Those who are dealing with the Outsourcing of software products are aware of the risks involved in outsourcing. The companies treat outsourcing as a gamble. You must know that there are many pitfalls if you fail at making the right decision. At Matrix Marketers, we emphasize on putting your business in right hands, else it can get pear shaped.

In this post, our views of outsourcing, as we suggest that the software companies must equip themselves with sufficient knowledge before taking any decision.

Some tips about the outsourcing practices to avoid the most common pitfalls are listed in this post. These tips will lead you to a better decision-making process.

What should be outsourced?

The outsourcing process can be effective only if the workflow system of the outsourcing company is streamlined. The company should list the competitive advantages and core strengths which make them unique. Figure out the functions that define the company and business. Retain your control over things which your customers appreciate the most. Do not outsource the business process where you are a leader and can effectively manage. If you are having an increased demand or shortage of resources, before outsourcing, make sure that you are delivering the things in the safe hands.

Avoid outsourcing those processes which impact your customers directly. If your developers are overloaded with work all the time, then it is not a healthy sign of growth. If permanent hiring for the load sharing is not possible then, outsourcing is a good option to consider.

Be the master of your own Business

Your brand value on the internet is everything. Your website and your social media platforms are the lifelines of your online presence. It is seen that as a trend to follow,  organizations go for outsourcing their development work and commit a lifetime mistake by sharing the administration rights. Outsourcing your website and social media is not a bad thing, losing the ownership is. Keep control over your website by registering the domain on your own account. If you hand over the ownership to any designer, programmer or marketer; they can take it down anytime.

Even if you are already having a digital presence, do check its registrar control on www.whois.net. Never share the registry control with anyone. Even if your programmer asks for it, give him access through TeamViewer on your account and look at his actions.

Identify all outsourcing costs – Hidden costs as well

People decide to outsource some of their functions because they want to get the expert services at lower cost. Many organizations outsource to cut down the costs. When you find the in-house expertise development cost is way higher than outsourcing costs, you decide to outsource. Make a draft of your projected savings for the whole next year so that you can evaluate the performance on regular intervals. In beginning, you will face a difference between projected savings and actual savings. This difference is caused by multiple factors like time loss, adjustments etc. But, if the difference continues more than 2 months, you have made a poor decision.

You must negotiate for all hidden charges, even if they are one time. You must consider contract fees, legal cost and travel cost while making calculations.

These are few tips which can help you take right decision while outsourcing.

There is no simple answer to that question for all cases, but there certainly are some key considerations which will help you select the optimal solution for your case.

Control of core competency. Don’t outsource your core competency. If the software solution provided by you is unique don’t entrust it to outsiders of any kind. It’s like giving up control of your company.

Intellectual property content. Some country cultures have little appreciation for software as intellectual property. For example, 90% of the software used in China and Vietnam today is pirated. Near-shore and local outsourcing can be implemented to protect your intellectual property.

Technology level. Outsourcing can’t be adopted if you are planning to develop the solution for a complex business problem and you expect the perfect development of your project. On the other hand, if it is maintenance and testing on non-core software, use the lowest cost solution.

Cost factors. Companies in Asia and Eastern Europe can still provide direct cost reductions of up to 75%. In these calculations, be sure to include indirect costs of remote work, such as more project management, more travel, and less effective communication. The net may be less cost reduction than you thought.

Product or services. Once product software is written, it doesn’t take much effort to deliver it to customers. Software services involve the creation of tedious software processes for a specific situation.

Creative or operational. Creative products, like chip design programs, architectural rendering, or consumer games are not easily outsourced. The product which is large and time-consuming can be developed easily and can be outsourced. In all outsourcing cases, a detailed specification is required.

Conclusion

Outsourcing is a sensitive process and it should not be considered very lightly. Finding the right partner to develop your project the way you want is not at all easy. But looking at the agile and diversified development, outsourcing is the only way to grow as an enterprise and spreading the wings in international market. At Matrix Marketers, we thinks that if you find the right partner, outsourcing helps in building robust softwares.