Debunk Three Myths About Offshore Software Development Outsourcing
According to Research and Markets, the IT outsourcing market’s value is expected to be around $397.6 billion in 2025. This is because digital transformation has prompted companies around the world to accelerate and start outsourcing activities. Companies pursuing success recognize that agility is essential for business growth. All industries are evolving rapidly in recent years due to the constantly changing customer needs. To access the best software engineers in the industry, geographic location is no longer a concern; flexibility, high-quality result, and fast delivery are what matter. A US-based company can reach out to a Vietnam software outsourcing company to help it building and deploying its software product.
Although geography is not as much of a concern as before, and organizations are eagerly looking for trusted partners to embark on their digital transformation journey, IT outsourcing still needs to establish credibility somehow. There are many misconceptions related to outsourcing your project to a third party instead of implementing it yourself. Sad but true, there are still many factors causing these rumors.
Who starts the myths about IT outsourcing? And what to do?
First of all, let’s talk about the first common misunderstanding of the “outsourcing” concept. According to a survey conducted by The National Outsourcing Association, most respondents did not seem to understand what outsourcing means, and they did not understand the difference between “outsourcing” and “offshoring” as well as what engagement model they should choose when it comes to software development outsourcing.
So to identify: “outsourcing” refers to a company outsources their work to a third-party organization, “offshoring” is the same thing except for the location is taking into consideration. The same goes for nearshoring and onshoring. Read this article to know what offshore development center (ODC) means and the difference between onshore vs. offshore vs. nearshore software outsourcing.
It is not a rumor that outsourcing companies have been trying hard to position themselves on the market. Poor communication is perhaps one of the severe problems in IT outsourcing. Even when communicating using the same language, sometimes we can get unclear messages. Now when it comes to communicating with an offshoring team whose English is not their first language, of course, there will be language barriers. Although the corporate community needs a clear understanding of benefits and value, offshore software outsourcing companies sometimes have failed to declare what they can bring to the table. We need more than just bullet points. Consequently, media and companies often have a negative view of offshore development outsourcing.
To improve the reputation, offshore development companies can learn from outsourcing companies that have managed to sell themselves properly—for instance, McKinsey & Company. The company has provided many research and reports alongside its primary business function. Many companies, although may not work with it still, rely on their document.
What are the myths, and/or misconceptions?
Now that we have understood some issues leading to common misunderstandings about outsourcing. Let’s have a look at some of the common ones:
Different languages and geography can cause Communication problems.
This is one of the first things that come to mind when someone mentions offshore outsourcing. But looking at the bright sight, since the technological world doesn’t have any borders, accepting cultural differences will bring a diversity of ideas. With the global market changes due to the pandemic and its challenges, cross-cultural communication has played a greater strategic role in the success of companies. When we don’t understand or accept each other, the synergy lack will inevitably lead to the company’s failure.
Whether outsourcing or not, modern companies must understand “culture”. In the communication process, you must learn to be neither too formal nor familiar. Be upfront, get straight to the point, and make sure the interlocutor knows what you’re trying to deliver.
An international offshore development center can help you avoid cultural risks since they have work with clients on a global scale. You can also hire sales reps who have experience in working with international clients or consider training your employees on global business conduct, etiquette, humor, emotional intelligence, and other unspoken norms.
In order to adapt to today’s dynamic business scenarios, constant education is crucial. For this, you can also organize online networking and team-building activities and events that will bring people from different countries together and make them feel appreciated.
The security of your company data will be affected.
Since company data may be worth millions of dollars, it’s daunting to hand this sensitive asset to a third party. A trusted IT outsourcing companies often use documents to standardize every process, which can help minimize security and legal risks. Hence, when choosing a digital transformation consulting services provider, look if they have clear policies and make sure they follow these policies. With this in mind, you can evaluate the security posture and how they execute it daily. Moreover, you can look for trusted outsourcing firms who are certified in ISO/IEC:27001, ISMS to ensure that your organization's business data will be properly handled and protected according standards.
You’ll have little control over the project
Another myth when it comes to offshore development outsourcing is that you’ll have control over your project. But in fact, IT outsourcing provides businesses a lot of control while giving chances to focus on more important business operation activities or other plans.
The software development company is a business partner that should be included in your company instead of just someone you hire. You can have a look at dedicated development centers to understand more about this engagement model. When they work closely with you, the partnership will have 100 percent transparency and responsibility. They can fully understand KPIs, timelines, and difficulties. Project management plays an important role in this: the ability to understand the processes, the team member, and tools that affect the ability to reduce and mitigate dependency risks.
When establishing a partnership, you should discuss the areas of shared responsibility between your team and the outsourcing team. Be prepared to decide which specific area to delegate. It is important to be transparent with your offshore outsourcing partner about what they are authorized, what you prefer to implement by the in-house team. Over the course of six months to one year of the partnership is established, you’ll learn more about your partner’s strengths. Then you can make adjustments if needed, or the delegation could then be increased.
In general, you need to utilize the strengths of both parties. The work should be done by the one that is more proficient at it.
Just like in any industry, there are high-quality and low-quality outsourcing services. The outcome of your outsourcing project plans depends on your software development outsourcing company’s choice. By choosing the right digital partner who has the same vision as your company is essential. Your digital transformation journey will be consistent and smooth when your values are in alignment and your working cultures complement each other.