Outsourcing Software Development: What Are The Hidden Costs?

 

Do you want to outsource software development due to the potential additional expenses involved? Continue reading to discover ways to reduce this risk and explore Trustify’s software development outsourcing offer that ensures affordable collaboration.

Trustify recommended outsourcing services for Agile projects to keep up with early deployment and rapid software evolution. However, some businesses need more time to outsource Agile development due to the time and material pricing model, which can lead to a vague total cost and hidden fees.

Stay energized; this article uncovers the sources of hidden costs and provides solutions based on Trustify’s experience. We also suggest examining the pros and cons of offshore software outsourcing to maximize the information’s usefulness.

How do you manage hidden costs when outsourcing software development?

There are some different outsourcing models in marketing, but we can often see these two typical types on the market: resource-level and process-level. Resource-level outsourcing involves adding team members or hiring a managed team. Although this option may appear cheaper, it often comes with hidden costs due to the team’s limited expertise.

We already listed reasons for these hidden costs, including resource-based outsourcing, and explained how the process-based model is better for Agile projects. Process-level outsourcing involves self-managed teams that can overcome the downsides of resource-level outsourcing.
Some reasons that impose hidden costs

Some reasons that make hidden costs

The underperformance of an outsourced team

Poor performance can be identified by several issues, such as incomplete communication, uncontrolled project expansion, and increased technical obligations. Additionally, managing small projects may only sometimes be practical. One solution to this problem is to integrate a vendor’s project manager with the outsourced team, as this will provide a better understanding of the team’s progress.

Overwhelming modification demands

There will be a disconnect in understanding on both sides if the request is often changed for the Agile project. To resolve this issue, a supplier with business analysts (BAs) and user experience (UX) designers as part of their team can predict your requirements and offer a superior selection and ranking of features.

Bug-ridden software

When resources are outsourced at the project level, proactive testing activities are often left out to make it seem more cost-effective. However, this strategy can lead to roadblocks in the form of bug fixes that can delay the entire project. To avoid this issue, it is advisable to seek vendors that prioritize quality assurance throughout the development process. This includes incorporating QA from the needs analysis and requirements gathering phase through unit testing during development and ongoing regular regression testing and test automation during the testing phase.

Poorly designed architecture

Inexperienced developers working as a team, which often happens in outsourcing with limited resources, may make hasty and ill-considered decisions regarding the software’s architecture. This can lead to significant rework later on in the development cycle. To prevent this, it is advisable to engage a vendor’s team of experienced software architects who can design and improve the architecture effectively. To minimize the risks associated with resource-level outsourcing, it is recommended to opt for Trustify’s offshore process-level outsourcing services, which leverage mature processes and practices.

Don’t discuss your development needs clearly

Before choosing an outsourcing software development team, you must determine the hidden costs of process-level outsourcing. An organized process-level outsourcing that isn’t effective can also spend more hidden costs. That is why you need to verify a vendor’s competency. There are certain companies that provide an attractive offer but fail to live up to expectations once actual work commences. One way to ensure your needs can be transformed into software is starting with a Proof of Concept. This will allow you to asses the vendor’s work style and see if it aligns with your outsourcing model for software development.

Moreover, if you need to switch to another outsourcing provider, which can be expensive, it’s always better to prepare carefully. To safeguard your interests, consider drafting a contract (including the requirement details, description, tests, architecture, code…) that requires the vendor to keep all project artifacts updated and stored in a repository controlled by you.

Cost-effective methods

In the long-term objective, the best way to save cost is prioritize considering relevant expertise and service delivery approach than focusing solely on price when selecting a provider.

Trustify can manage all aspects of your project pipeline using our efficient work processes designed to maximize your return on investment and increase your turnover.

Conclusion

As you can see, outsourcing software development exists its potential risks and hidden costs but there are some ways to mitigate these expenses. Trustify’s software development outsourcing company in Vietnam offer ensures affordable collaboration with a process-level outsourcing approach and experienced teams that prioritize quality assurance and software architecture design. By prioritizing relevant expertise and service delivery over price, businesses can save costs in the long term and making lasting value together. It is important to carefully asses vendor competency before beginning work and consider drafting a contract to safeguard interests. Trustify technology can help manage your entire project pipeline with efficient work processes designed for optimized return on investment and increased turnover.

Source: https://trustifytechnology.com/en/news/outsourcing-software-development-what-are-the-hidden-costs/