Common IT Outsourcing Challenges Faced by Companies & their Solutions
1. Trust Issues with your Outsourcing Partner
Working with a company that is located overseas does bring in some trust issues. And quite frankly, this a very valid concern. Simply because the success of your project would be in the hands of your offshore team.
So, what's the way to find the best IT outsourcing company that has the tech and domain expertise you require, fits your budget, guarantees on-time delivery, and can rely on at every step?
Collaboration with a reliable outsourced development team is the solution.
However, the first thing to do is to clarify what has to be done. Understand your business KPI’s and the reasons for which you are outsourcing IT services. Once you are done, the research work comes into play.
It is a must to perform in-depth research on the offshore development companies, before getting in touch. Though it is not possible to do so for weeks, the best way is to check out some B2B rating platforms for creating a rough list of top outsourcing companies.
As soon as you have the list, it's time to get in touch and make a decision.
Select the Company Based on the following:
The maturity of the company: For how long it has been in the marketplace.
The number of long-term projects it has dealt with and the total number of successful projects.
Evaluate the company’s website carefully. Why will the company make something valuable for you if they are unable to do something good for themselves?
Social media presence of the company on different platforms like Facebook, Instagram, etc.
The knowledge-sharing process and technical skill development within the company. Company’s participation in different events.
Have an overview of the companies ranking & reviews on popularly known platforms like Clutch.Co, TheManifest & Good firms.
Case studies inclusive of the client overview, cooperation history, client issues, challenges, solutions, and technology stack issues.
2. Outsourcing for the First Time
If you are outsourcing for the first time, then it is important to understand the process. It includes defining your product vision, development stages, time to market deadlines, and the need for further maintenance.
After finalizing your outsourcing partner, set up clear and realistic expectations for your offshore development team.
Expect your outsourcing partner to walk you through the entire process during the initial discussion. In fact, it would be advisable to get in touch with your dedicated offshore developers and discuss your requirements in detail.
If your team is clear about your vision, objective & goals, then achieving them becomes easy. It would help them to craft an effective product development strategy and project charter to fulfill your end goals. Also, ask them to stay consistent about the regular project status update, in advance.
On top of that, your team will introduce you to the latest technology and whatever is trending in the industry. In short, they will ensure the adoption of best standards and practices for the development process.
3. Are you Technophobic?
Being clear about the technical requirements is crucial while outsourcing. In case you are not a tech-savvy person, things may become complicated for you. In this case, you can onboard a technical manager on site as a point of contact between your company and the offshore team.
Let's say you are planning to launch a mobile app for your business. In this case (where you don't have knowledge about the required technical stack), approaching a development team will become difficult for you.
Because a lot of technologies exist in the market for building a mobile app. For example, to build a mobile app, you may or may not need to hire;
- Front-End Developers with expertise in Javascript frameworks, HTML, CSS, etc.
- Back-End Developers with expertise in Java, Kotlin, Swift, ObjectiveC, Dart, Flutter, etc.
If you are aware about the technological requirements of your project, it would become easy for you to hire mobile app developers from an offshore country.
4. The Remote Development Company is either too Big or too Small
Among the common offshoring issues, companies face a challenge in finding the vendor of the right size. Either the remote development company is too small and is unable to scale up or down quickly. Or they are too big that they don’t take mid-size companies too seriously.
For an enterprise, any offshore company that is unable to staff 10-20 individuals is an issue regardless of their expertise. Whereas for any startup, collaborating with a large remote development team can be frustrating and they may not be considered important. Also, they may not get the attention that they actually require.
To address this challenge, you need to find a company with an appropriate size that will take your business objectives seriously. You may also need to choose the right country for outsourcing software requirements.
5. Outsourcing may be Risky
Outsourcing helps different companies to deal with the talent shortage. Working with a third party may be risky but there are ways to mitigate any possible risks.
- Loss of Control: No one wants to lose control of the project while collaborating with an IT outsourcing company. Manage the project equally and ensure everyone is on the same page. Train your in-house staff to efficiently maintain a relationship with the offshore product engineering team. Also, make sure that your company offers high communication transparency using a reliable tracking system.
- Data Protection: The security issue is significant when the project involves sensitive data. In that case, it is always good to conduct a background check. The previous clients will tell you how the company dealt with security issues in the past.
- Unqualified Professionals: A major problem occurs when an offshore software development company makes big promises but gives you a team of unqualified specialists. The major reason for this is, the lesser the salary of the employees is, the higher the revenue of the company. This unprofessional approach may bring poor quality results.
Here, the best measure would be to choose developers based on the interview, and visiting their office in person (if possible).
6. You are Doubtful About the Confidentiality
Whenever you outsource, you share confidential information like ideas and concepts. It is natural that you start worrying about the way your offshore partner will be handling security.
To resolve this issue, you have to choose an IT outsourcing company that stays compliant with international security standards. For the same purpose, do the following:
Ask if the company is comfortable in signing up Non-Disclosure Agreement
Ask if the offshore firm has any previous experience of working with sensitive data
And if they have completed any project in the industries similar to the one you work in.
It is also important to include all the necessary clauses regarding the safeguard of the proprietary rights and confidentiality in the service level agreement.
7. You are Afraid of the Legal Complications
Confidentiality, liability, data protection, regulation compliance, and intellectual property right; all these aspects may create certain issues in outsourcing.
As per the engagement model that you choose (whether it is a fixed model, time & material model, dedicated engagement model) the terms will vary. Every model has different legal terms. So, having in-depth knowledge about them is crucial.
Recommended Read: What Makes Dedicated Team Model the Right Choice?
Another important aspect to consider here is the country to which you are outsourcing. There are a few IT outsourcing destinations that strive to foster the benefits of IT outsourcing and create a legal environment that helps the company to grow.
On the contrary, others neglect to support the industry and create more issues for outsourcing.
8. Will you Get High-Quality Services at Affordable Prices?
One of the major reasons to outsource is the expectation of receiving better service from the remote development company. So, do not choose your outsourcing partner on the basis of cheap prices only.
Consider all the industry standards, frameworks, tools, and technologies that your offshore team follows. Find out what mockup tools, delivery process/methodology, tracking system, and quality software metrics they employ.
Recommended Read: How to Evaluate IT Outsourcing Cost? (For Better ROI)
9. Does the Offshore Company Comply with Rules & Regulations?
Have you wondered why it is so crucial for an IT offshoring company to be certified and comply with international regulations? Well, many outsourcing issues stem from the company’s failure to deal with the requirements.
Hiring the best experts and retaining them smartly are two important things. An outsourcing firm that has the best engineers, do all the possible things to retain them with the help of a sophisticated approach.
This attitude helps them to create a well-structured team that delivers exceptional results.
10. Looking for a Company that Fits your Budget
This is a good question. One reason why companies prefer outsourcing over in-house recruitment is because of the tight budget.
Whenever you are planning for a budget, make sure the company you choose doesn’t set unrealistic goals. To keep the integrity of the final product and make sure the cost remains less, avoid budget-draining mistakes.
However, the wrong choice of cooperation model, changing requirements, and poor management strategies may raise the cost and cause many issues. So, being clear with everything is the right measure to avoid this outsourcing challenge.
Source: 13 Common IT Outsourcing Challenges Faced by Companies & their Solutions
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