Outsourcing Challenges And Experienced-Driven Practices For Avoiding Them

Software outsourcing can be a game-changer for your business, but it comes with risks and challenges. If your team outsources for the first time, you are likely unaware of how many pitfalls can be lying in your way. The best practice in these cases is usually to consult experienced teams who are willing to share their progressive experience and address your concerns.?

As an IT outsourcing team with more than 10 years of experience, Jelvix collected quite a lot of insights. Now we are ready to share the perspectives of outsourcing developers and tell you about hidden risks that some vendors might choose to remain silent about.?

So, let’s face the main difficulties of software outsourcing and discuss the possible solutions.

Software outsourcing management risks

Many concerns lie not in the technical part but, instead, in management. While business owners acknowledge the financial and innovative benefits of software outsourcing, they are skeptical about communication with off-shore teams, time differences, transparency, etc.

Decision-making: who, when, how

When you start working with the outsourcing team, authority figures often change. At first, you are talking to client acquisition managers and business analysts. They are the ones to collect the information about the product and, sometimes, conduct the discovery stage.

During the project, the client cooperates directly with the Project Manager. The direct involvement with developers and testers depends on the vendor and the contract. Some organizations prefer to conduct all communication through PMs, whereas other teams allow direct contact.?

Your outsourcing vendor should be an active decision-maker on the project. You are paying not just for technical expertise but also for analytical context. It’s your right as a client to know why any change to the functionality was made and what benefits it brings to your business.

Vendor capacity and availability: skills, practices, experience

Outsourcing is not a heavily controlled field - in many cases, you have no way to know if what the team claims are valid. Often, the choice boils down to intuition and prior experience.

Here are some specific actions you can take to make things easier.

1. It’s best to have a third-party perspective on the hiring team.?

Find a senior developer you can trust and ask this person to evaluate the skills of an outsourcing vendor and expertise.?

2. Interview developers directly.?

Teams that limit your communication only to PMs prevent you from getting to know the fundamental skills of developers.?

3. Ask for links to a portfolio that you can click and examine.?

Case studies often describe the project and don't allow accessing it. Apps and sites developed by the team might not function anymore - if they ever did in the first place.?

Outsourcing scale/size: managing big and small teams

Estimate how many developers you want early on. You don’t want to constantly add team members once you enter the production. Be realistic in your estimates - you can’t expect 5 developers to carry out a large project independently. The aim is to find the right balance between quality and quantity.

An essential practice of successful software outsourcing is to discuss the practices of assembling the team early on. Ask how the team replaces sick developers, what are the conditions for taking someone off the team, how to add a new member, etc.

Big teams might require more management than one PM.?

The choice of a PM largely determines the project's success, so make sure you can interview candidates and get a complete overview of their experience. Criteria are rather obvious: experience in the field, a good understanding of the company, fluent English, flexible approach, and transparency.

The best practice for managing small and large teams is to discuss all the risks upfront. The team should not get flustered when they are asked “difficult” questions about contract termination, risks of underdelivering, replacing developers, etc.?

Here is an example of a risk estimate that your team could provide you:?

Creating and firming contracts: transparency, feasibility, agreement

Like any cooperation with a vendor, the collaboration with a software outsourcing team should be heavily documented.?

Let’s review the must-sign documents and best practices for approaching them.?

NDA

A non-disclosure agreement is signed between the client and the development team to protect both parties from privacy issues. It’s a legal contract that specifies the rules of access to the information that both parties share.?

Some companies prefer to keep information about cooperation entirely secret. In that case, the outsourcing team never mentions the organization in the portfolio, client pitches, or internal data. Sometimes, the regulations only restrict code access, innovation, and internal documentation.

Service Level Agreement?

A service level agreement is a document that specifies the detailed description of the services provided by the team, their metrics, benchmarks, responsibilities for each team member and party, and penalties for agreement violation.?

The SLA agreement is the client’s insurance during the cooperation. It defines your expectations and lists objective metrics and KPIs that are used to verify the quality.?

When you sign an SLA and NDA with a team, ask questions and details. The team should have a lawyer who will be responsible for the process. Make sure that the person in charge understands the specifics of your business and is aware of potential risks and challenges.

Ownership/IP

The non-disclosure agreement protects intellectual property and code ownership. The real risks lie in producing similar concepts, codebases, and functionality.

Of course, this problem is not at all unique to software outsourcing . Let’s see what you can do.?

Option 1: Hire a dedicated team and have them sign a new strict agreement.

It’s easier to impose control over coding practices if developers work exclusively with you. This is where the dedicated team comes in - you essentially hire an outsourcing team that will be working solely on your product.?

You can request an agreement that claims ownership over all the code created by developers while working on your project. It’s a fairly common practice, but practically, most developers would never sign such a contract.?

Such an agreement would discourage developers from developing anything that isn’t work-related. The consequences are likely to be disastrous - a developer will lose motivation, and skills will quickly deteriorate.

Such an agreement temporarily protects you while an employee works under your company. As soon as a person quits, nothing technically prohibits reusing the concepts from your software.?

Option 2: Modify the agreement with the entire team.

You can solve some IP ownership concerns by signing a formal agreement. In particular, these are two clauses you can include in your contract to protect intellectual property.

IP assignment clause: a section of the contract that describes what is considered intellectual property and how it’s generated. Note that this should not be publicly available data but something that can be known only to the company's insiders.?

Work for hire clause: when you hire a team, you can consider the results of the cooperation as the “work made for hire.” It means that the results of all cooperation processes are deemed to be owned by the hiring company, not by the vendor.?

Together with legal precautions, there are also technical and managerial solutions that you can use. The first best practice is storing and deploying code in your code repositories and on your servers. You should have the ultimate ownership and access to all data storage.

Also, in your service level agreement, you should discuss how the code will be handled after it’s been deployed. So, you need to ensure that all the devices engaged in production have some protection mechanism.?

Team location

The team location is a defining success criterion for IT outsourcing. Let’s talk about the criteria that you can apply when choosing where to outsource.?

1. The reputation of the market.?

It’s essential to recognize that no market is perfect. If a vendor claims that their region is the best and overlooks challenges, they should hardly be trusted.

2. Project requirements.?

Because all markets have advantages and drawbacks, rather than looking for a perfect market, focus on the most important factors to you.?

3. Time difference.?

Most affordable markets lie in uncomfortable timezones. If at least 50-60% of projects are done with the US clients, the team has to use methodologies for handling the time difference with the US.?

Overall, rather than focusing too much on a particular location, pay attention to the location of the majority of clients. Platforms like Clutch and Designrush that show verified reviews from clients are an excellent place to start. Your first step should be to examine teams with the most reviews and the highest rating.

Outsourcing frequency

Another management-related question that often bothers business owners and CTOs is: “How much outsourcing is too much?”

Discuss long-term cooperation possibilities early on. Ask about the team's experience with long-term projects, and ask to assemble a team with developers who’d be willing to be committed to the project.

Introduce the project properly. The critical part of establishing a healthy relationship with your vendor is to get them interested in the project. You need to know what you want - in terms of functionality, competition, goals to reach, etc.?

Communicate with the developers. If a business owner plans to collaborate long-term, it’s best to start treating outsourcing developers similarly to the in-house team early on.

When you build a relationship with a software outsourcing vendor, it’s important to remember that the team has its vision for growth. When the notion of partnership enters the game, a business owner should consider their own business goals and the aspirations of the outsourcing team.?

Coordinating vendors and in-house teams

Suppose a business owner already has a team of developers or a single senior developer that oversees the process. In that case, the challenge of synchronizing them with an outsourcing team will likely appear.?

Both teams should get used to the cooperation and take time to see objective benefits. It’s important not to micromanage the process - the entire collaboration should not add much more communication and management work.?

Best practices for outsourcing and in-house synchronization

1. Address concerns.?

If team members are feeling threatened, confused, or hesitant about cooperation, the first thing to do is talk these doubts out. Reassure both teams that collaboration is done on equal terms and for mutual benefit.?

2. Introduce PMs to each other.?

To make the transition smoother, you can connect with project managers first, and they will help both teams to ease into cooperation.

3. Have informal meetings.?

If developers only talk about the code and management practices, the tension will quickly escalate. It’s essential to take the discussion out of the realm of the project and have a couple of informal meetings.?

4. Apply different expertise.

It helps appreciate similar views and paradigms. Teams can understand mutual strengths better when they are handling an unfamiliar process together.?

Technical risks

While management risks are mainly discussed, outsourcing development can lead to several technical issues. New development practices, skills, and methodologies lead to conflicts and end up in an inconsistent codebase in the worst-case scenario.

Security and reliable performance

The most common complaint about software outsourcing quality is that not all teams can produce software that works. So, what can a business owner do to prevent it from happening?

1. Deploying changes continuously.?

If the team constantly rolls out the updated code, business owners and members can see errors right away. Mistakes in the codebase won’t pile up.?

2. Establishing clear code quality KPIs.?

By measuring a stability status, the team can keep track of failed builds and catch issues in time. Analyzing code coverage is an excellent way to ensure that all functionality was properly reviewed before deployment.?

3. Scheduling days for reviewing tech debt.?

Outsourcing developers might be reluctant to clean up code legacy because they are not invested in the project long-term. So, rather than hoping for the team’s expertise, it’s better to turn refactoring into a regular practice.

Control over code quality

Businesses that hire software outsourcing teams sometimes struggle with inconsistency. The team doesn’t document code standards and refuses to follow the same logic. The code seems to work, but in reality, the codebase is a disaster waiting to happen.?

Below, you can find the practices for maintaining code consistency.

Creating wikis and documenting practices

Developers should create documentation where they describe terminology used through the codebase. They also should keep detailed accounts of the application's internal logic and keep the same structure for all features.

Establishing naming practices

Throughout the project, the team should use the same terms and write all such conventions down.

Separating codebase?

Even when a team builds a project with a monolith architecture, they still should draw a clear line between features and dependencies.?

System decomposition and interface

If business owners decide to divide the overall functionality between in-house and outsourcing teams, they are likely to face the issue of system decomposition. When the system experiences a division, all parties should understand the technical and business logic behind this decision.?

Here you can find the best practices for integrating subsystems.

Defining behavior standards for the whole system

It’s fine if teams build things separately, but the ideation should be done together. The teams should sit down and define standards for the system and make sure that respective systems correspond with these requirements.?

Frequently testing the joint behavior

Like with deployment, a gradual approach is just as welcomed in synchronization. It’s best to integrate small parts into the system so that issues in each subsystem are not accumulated.

Technology

The technology that an outsourcing vendor uses has to be compatible with your business goals and existing technology.?

Here are the tips for choosing a software development company with the right tech stack.

• Choose the team with a focus. Work with developers who specialize in a particular technology or industry.?
• Ask teams why they have chosen a particular tech stack.?
• Project managers should explain how the technology will help achieve your business goals.
• Opt for a tech stack that’s compatible with your team's technology. Certain technologies can be combined easier than others. For instance, MongoDB , Express.js, AngularJS , and Node.js are often used together as parts of the MEAN stack.?

Process visibility

A transparent development process is built on regular tracking and communication. By using real-time trackers like Hubstaff or Toggl, you can keep track of the team's daily activities.?

How to assure transparency of development cooperation?

Use project management tools

Сommon platforms like Jira and Asana provide visibility on tasks, progress, and deadlines.

Set up regular governance meetings

It’s a standard practice to communicate with a team daily, although you can do weekly calls, too.

Set clear KPIs

Each task registered in the system should have a KPI and benchmarks.?

System re-usability and ease of maintenance

Unfortunately, vendor lock-in is still a common problem in software outsourcing. Both a client and an outsourcing vendor should work with the awareness that other people may later handle the code. So, everything should be explained and documented as much as possible.?

How to make maintenance easier?

• Developers who write functionality should know how to maintain it: engineers will be more responsible for writing good code if they are also the ones who have to clean it up.?
• Documentation should be treated just as seriously as development: this rule is valid for the team and business owners.?
• Ask third-party developers to look through documentation from time to time. To a person who wrote a wiki, everything can be transparent. However, an unbiased reader will likely misunderstand a couple of things. To see these weak points, get feedback.?

Verification of the ready product

It’s essential to think through validation and testing early on while you can still hold the team accountable. Don’t be afraid to prolong the contract if you need to.?

Here are the best practices for validating a product’s quality.

• Testing and Quality Assurance should be just as high-priority as development. All the management activities you performed for development must also be carried out in testing. Discuss with the team the practices for holding them accountable for malfunctions and errors.?
• Bring in some new people. It’s great if the same company handles development and testing. However, it’s good to bring several unbiased testers who can objectively evaluate the product.?
• Deploy and release before you let go of the team. While your contract is still valid, roll out a product version. Then, you’ll get a user report and see an accurate picture of your product’s performance.

The full checklist for building outsourcing cooperation

What should you do if you are starting an outsourcing development? Here’s the infographic which will help you avoid the risks.?

Final thoughts?

With a suitable cooperation method, clear documentation, and an experienced vendor, business owners can quickly mitigate the risks of outsourcing development. As long as both parties are open to serious discussion from the beginning of cooperation, the collaboration will likely be smooth and productive.

Selecting a decent software outsourcing provider is not an easy task. If you have an idea for a current or new project in mind, contact our team . We will discuss your ideas and offer your organization a highly efficient development staff.