Software outsourcing remains an ever-popular corporate strategy for organisations seeking to leverage external expertise and enhanced productivity in their software development projects. With software outsourcing expected to reach $430 billion in 2023, it is clear that such a model is increasingly being adopted by businesses worldwide. 

What is more, on account of the rapid growth of the tech industry and the ongoing digital transformation of businesses, it is hard to ignore the skills shortage that is pervading the technology sector across the UK and Europe. With this in mind, outsourcing to external providers might not just evidence your commitment to a diverse workforce, but it is rather a must-have tool to streamline business processes and facilitate growth. 

Nevertheless, like any other business endeavour, software outsourcing comes with its own challenges; overcoming these is crucial to ensure a smooth collaboration and a successful outcome. 

This blog post will underline the key challenges that software outsourcing process may pose and the best ways to avoid them. 

What Is Outsourcing?

Outsourcing is a practice whereby companies delegate software development projects to an external provider. Unlike nearshoring or offshoring, geographical location does not take centre stage, it encompasses both, and the main objective is to accelerate product development by harnessing the skills of a wider talent pool. 

Why Do Companies Choose to Outsource?

It is important to remember that companies outsource for a variety of reasons, taking into account their individual business needs and objectives. Below is a list of common reasons why companies opt for outsourcing: 

• Access to a bigger talent pool: Outsourcing allows companies to tap into a wider talent pool, rendering useful expertise from global markets.

• Increased operational efficiency: Outsourcing helps businesses expedite their product development and go-to-market timelines, which, in a highly competitive business landscape, ensures companies stay competitive and ahead of the competition. 

• Flexibility and scalability: Outsourcing enables businesses to rapidly adapt to changing corporate needs and differing market conditions. Instead of spending money and time maintaining an in-house team, outsourcing allows companies greater agility and resource effectiveness. 

• Focus on core operations: Some projects may not be worth dedicating time and resources to. With outsourcing, companies can focus their internal resources on core operations and delegate additional projects to an outsourcing partner which, in some cases, may have better expertise and infrastructure to carry it out effectively.  

What Are the Challenges Posed by Outsourcing?

Despite its considerable advantages, outsourcing may bring about some challenges that need to be acknowledged:

1. Communication Challenges

Effective communication is the foundation of any successful collaboration, and software outsourcing is no exception. With a remote approach and teams working in different locations, communication can be tricky to maintain at a high level.

Likewise, in the field of communication, it is important to ensure that the transfer of knowledge is effective and useful. With poor transfer of knowledge, you can risk project specifications being misunderstood and parameters ignored. 

1. Quality Control

Ensuring that the project matches corporate expectations ensures that a rigorous quality control mechanism is in place. Unfortunately, maintaining such a quality standard can be difficult when outsourcing, with the potential of limited visibility over the project and its development. 

Similarly, not all outsourcing companies will have the same standards to uphold as yours, and this can result in a potentially compromised quality output and, overall, less productivity. 

1. Finding the Right Outsourcing Partner

There are a number of outsourcing vendors who all offer the same (or at least very similar) services, and it is crucial to find the partner who best suits your requirements. Without understanding what the outsourcing partner can offer you, many important elements of the collaboration can be misconstrued – ambiguous project costs, parameters, and unfair negotiations, to cite some examples.

Another issue could arise if the outsourcing partner does not have the relevant domain experience. As attractive as their track record may appear on the surface, if it’s not in your domain then their developers may not have the requisite skills to fulfil your needs and drive business growth. 

1. Cultural Differences

Whilst certainly providing its fair share of advantages, the difficulties that could potentially arise from the cultural and/or language barrier could be problematic, especially if you opt for an offshoring outsourcing model. 

When we talk about cultural differences, it is also important to consider the working culture in that region, in terms of management styles, importance given to agile practices, or ownership. All of these small nuances combined can make up for a very different work environment than yours.

1. Security Concerns

If the outsourcing vendor is negligent with their security policies and handling of sensitive information, you could expose yourself to a serious breach of data. 

An outsourcing partnership would inevitably involve the exchange of critical company information and this could easily become compromised if your outsourcing vendor does not follow proper security protocol. 

How to Resolve These Outsourcing Challenges

Although the five challenges listed above could jeopardise the success of an outsourced project, with a deliberate and considered plan, they can be bypassed. The following list summarises the means to resolve the common issues faced when outsourcing your software project. 

1. Open and Consistent Communication

The problem of communication is perhaps the most significant; aligning your project’s requirements with the outsourcing partner will deliver the best results, but only if it’s effective. Some of the most optimal ways to foster a communicative relationship between client and vendor include:

• Establishing clear communication channels: The use of communication tools like Slack, Zoom, and Teams ensures that any important piece of information from either side is being addressed in a timely manner.

• Fostering a culture of frankness: It is always best to be honest, no matter what the issue may be. Create an environment where both parties feel comfortable sharing their thoughts and expressing their own beliefs in a candid manner. This way, any misunderstanding does not grow into a more troublesome problem and can be addressed quickly. 

• Defining communication protocols: Ensuring that the outsourcing partner are aware of any core working hours, meeting times, and deadlines before embarking on the project. Leveraging asynchronous communication platforms can also ensure that, even if time zones aren’t aligned, updates are shared and productivity is managed. 

• Documentation of outsourced projects: Before the outsourcing partner starts working with you, create a comprehensive plan that contains any key information. This could involve a SWOT analysis, product roadmap, and future visions of the project.

At Zartis, we place communication at the forefront of our collaboration with clients. There are always two points of contact (an engineering leader on the technical side, and an account manager on the business side) to ensure that communication between provider and client is seamless. 

We also schedule numerous meetings per week to gather any feedback and expect our clients to let us know if there is an issue, just as we would do on our end. One of our five key values is integrity: we believe that transparency in everything we do is essential for driving success. 

1. Rigid Quality Control Mechanisms

Without quality control, it’s hard to keep track of the outsourcing project’s progress which can lead to increased rework and costs, and low-quality deliverables that do not match the expected functionality. Yet, there are ways to protect this from happening, as listed below. 

• Establishing key points of contact: Again, it is clear that communication is the cornerstone of any successful outsourcing project. With key points of contact known to both parties, quality expectations can be swiftly set out, and any feedback can be addressed. 

• Defining quality metrics: Make sure that key quality metrics and performance indicators are documented and used throughout the lifespan of the project. This could include factors such as defect rates, adherence to specifications, and delivery timelines.

• Implementing robust quality assurance processes: These processes should be carried out throughout the SDLC of the project. This involves regular audits and general monitoring of the work being delivered. 

• Carrying out performance reviews: Conduct periodic performance reviews with the outsourcing partner to assess their adherence to quality standards. Use these reviews as an opportunity to provide constructive feedback, recognise areas of improvement, and tackle any persistent quality concerns.

• Defining escalation resolutions: It is important to establish clear escalation mechanisms, in case an issue arises. Outlining the procedures to resolve such disputes will ensure both parties can deal with the problem accordingly. 

Another of our key values at Zartis is quality; we always want to exceed the client’s expectations as we know that consistently delivering high-quality work will result in sustained long-term relationships. 

1. Optimal Outsourcing Partner

Finding the optimal outsourcing vendor is the key to unlocking your project’s success. As mentioned above, there are a number of outsourcing providers who will offer similar services. These are the traits to look for in a potential partner (as a general rule of thumb):

• A good track record: When searching for outsourcing partners, look at case studies and client testimonials to get a sense of the company’s track record. Make sure that they have demonstrated an ability to work with clients of your size in the past. 

• Relevant domain experience: No matter the company’s success in the past, if they don’t have expertise and knowledge in your domain they might not be optimal for your outsourcing project. Look for a vendor who has continually (and, more importantly recently) demonstrated proficiency in your industry. 

• Cultural fit: A successful partnership cannot just be measured in results. Whilst this should take precedence in most cases, looking for an outsourcing partner who matches your company culture ensures that the project is carried out in a way that’s as close to your ethos as possible. 

During our time working as an outsourcing partner, at Zartis we have partnered with numerous companies across different sectors such as fintech, medtech, edtech, e-commerce, logistics, marketing, and entertainment, among many others. 

We have worked with companies of all sizes and believe that our success lies in our transparency, and the fact that we constantly uphold our core values. 

1. Embracing Diversity

Although there could be cultural differences, by valuing and integrating diverse perspectives, your company and the outsourcing partner can navigate the complexities of outsourcing while fostering a collaborative and productive work environment. Below are some of the best practices to embrace a diverse workforce, and ensure a smooth outsourcing collaboration. 

• Foster an open and accepting culture: Ensure all employees have a good degree of cultural sensibility by encouraging both parties to share their cultural differences, leveraging the plethora of perspectives to enhance problem-solving and innovation, and uphold a strong team culture. 

• Address ‌language barriers: An outsourcing partner should cater to your needs and find talent that is not only a technical fit, but can also thrive in the culture. If there are language barriers, no matter how small, your outsourcing partner is there to filter those out and offer support where applicable in the form of training and encouraging developers to seek clarification.

• Implement cultural competency training: For both the organisation’s employees and the outsourcing team, promote understanding and empathy by implementing cultural competency training that allows everyone to collectively learn from the differences in a positive manner.

• Facilitate variable working hours: It is vital to have the infrastructure in place to ensure that, even if the outsourced development team is working in a different timezone, they have the capacity to effectively communicate with you. There are numerous tools available that allow widespread teams to work collaboratively, even if it’s not possible in real-time. 

At Zartis, we see diversity as another of our core values; it is our duty to provide an inclusive work environment where we allow different perspectives to inform our innovation every day. We proudly employ team members of over thirty different nationalities, and we have had experience working with a range of companies across the US, EMEA and LATAM. 

1. Stringent Security Protocols

 An outsourcing partnership requires a high level of trust, especially when working with highly sensitive information. It is essential that the outsourcing vendor has scrupulous security compliance; here are a few aspects to consider pertaining to security measures:

• Security certifications: When first searching for a suitable outsourcing partner, look for those with demonstrated compliance to security. Companies which have proved they are adept at handling sensitive information will often have been fully audited and will have certifications to support this. 

• Training: Make sure that any developer found by the outsourcing company fulfils your individual security requirements and has received the requisite training before they start working on your project.

• Uphold safe AI practices: Despite AI’s recent dominance in the tech sector, ensuring that no sensitive data is entered into AI chat boxes, or any public repositories, is vital. Ensure that developers working for you are conscientious, and do not input confidential code into these types of chat boxes. 

We take security very seriously at Zartis; we are ISO 27001 certified and ensure that all engineers working for Zartis receive professional security and GDPR compliance training. Our InfoSec team also ensures that the correct procedures are followed so we can stay perpetually ahead of the curve and, more importantly, secure in everything we do. 

We also have demonstrated a capacity to work in highly-regulated industries, where security compliance was at the forefront of our software development. You can read more about our partnership with Irish fintech giant FexCo here.

Key Takeaways

• Software outsourcing is a popular strategy to leverage external expertise and enhance productivity in software development projects.
• Outsourcing provides access to a wider talent pool, increasing operational efficiency and enabling flexibility and scalability.
• Challenges in software outsourcing include communication issues, quality control, finding the right outsourcing partner, cultural differences, and security concerns.
• Open and consistent communication is crucial for successful collaboration, using tools like Slack, Zoom, and Teams.
• Implementing rigid quality control mechanisms helps track project progress, define metrics, and conduct performance reviews.
• Finding the optimal outsourcing partner involves considering their track record, relevant domain experience, and cultural fit.
• Embracing diversity fosters a collaborative work environment, addressing cultural differences and language barriers.
• Stringent security protocols should be in place to protect sensitive data, including developer training and safe AI practices.

At Zartis, we build dedicated development teams, and we’ve been doing it for long years, so we know – and have seen – the common mistakes; with Zartis as a partner, discover the impact of a reliable and effective outsourced team. Start a conversation today.