Relationships are difficult to manage; as a business one of the most difficult can be the relationship with your software outsourcing company. If you need proof of this look no further than our article on the 20 risks associated with outsourcing offshore. However, software outsourcing remains important to any business looking to eliminate or reduce the amount of internal IT infrastructure, support staff and their associated costs. It is possible to achieve all this with an onshore company, but successful cooperation between your two businesses will be key to the innovation and growth of your product. Companies are likely to get smarter about insourcing in general, says Alsbridge director Mary Patry.
When it comes to outsourcing software, your inclination as a business can be to search for the developer who produces the cheapest software. This often results in companies turning to offshore software developers as they provide cheaper labour. However, this decision can lead to a variety of problems. For instance, outsourcing overseas can create legal concerns in regards to the lax enforcement of copyright laws. It also increases the potential for businesses to find themselves impacted economically by unexpected costs. In fact, some figures suggest the final sum up after offshore outsourcing will leave your expenditure 65% higher than estimated.
Therefore when searching for a developer, instead of looking for a cheap product to purchase, find the best company to hire. Of course, there is the possibility that the company you employ will also be the most affordable. But regardless, your priority should be searching for the business who can best comprehend your IP's product market fit and therefore help create the highest quality software. The higher the quality, the more likely your business is to succeed in the market and therefore generate better returns on your investment.
Many of the benefits of outsourcing can often be hard to notice and you can’t manage what you can’t measure. However, despite the difficulties it is just as important to measure the success of the outsourcer and MVP (minimum viable product) as it is to measure the success of your own business. Software developers however may struggle to measure their progress. This is where the importance of Agile development comes into play.
As a business and particularly for software companies, working in iterations is important to measure your successes and failures. An iterative process allows you to identify issues as you go and maintain flexibility in resolving problems. We recommend releasing forward to the end users at the end of every iteration to gaining feedback from users before measuring its success. From here you can identify further changes that need to be made to the software, this is shown in our Agile Iteration process below from Our Way of Working. This enables you and the software outsourcing company to work much more smoothly through a development process.
These days an average outsourcing company is unlikely to be enough to help you be successful in the market. As a business, what you should be looking for in your outsourcer is a partner not a vendor. While a vendor will view you as someone who will pay their bills once they have completed the tasks on their contract, a partner treats your business goals as their own. This means your outsourcer should be helping your company constantly innovate and improve. They should be an innovative company who is willing to capture and integrate marketplace advances to propel your business' competitive advantage.
In fact, more than 35% of businesses on a survey said they already measure the value of innovation in their outsourcing relationships. An innovative outsourcer these days will look to use market-disrupting technology such as cloud-based development, software bots, the internet of things and more. Merging traditional outsourcing and the innovation movement could offer cost savings for businesses who can learn how to harness this revolution, leading to increasing uses of outsourcing, even as it reinvents itself.
Overall, while outsourcing software plays an important role in improving the efficiency of your business, it is important to secure a company that will work with you as a partner and not as a vendor. Through considering these keys to a successful relationship with your outsourcer, you can build a better basis for business innovation and growth. For the best results, restrict your outsourcing operations to local partners (in the age-old debate on onshore versus offshore, onshore wins).