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May 31, 2022

Major Risks of Outsourcing Software and Web Development and How to manage it?


Key Takeaways:

  • Outsourcing will reduce cost and improve quality with their expertise
  • It elevates the benefits and profits of having an outsourced team in an organization or company.
  • Every business has its own risks associated with hiring, so it needs to cater accordingly. 

Outsourcing software and web development services to a remote or offshore team can be very rewarding and bring cost reduction to your business. It will be quite beneficial for your business and brings the following benefits:

  1. You will get direct access to the larger talent pool.
  2. It actually saves a lot of time.
  3. You will get fast with quality delivery.
  4. It saves you a huge chunk of money.
  5. As you reach the larger talent pool this eventually increases productivity.

Every coin has two sides. Thus, along with benefits, outsourcing software and web development services will also involve certain risks.

Here in this blog, we are going to highlight the major risks associated and will also discuss how to manage them. 

Top Risks of Outsourcing Software & Web Development 

1. Poor Communication Between Parties


Communication is the key factor associated while dealing with an outsourcing company. The risks that arise during communication are coordinating across time zones, working through language barriers, cultural differences, and other barriers that will affect work eventually. 


It is essential to establish a clear point person with the company you are outsourcing the work to. Do regular meetings rather than relying on the interpretation of reports. As a rule, it is better to communicate frequently at the beginning of a project to develop familiarity with each other, strengthening the bond and hence the quality of work. 

2. Settling for the lowest outsourcing bid


The stated cost of the proposal is not always the overall cost to your organization. If cost is the main factor, it is tempting to settle for the cheapest bid. Here you will consider the potential impact of a partner who hasn’t fulfilled the requirement in the past. However, the newcomers in the industry don’t truly understand what you need, and that’s why they accept the lower price.


Here, you need to read the contract carefully to make sure it covers all the services you require. In addition, you have to ensure that there is a mutual understanding of the deliverables that are stated in the contract. Mention everything that you require from outsourcing software and web development along with timelines and costs in the contract.

3. Hidden and uncertain costs


Finalizing the basic hourly rate is not a dangerous thing when it comes to IT outsourcing. However, software outsourcing will come with risks that are also connected with hidden and uncertain costs. 


A detailed agreement should be agreed upon before you start working with an agency. This agreement should outline the hourly rate, additional service fees, and the price of the additional work. 

4. Quality Drawbacks


In software and web development, the deliverability of low-quality content is one of the biggest risks every business faces.


Always check the quality before launching your software or website. If you are not able to check the quality on your own, you should hire an expert for it. 

5. Knowledge Transfer


While outsourcing software and web development services, the basic principle is to ensure knowledge transfer. The process works in two ways: The company provides all the information or the outsourced specialist delivers the code that is easily used by other developers. 


So, in this case, you must ensure that the work with the outsourced specialist will use an advanced tech stack that makes work easier to transfer. 

6. Weak Management


To manage an outsourcing software and web development team you need a strong project manager.


So, it is profitable to hire a project manager who takes the entire outsourcing software and web development team under control and efficiently.

How Hiring A Web Development Company Can Be Useful

However, Outsourcing is one of the most effective methods to reduce the cost and get access to a pool of talented software developers for expanding your business. WEBaniX understands the business goals and objectives precisely and helps to make a strong digital impression. Let’s get connected and discuss your project further.