they're financially healthy?
- Have you a reserve provider in mind, or at least is there a thriving market of alternatives?
Needless to say, you should be extremely cautious about making your business too reliant on another single entity.
Are you fully committed to outsourcing, or just testing the water?
The full benefits may take some time to become apparent, as the arrangement matures and beds in.
Will you stay the distance if the early signs are mixed?
Who will be responsible for any legal or regulatory transgressions, such as privacy breaches, public or commercial liability, and so on?
Is the service provider insured to cover any harm they cause?
Does any of the information you pass to your provider have commercial significance, and if so, can you trust them with it?
Do they also carry out work for any of your competitors?
Would this worry you, and if so what can you do to protect your sensitive data?
There comes a time in the development of any enterprise when outsourcing starts to make good sense.
However, if it's to be a worthwhile move, it needs to be entered into with all the potential issues fully considered.
After all, it's your business's future success that's on the line.