Building a dedicated offshore development team offers multiple benefits to a business. It’s a cost-effective way to hire the best tech experts and build custom software solutions. A recent study concluded that cost savings are the main reason to outsource for 26% of decision-makers, followed closely by quality improvement (21%) and access to scarce skills (19% ).
However, before initiating cooperation, companies should take into account the main risk factors and potential dangers that can take custom software development projects in the wrong direction. How to avoid these hidden risks?
Here are the 5 risks to avoid when developing a custom software plan that can fail your project.
Companies often run the risk of going over budget when they outsource software development. It is strongly recommended that you take into account additional costs for management, travel and other related expenses.
In addition, choosing the right pricing model that suits your type of project and your needs is essential. There are three options: the fixed price model, the time and material model, and the cost-plus model.
The fixed price model is the least flexible but the most transparent because everything is fixed in advance. The budget, timelines and scope of a project are defined before the start of the project, with no other changes allowed.
The time and materials model is best suited for companies that do not have a clear view of the end product. It allows you to add new features during the working process and make necessary adjustments. The final budget depends on the tasks, materials and resources used in the development process. To avoid a huge price increase, it is best to set the upper limit of the budget before starting the project.
The cost-plus model, also known as a dedicated development team, is most suitable for long-term and large-scale projects. It provides a high level of control because you can make all the adjustments you need in the process. The price includes the developer’s salary and the service provider’s fees, so you know exactly what you are paying.
Determine which pricing model will be best for your project by weighing the pros and cons of each beforehand. A transparent pricing system is an essential part of a risk-free work process and can save you from failing in your project.
You need to be confident that your future software solution will perform as well as if you had built it in-house. The dedicated development team must provide high-quality services without constant supervision. The code should be well structured, tested and optimized for a specific environment. So, you need to choose a trusted software development company that meets your technology requirements. Explore the case studies of a potential business partner to find out if the company has worked on similar projects before or in your industry. This ensures that the code will perform well, be easy to manage, and be followed by accurate technical documentation.
Risk of Misunderstanding
Your software development partner should clearly understand the requirements of your market and your target audience. To avoid delays in bringing a new product to market, unmet end-user requirements, or poor decisions during the project, take these preventative measures.
Explain your specific goals and end user preferences to a software development company. Share your company’s vision and processes. Focus on the business results you want to achieve. Presenting the product requirements document with the stated objectives and timeline will allow you to get software targeted and executed according to your expectations.
For example, if your target audience prefers a specific browser, state that before you start product development. This allows you to provide a user-friendly interface and solution. Create a well thought out and structured plan with your supplier to ensure that your project will meet its end goals.
Risk of Mismanagement
Managing a team remotely can be difficult, but you can achieve an organized workflow by combining several effective tactics. Well-established management is the basic strategy for avoiding risks in the software development process.
Your external and internal teams must remain in constant contact. You can use messaging, email, Skype calls, and project management tools to accomplish this. Agile and Scrum are two common tools in the IT industry. With their help, you can effectively manage multi-functional teams and provide them with the necessary feedback. Get bug reports, monitor tasks, and answer questions that could be critical to your project. Stay informed on the status of a project and communicate with your team members remotely.
Keeping in mind the different time zones, be sure to have regular meetings with your team and make actual visits. This reduces misunderstandings and allows for better coordination of the entire project. Your ERP system must be easily managed otherwise, complications can cause a lot of trouble.
Data Security Risk
It is estimated that the number of security breaches will reach 30% by 2021. Privacy is even more important for businesses with important data (bank accounts, intellectual property and patents, social security numbers, etc.)
That is why it is strongly recommended to sign the security protocols before starting the cooperation. Find a company with a clear security policy and security certifications. This helps protect your business, ensuring complete privacy of your information while collaborating. Make sure your business partner is protecting your valuable information.
To take full advantage of offshore software development, you need to be aware of all the possible dangers to avoid your project going in the wrong direction. In this way, you can build a reliable partnership and achieve successful cooperation with technical experts. An effective management strategy, clearly defined project objectives and regular communication are the components of a successful collaboration. Make sure you take all the preventative measures before you even start. This helps mitigate risks and avoid hidden dangers.