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5 Things Startups Should Consider Before Outsourcing Software Development

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5 Things Startups Should Consider Before Outsourcing Software Development

It is not unheard of for startups to outsource some parts of their software development. There is a host of reasons why most startups resort to outsourcing rather than hiring an in-house software developer. The reasons could range from cost, the need for different expertise, a lack of time to develop the software alone, to the need to put the task in more experienced hands.

For whatever reason, there are key factors a startup should consider before taking the plunge into outsourcing software development. Below is a rundown of some of those key considerations startups should consider.

1. Nature of the Software

Before you outsource your software development to another company, it is important to understand if it is your key competency/competencies. (“Key competency” means are important qualities deemed by the company that an employee should possess.) The rule of thumb is that you do not outsource your key competency/competencies whatever the circumstances.

Entrusting your startup’s ‘secret sauce’ to a third party is similar to relinquishing control of your company.

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If the software is not at the core of your business, you may proceed to hire an independent software developer.

In the same vein, is the software operational or creative? Good practice is only to outsource operational products such as reservation systems or process automation— systems which may be large but mundane. For creative products like chip design programs, consumer games, or architectural renderings, do them in-house.

Also, is it a software product or a software service?

Software developers will agree that once a software product is written, it usually doesn’t need lots of effort and skill to deliver it to clients.

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Not so with software service. Software service is often customized for a specific need. Therefore, outsourcing service software almost always never works and needs to be managed carefully.

2. Technology Standard

Whether to outsource or not is also predicated on the technology standard of the software. If you intend for the technology to feature the most up-to-date technologies; to be scalable to handle many millions of users, and to feature multi-system failover and recovery, then you need to do it in-house. Don’t outsource. However, if it is simple software, opt for the lowest cost solution which is outsourcing.

3. Cost

Cost is among the most crucial considerations when it comes to getting any service or product. Outsourcing may provide you a cheaper cost depending on what you want accomplished.

When considering outsourcing, always think about the costs in the short run versus the long run.  Usually, outsourcing tends to provide better costs in the short run, but may not in the long run.

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You should also be able to identify what the other indirect costs are to see if outsourcing is the best option.

4. Intellectual Property Considerations

As you prepare to entrust your software development to a different independent company, it is important to understand that some legal jurisdictions have little, if any, respect for software as intellectual property. For instance, you may be aware that approximately 90 percent of software used in Vietnam and China is pirated.

Fortify your intellectual property against any theft and misuse by coming up with contracts and non-disclosure agreements.

 5. Ability to Get the Skills When They Are Needed

Most businesses need the input of a diverse range of resources and skills which you might not be able to acquire full time.

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For example, you might not be able to afford software architects, designers, and testers as full-time employees. The beauty with outsourcing is that it will permit you to access the resources when and as you need them.

Conclusion

If you have a typical startup and you agree with your co-founders to work on the first product without pay, that’s fine. Software outsourcing in such a case may not be appropriate.

However, if your firm is not software oriented and you need some software-related work to be done, you can consider outsourcing rather than hiring a team of software developers.

It’s for you to decide!

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Featured photo credit: Pexels via static.pexels.com

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Nabin Paudyal

Co-Founder, Siplikan Media Group

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Last Updated on December 18, 2020

Can Technology have Biases Like Humans?

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Can Technology have Biases Like Humans?

Technology has taken a vantage leap in providing solutions for man. Before now, technology used to appear complex and would require a great deal of expertise to handle solutions available. Today, we have technology applicable in the simplest human activities as smart products with intelligent algorithms powering them as they make error-free judgments and provide intelligent and analytic solutions.

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This article suggests that the process of creating technological solutions be made transparent and subject to contribution from many people who would end up as users of the product – male, female, young, old, learned, unlearned and all other preferences as we have them. It also underscores the importance of having women on product development teams. This approach is not sure to eliminate all forms of bias, but it is a good way to start in order to appraise the full benefits of technology.

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“Recognizing the problem is a start…success will depend on inclusive technologies that meet this vast untapped market.” This cannot be more apt especially at a time when we look up to technology for solutions. We should not muzzle our progress with technology by battling algorithm bias. The first way to avoid this battle is by reading this article here.

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