Niyamath Parveez

All about Outsourcing

Archive for March 12th, 2009

Outsourcing software development: For better or for worse?

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Software development is something that most companies are trying to outsource these days. It is chiefly because this field requires hiring of specialists in good numbers, resulting in quite an increase in the overall expenses of a company. Companies that are just starting up depend even more on outsourcing, because these organizations can seldom afford a team of well-trained professionals needed to build an in-house software development team. These companies seek out reputed offshore service providers to get there software development done at a fraction of the price needed to get it done in their home countries. This is true for most American and European companies.

The practice of outsourcing software development is, however, not without its caveats. The prospect of getting high quality work done at only a fraction of the price that would otherwise be spent can seem very lucrative to most startup companies at the beginning. However, in the long run, the inevitable cropping up of different issues can act as major concerns. Here are some points that outsourcers have to consider when enlisting the help of an offshore service provider:

  1. Small may be better – Small scale offshore providers do not always provide inferior quality service. In fact, it is better to be the major client of a small scale provider than a small client of a major provider. The former case will often yield much better result in the long run. The provider will usually pay a lot of attention to the client’s projects and may also end up providing small bonus services at times in order to hold on to the client. However, it is not always easy to determine beforehand the quality of service the provider is going to give. So it can be a gamble to some extent, but the risk is certainly worth it.
  2. Some security issues are unavoidable – Let’s face it, sometimes the outsourcer will be forced to disclose some sensitive data to the provider, in order to enable them to provide the service. This is risky, but sometimes inevitable. One way of working around it is to hire a small in-house team of experts that can take care of the core functions, leaving the bulk of the repetitive, low-risk work for the service provider to crunch through.
  3. Junior talent will dominate – Most small scale providers, and even some large ones, end up hiring junior developers with little or no experience, in order to save money. It is often hard to find candidates with even 5 years of experience in these providers’ offices. While these amateur developers are often eager to put in extra hours when needed, their knowledge levels will evidently be quite low. As such, they may not be able to handle some complex technical issues properly, which makes the decision to hire a small in-house team seem all the more logical.
  4. Cost will rise slowly – Even if the cost of service is low at first, the cost should be expected to rise as time progresses. The salaries of the inexperienced developers will increase as they gain experience, thereby increasing the cost of service given by the provider as well. One good side of it is that the developers working on the project will provide better service as well.

Thus it is clear that outsourcing software development, though seemingly a cost effective option, is not without its caveats. Fortunately, the benefits do seem to outweigh the problems in the long run, which still make it a viable option for startup companies, as well as companies operating with a tight budget.

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Written by Niyamath Parveez

March 12th, 2009 at 11:55 pm