6 Common Risks when IT Outsourcing & How to Avoid Them
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You have got a killer app idea, now it is high time to start your outsourcing app development process. Outsourcing is often used in software development strategy as the best solution to reduce cost and bring in innovation without loss of quality. However, just like any other type of service, using third-party IT service providers can bear some risks that can sidetrack your project. How to make it go safely through the risks and climb to the top success? Your determination must be considered and deliberate.
Mobytelab™ has already provided some advantages of IT outsourcing. Now let’s examine the top five significant risks associated with it and find out how to effectively deal with them.
Below is the shortlist of the common risks
- Data security
- Hidden costs
- Time zone differences & language problems
- Loss of control over the project
- Quality guarantee
- Outdated methods
To check out in more detail, please continue reading.
1. Data security
For any types of businesses, when it comes to work with a third party, the first thing is likely to concern about is security. In IT outsourcing, how to protect your idea or code source is a common question, especially if your project involves extremely sensitive information. Even if your idea is not innovative or unique, who knows it can bring you great profit. you may not know if should still protect it. Don’t assume that all outsourcing mobile app development companies do it by default. Some countries are weak at protecting Intellectual Property Right.
How to ensure that your vendor is a reliable partner? Check out their security measures and ask them how they have dealt with security problems. Take case studies of the vendor and find out if they have handled sensitive information in the past. Selecting a certified and reliable service provider is a crucial factor in avoiding the risk of data security.
To be more careful, when signing a contract, you can put the source code into independent sections, then set limit access and control the right to share. Of course, every situation requires different solutions. At Mobytelab, we adhere to the intellectual property right and try to protect yours at all development stages.
2. Hidden costs
Though outsourcing is theoretically considered to be cost-effective, it is not always a guarantee. Your business can possibly be eaten away due to the incurrence of hidden costs that you are not aware of. A common mistake that companies usually have is to think understanding all the major costs is end-all for a cost-effective outsourcing project. They believe other costs are negligible. In fact, some hidden costs can blow away the cost reduction you expect from outsourcing your project. Instead of saving money, you will end up paying more.
Some of the common hidden costs are the cost of vendor search, contracting and bargaining, the cost of transitioning, the cost of managing vendors, the cost associated with unforeseen changes etc.
However, no need to be panic as most of the companies outsourcing for the first time face this risk. Now you know about these implicit amounts, you should take preventive measures before signing a new outsourcing venture. An ideal act is to carefully dig into evaluating all the possible costs, and see if you can or cannot afford to pay. You should do this at the early stage. Take extra time to find a trust-worthy partner and make a clear contract will also be some solutions. A wise preparation will help you get the maximum potential savings that outsourcing can bring to your business.
3. Time zone differences & language problems
The Internet has turned our world into one global marketplace which made the outsourcing process possible and smooth via the powerful communication system. In case you did not realize, communication is a decisive factor in outsourcing. However, there are still obstacles to overcome. Communication can falter due to the time zone and language differences. There are possible risks from misunderstandings if your development team is unable to communicate in your language, or at least, English. Time zone difference gets you delays for urgent requests and influences the project deadlines dramatically.
To avoid this risk, carefully choose a service provider who can guarantee that their team will be able to communicate to you in the preferred language. Actually, you can easily test their language ability and customer service through a short conversation.
Mobytelab™ uses an effective flexible working system that provides a great customer service we are always trying to reduce response time as much as possible.
4. Loss of control over the project
Losing control over the outsourced project is the biggest nightmare for businesses. This can be due to weak management or lack of communication. The key to facing this risk is to understand that your outsourcing project should be equally managed by your company and the vendor. Start with building effective ways of communication with your outsourcing team, constantly having a discuss, keeping track of your project and also ensure that your internal team understands how to handle the outsourced tasks. Managing a remote team is not an easy task. We recommend that you should have an executive from your internal team know how to manage IT operations and relationships with third parties. Weak management is the recipe for conflicts and failure.
5. Quality guarantee
Money saving should not be the only reason to outsource app development. You don’t expect for something cheap but useless, do you?
Once you find errors after the provider is no longer responsible, you take all the consequences. To avoid this risk, you should first assess the quality standards of the products and check it carefully as soon as you receive. One method to check out your vendor’s prestige is to do some research on feedbacks from their previous clients.
It’s undeniable that outsourcing is mainly chosen for its cost-savings advantage. But sometimes you can get much more than just a good price. Vendors with client-oriented can provide you more than you have asked for.
Our company would like to offer our clients technologies or solutions that we know would be better and bring best results for their projects, while they still help to save resources.
6. Outdated methods
Obviously, you want the end result of your product to be on par with the most current international quality standards. What if your vendor is technologically behind you? Remember, customers are picky and quick to trends, and technology does not wait. If your vendor’s skill does not advance equally, you will end up receive a product with outdated UX and UI, which cannot delight your customers.
Fortunately, our company have the resources and mind that always keep up with the trend, so we can provide best practices for your business.
To sum up, in IT outsourcing, the most common and serious risks associated with outsourcing are those that affect business continuity, operations, transactions and the confidentiality of information. This article here is to help you be aware of hidden obstacles so that you can get full benefits from outsourcing. With the right team, strategy and management, these risks can turn into additional advantages. Find out what we can help and tell us what you aim for.
Mobytelab focuses on software consultant, product design, UI/UX design, web & mobile application development and ASO.
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