In our time, outsourcing and outstaffing are often viewed as exceptionally advantageous forms of hiring employees, which allow to significantly reduce the cost of maintaining employees and get a product of high quality. But is it so? As practice shows, outsourcing is not a winning solution for every company and every project. In other matters, even if it suits you, this is not yet a guarantee that you will not be hindered by difficulties. In this article, we will talk about how to avoid outsourcing risks and what biggest problems can arise when using such a form of work organization as outsourcing to know your enemy in person and take measures to eliminate possible negative factors in advance.
#1 Information Privacy Disturbance
Considering that today all business opportunities are open, for a successful enterprise to come up with an idea is practically the basis of all its success. In this case, the integrity of the vendor, its willingness and ability to protect the security of your information is of great importance.
In addition to the idea of the project, you should also take into account that if you hire an outsourcing team, a large number of your company’s internal information will be available to a wider range of people. In this regard, it is necessary to more scrupulously develop methods for internal information protection and to build labor relations so that each employee has access only to the information that is crucially necessary for their work.
How to protect the project from information leakage?
• History of projects. Each vendor has a portfolio of works in the development of which they directly participated. Analyze what kind of companies and projects they participated in. How did they deal with data protection? If the outsourcing team has a successful experience on projects where data security was of great importance, safely trust them the offshore development.
• Sign a non-disclosure document. This way should be used in case your project deals with objects of intellectual property or to support an oral agreement on non-disclosure of working information.
• Divide the project and introduce access levels. In order for people not to have access to information that is not required in their work, it makes sense to divide the project into parts of different access levels.
#2 Poor Quality Control
Many choose an outsourcing work organization model not only for reasons of economy but also in the hope that the vendor team will have specialists in the industry they need and they will be able to give them a product of higher quality than an in-house team. However, there are a number of reasons why the quality of the work performed by the vendor may be very different from your expectations. Among such outsourcing pitfalls are:
• Lack of experience in working with a remote team
• Inconsistency between customer and vendor commands
• Vendor work processes mismatch in quality standards
How to prevent the risk of poor product quality?
• Check the experience of remote teamwork both with your employees and with the outsourcing team. If necessary, hire a specialist with such an experience.
• Check the quality of the vendor work for compliance with international quality standards.
• Hire a quality assurance specialist to control and monitor the quality of work.
#3 Hidden Expenditure Outsourcing Problems
The other possible risks of outsourcing IT services are unforeseen increases in the budget required to complete the development. Although this is not a separate problem but only the result of other outsourcing problems, it also requires an early action. For example, if there are language problems, difficulties in maintaining quality standards, communication between the two teams, and so on, additional money will be required to resolve them. The only way to prevent this risk is to put a margin of safety in the formation of the budget.
#4 Fractional Business Analysis
Among the common risks of outsourcing, however strange it may sound, is that one can conduct an inadequate analysis of these very risks. In order to conduct a business analysis, it is best to use the services of a dedicated specialist – a business analyst. This person will examine the complete picture of your project, will be able to identify weaknesses and point out the areas of growth, and also prevent the manifestation of risks in every possible way. Also, the business analyst is responsible for creating project requirements and is directly responsible for the quality of the product.
If the business analysis was conducted unprofessionally, or only partially, or was ignored altogether, it could endanger the whole project. Isn’t this an excuse to take this risk with full responsibility?
#5 Imperfect Technical Documentation
If there is a document that can fundamentally affect the entire course of the project, it is certainly the technical documentation of the project.
• The bridge between the customer’s expectations and the product. It is this document that explains to the vendor what the customer wants to see as a result, the document that describes what the customer wants in the end. And any misunderstanding in this document can cause a complete failure since the project will initially develop in the wrong way.
• The ‘code’ of the project. Typically, technical documentation is developed with the participation of a business analyst, so that all the requirements specified in it become explicit, consistent, traceable, feasible, and so on. It is not difficult to guess that chaos and “lawlessness” will reign on a project where there is no qualitative specification.
• The measure of the project quality. When developing project documentation, remember that you will take the project for these requirements, so if they are not well-written, then they are unlikely to be properly implemented.
#6 Language Barrier Outsourcing Pitfalls
Even today, when the world has undergone an even greater globalization, by no means, not all the outsourcing developers have fluent English (or other foreign languages, if necessary). It is very important for technical specialists to understand each other, as they have to solve difficult tasks every day, and the future of the development and the project as a whole depend on their decisions. And to find a common language is difficult for specialists who are in different parts of the world even if they speak one language. Therefore, the success of your project needs to cooperate with people who have experience of interaction with a remote team and a high level of English proficiency. In addition to avoiding delays in work and downtime, misunderstanding, erroneous actions, it will also help to keep in touch and monitor the implementation of the project with the help of the same daily meetings, for instance.
#7 Time-Zone Risks and Incoordination
Of course, if you want to cooperate with an outsourcing company that is located in a different time zone, you will have to adjust your working hours to the schedule of their work. But you also need to understand that in addition to simple inconveniences, this can entail material waste, too. In addition, the time difference significantly affects the communication of two teams, which also harms the quality of the product.
There are two ways to solve these outsourcing problems:
• To put an additional reserve in the budget of the project, in order to avoid unforeseen expenses for the organization of communication between the teams.
• Organize the mode of work convenient for all participants in the development process (for someone the meeting takes place at the beginning of the working day, for the others – at the end, for example).
Summary: Outsourcing Problems
Of course, in any activity, there are both positive and negative features, such as outsourcing risks and benefits. In the case of IT outsourcing, the quality of development, the cost of implementing the project, the flexibility of the processes are positive. Its disadvantages include the difficulties in remote work organization, the complexity of synchronization over time, the language barrier and weak control of processes. However, with timely consideration of all risks, you will certainly succeed. Good luck with your endeavors and let the problems listed above never get in your way.