How To Achieve A More Efficient Delivery in Software Development Outsourcing
Companies are outsourcing part of their business operations to third-party vendors, including software development outsourcing so that they can achieve shorter software delivery time while maintaining profitability.
According to Statista, revenue in the IT outsourcing market is expected to see an annual growth rate of 8.20% (CAGR 2022-2027), resulting in a market value of US$587.60bn by 2027. Such a growth rate indicates a strong demand for IT outsourcing in the upcoming period.
However, there is always another side of the story. It is obvious that outsourcing can bring a lot of competitive advantages, but there are still challenges encountered by organizations in their collaboration with their software vendors.
In this article, let's consider a number of ways to create effective collaboration with your external software development outsourcing partner while reducing as many business risks as possible.
Some common outsourcing problems that are most concerned
Outsourcing to an offshore team means sharing some or all of your IT-intensive processes with a software vendor located in a distant country, which is quite different from using in-house or local teams. Companies can leverage many outsourcing advantages, via the offshore teams' development capabilities, to reduce operating costs, obtain access to unique, industry-related insights, and rapidly scale resources.
However, there are still some problems that are waiting ahead during the process of working with an offshore development team, such as:
- The barrier to communication. The language barrier is among the major reasons that lead to communication difficulties which may negatively affect the overall project result. It is undeniable fact that English has long become an integral part of global business communication. However, English proficiency varies among countries where English is not their mother-tongue language.
- The difference in time zone. Besides the difference in culture and languages, it can be such a difficult task to quickly implement urgent changes requests, as it may require all members of your offshore and in-house team to become available. Since the in-house team and offshore teams work in different time zones, there might be a gap in communication between offshore team members and clients. As a result, this can affect the delivery of deadline-driven tasks.
- Lack of control in the operations. Not being able to resolve arising problems or lack of ability in governing processes that occur here and now can adversely affect the delivery quality and lead to the failure to meet the deadlines.
- Security risks. Protecting sensitive customer data from leaks and reducing the potential for intellectual property infringement are surely major concerns.
- The difference in cultural backgrounds. Each member of an offshore team has a different way of dealing with tasks due to the difference in their backgrounds. For example, different norms related to work schedules or personal space can affect the pace and manner in which projects or decision-making process challenges are handled.
How to Achieve A More Efficient Delivery?
So, if your company is considering working with offshore employees for the first time, you are recommended to follow these few tips below in order to easily navigate the situation:
- Conduct Due Diligence
Finding a suitable software delivery partner is indeed not an easy task. You need to make sure that there is an availability of explicit list of requirements before going any further. Consider the technology, cultural fit, product mix, and industry experience of your potential vendors.
Therefore, word-of-mouth recommendations can be useful. You can check some unbiased reviews on software development and testing vendors through independent platforms, namely GoodFirms or Clutch, in order to simplify and speed up your selection process.
In order to determine if your potential vendor fits your long-term requirements, you should try working with them for a trial or an MVP. This allows the outsourcing vendor to complete several tasks and demonstrate their competence in a short time (up to a few weeks).
- Increase trust
Having your offshore team meet your country's legal, IP, and regulatory standards can help you feel more confident for the future. It is worth mentioning that before you disclose confidential information about your project, clients, etc., prepare a non-disclosure agreement (NDA) to protect your ideas.
- Have high transparency
To avoid missed milestones, increase the productivity of your team, and achieve your determined business goals, your operations should stay clear and transparent while having smooth and open communication between involved parties. This allows companies to see their operations in real-time and track their progress by sharing the KPI system with an external partner, letting everyone view the complete picture.
- Ensure effective communication
It is necessary to have an agreement between involved parties on the most suitable format, communication channels, and schedule in order to better manage different time zones and national holidays.
It is a recommendation to set a time span that is mutually comfortable for you and your partner to work and devote a couple of hours per day to virtual meetings with managers or team members. This allows the organization to keep up with all plans and discuss the latest updates, and current processes and plans.
And you should consider leveraging the time difference to achieve a competitive advantage. For instance, when it comes to new version deployment, it is better for you to choose the timing that has the least impact on your end-users. In this case, your overseas team can work during their normal office hours so that your customers can wake up to a new and clean version.
- Pay more attention to management
Consider hiring a local manager in order to avoid process interruptions and meet deadlines. As a point of contact between your organization and your offshore team, he/she will seamlessly delegate tasks, monitor development or testing activities, report on the progress and problems that might occur, and lead your teams to achieve the defined goals.
However, be careful of micromanagement. It can be viewed by your offshore team as a lack of trust and can negatively impact the working environment, and the overall results. In order to avoid micromanagement, you can trust your assigned leader and make sure every member of your offshore team has a thorough understanding of their tasks, goals, and expected outcomes.
Giving immediate feedback is especially crucial for the final success. This can help define and meet established expectations to deliver quality results on time and within the defined budget.
To sum up
Working with an offshore partner can be a cost-effective option, saving you money, providing in-depth network and technical expertise, and helping you scale your teams intelligently and quickly.
Differences in time zones, organizational cultures, and regional cultures can be difficult at first. In order to handle these differences and organize strong cooperation without compromising security, companies are supposed to pick on their offshore vendor in a careful way to solve legal problems, guarantee the transparency of processes and provide continuous interaction and comprehensive management.