For the past decade, outsourcing offshore software development is one of the latest trends worldwide. With the advancement of information and communication technologies, remote software development managed by offshore dedicated development companies has transformed several IT global strategies.
As software product development has shifted offshore, this contributes to the reduction of many businesses’ operational costs. Initially, this led to additional expenses during the selection of dedicated development vendor and other expenses during the transition of IT tasks to the outsourced offshore software development company. In recent years, many IT firms take advantage of several benefits of reduced costs and higher flexibility in offshore software development. This trend is expected to increase in the future.
Common offshore software development risks
#1 Data privacy and security risk
Issues regarding privacy must be a top priority for firms that involved in documenting and processing information like customer’s personal details, email addresses, and credit card numbers. During your research, verify whether your offshore software development vendor has reliable security measures in place. Look for a service provider that has solid security policies and a dedicated team to implement them.
Ensure that you agree on specific security protocols and non-disclosure agreements before sealing the deal. By doing so, you safeguard your firm’s data from potential infringement on security and privacy.
#2 Hidden charges or costs risk
Offshoring provides software development companies cost-effective benefits. However, when rushing in the selection process without sufficient validation, there may be hidden expenses that may be charged during the development stage. These operational costs can be a result of inevitable modifications that are needed for some potential adjustments in product development. It is highly advised to clearly discuss all involved costs and addenda with your offshore software development vendor before finalizing the agreement.
#3 Communication risk
In achieving expectations for outsourced tasks, this must always be backed by continuous and regular interaction between the offshore dedicated development teams and business owners.
For global clients, English is the main language employed during negotiations and project discussions. Although most people understand English, not everyone has the same proficiency in writing and speaking. Also, between parties, each should consider both cultural and local differences as they communicate with one another.
Throughout the project duration, it is necessary that offshore and onshore teams should always collaborate toward a common goal. To avoid conflicts or misunderstandings, always inform each other about what they are doing or any issues arising in the project. Optimize the use of emails, messaging apps, and other project management tools if there are potential problems that need clarification and in managing multifunctional groups.
#4 Organizational composition risk
Oftentimes, the structure of most American teams in the workplace is flat and more straightforward as compared to their offshore European counterparts.
When a specific team follows a hierarchical social structure, this might impact independent thinking, creativity, and may at times, limit soft skills. Although not all offshore providers work this way, these are common issues that need to be addressed at the initial stages.
#5 State regulation risk
As many global IT companies outsource their critical business processes, several legal issues may come up in the process. Before your firm decides to outsource, it’s vital to conduct due diligence regarding applicable laws on intellectual property and data protection.
Keep in mind that some governing regulations vary in different countries. When outsourcing, always note various legal systems that may apply with your service provider. Considering there are no standard legal laws to follow, it is highly advised to discuss all legal aspects with your offshore dedicated development team provider.
Ensure that your offshore vendor complies with all government guidelines and provide enough and accurate transparency initiatives whenever the company holds project audits.
#6 Service delivery risk
Regardless of the best intentions, an offshore service provider might have some shortcomings in providing the expected service. Although these may occur rarely, it can inevitably occur despite having solid technologies.
The offshore dedicated development team should offer high-quality services with minimal supervision. Select a reliable offshore vendor that can provide your technical and business demands as agreed.
Verify the vendor’s portfolio if they have the expertise in handling similar projects and assess the project’s requirements. These considerations can provide you an overview of your selected vendor whether it has the expertise and skills to meet the job expectations.
Offshore risk management: Weighing all factors
To identify whether offshore outsourcing is the best option for you, always consider looking at all the angles. Weigh the benefits against the potential offshore software development risks so you have an informed decision of whether outsourcing is best for you.
A successful collaboration involves well-defined project goals, experienced offshore service provider and consistent interaction among different internal and external teams. To remedy risks and prevent potential repercussions, all preventive measures must be in place prior to project commencement.