The Key Risks Involved With Offshore Software Development

BUSINESS | 23 Oct 2019

There’s no doubt about it, offshoring software development can be majorly challenging and in many cases, yields less than desirable results. In fact, many projects fall victim to the same issues, often caused by an obsession with cost, a lack of proper due diligence and an eagerness to commit before weighing up all of the risks/opportunities involved. 

Choosing to offshore software development is a big decision and it should be treated as such, however, before committing to this strategic direction, you first want to consider the risks that could undermine your success. 

In this blog we dive deep down into the key risks that threaten your success with offshore software development. 

A Partner That Oversells and Under-Delivers


When it comes to initially engaging an external partner, the first thing you need to do is identify whether they genuinely have the capabilities to do the job. 

Do they have the foundations in place to deliver what they’re offering? How about the talent - can they really get the job done? Then there’s the infrastructure to consider too - do they have the systems in place to effectively manage and achieve the objective? These factors will all dictate how well the partner in question can deliver and will tell you far more about their capabilities than what the CEO/Sales team says to your face. 

To really get to the bottom of a partner’s capabilities and mitigate the risk of teaming up with a pretender, you want to interview key team members, run them through test environments and review their portfolio of previous open-source contributions. This will help you verify that the individuals in question can walk the walk and have everything they need to meet your expectations.

Company Cultures Clash Impacting Output and Relationships


Finding an offshore software development partner who’s culture matches your own is critical to developing a harmonious and productive relationship. Extending to everything from work style and expectations to processes and employee attitude, company culture has a major impact on the way a firm operates, both internally and with its external partners. As a result, it’s easy to appreciate why it’s so important to find a developer who fits in with your own ideology. Afterall, the partner is an extension of your internal team, so it makes good sense that they at least think, act and operate in a similar way. 

Companies that partner with a developer far removed from their own approach to delivery often experience major difficulties when it comes to building relationships and developing an effective communication dynamic. This then often undermines cooperation efforts and regularly leads to inefficient working partnerships, yielding underwhelming results. 

Quality Expectations Do Not Align


Mutual understanding is the key to any good external development relationship and it’s particularly important when it comes to quality. Both partners must have similar quality expectations from the start or the partnership is likely to experience problems fast. In many instances, clients fail to outline up front what they expect, and this then causes issues later down the line, as the unspoken misalignment begins to yield unsatisfactory results. 

Defining what quality looks like, how it can be achieved and the milestones involved to deliver are all essential elements to developing a good collaborative partnership. These must be agreed early and up front in order to ensure both sides of the partnership are on the same page. Timelines and costs for the delivery of the agreed quality must be clear too, this guarantees all involved understand what is expected from who and at what cost. 

Critical Deadlines Are Ignored or Missed


Deadlines exist for a reason. In many cases, they’re in place because other activities are reliant on the output, and so when a deadline is missed, it can cause majorly rippling consequences. As such, it’s important that external development partners have a clear understanding of time expectations and align accordingly, being concise and detail-oriented on what they can and can’t deliver before the project is agreed is essential. 

To achieve the necessary timeliness on project delivery, regular feedback loops are essential. Clients must be responsive and review output with the necessary urgency to meet deadlines. To help ensure all parties understand timelines and priorities, daily stand-ups and weekly/monthly reporting must be agreed, implemented and adhered to. This is the most effective means of developing a successful remote collaboration relationship. Remember, process, process and process is the key!  

Unexpected Costs Arise


Software development is a costly business, and so it’s important to scope and agree costs up front, ensuring there is a detailed understanding between both sides on where financial resources are allocated and why. 

For a successful offshore software development relationship, it’s important everyone involved understands what is and isn’t included in the allocated budget. This can then be referred to in the event unexpected costs arise. In addition, contingency plans should be in place to ensure the resources are available to cover mandatory cost additions. 

Without proper financial planning before the work begins, there is a risk of conflict that could undermine the relationship and create short and long term problems.

Offshore software development is a risky business by its very nature. With so many variables in play and often so much riding on its success, it makes sense that it’s a relatively high-risk venture, however, it doesn’t have to be. With a clear view on the risks involved, you can take measures to mitigate and reduce your vulnerability when working with an offshore software development partner. 

It’s worth remembering a good partnership requires two engaged and cooperative teams in order to get the very best outcomes. Many startups and enterprises alike have extremely beneficial relationships with external development partners, but these have been carefully cultivated and managed over time. It can be done, but it needs all involved to work together and at times, compromise for the benefit of all parties. 

Beyond risk management and planning, you also need to ensure you conduct the right due diligence before you choose a partner. It’s essential you find a team that not only meets your needs, but also fits with your culture and aligns with your objectives. This is absolutely key to not only building a productive development relationship, but seeing project success as well.

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