I know that when any IT company starts to think about software development outsourcing process to offshore there may appear a lot of doubts. But it is important to keep in mind at least 3 main points and check it always with each your possible offshore outsourcing software development partner before taking the decision to cooperate.
Quality of development:
Most companies are seeking for stable and reliable long-term relations. They want the work to be done with the same high quality as if it is implemented by own in-house developers. But in reality they may meet drastically opposite situation with new offshore partner. I know from my own personal experience (I am the CEO of such type offshore outsourcing software development companies) that it is very difficult or probably impossible for company (for instance, IT company in USA or in Europe) to be sure 100% in development quality of possible partner located in India, China, Russia or elsewhere. But there are a few ideas which I believe could be useful. First what you can do is to get information about company in Internet, check the domain registration year (sometimes offshore companies give the information on their web sites that they have about 10 years of experience, but the web site domain registered just last year). Also it is important to clear divide all offshore outsourcing software development services providers for at least two types: developers groups and real companies with brand name and reputation. And you should to clear understand what type of company you are going to cooperate with. Developers groups are unstable and are not too reliable; it is difficult to check their quality level, since the quality depends on group’s participants. They are good workers for small scale of projects (USD 1000-10000). Their work much cheaper then real offshore outsourcing companies. Such groups appears every year and disappear again. But somehow they usually let everybody know in the negotiation project, that they are very stable and have been working for many years. I recommend to consider such types groups if you have small projects to outsource. It could be really cost-effective and qualified (if you chose right group). I do not recommend to consider such type of service providers if you have project with timeframe more than 3 months and serious budget. In case of troubles such group can disappear, or can seriously delay the project or can be simply not able to deliver proper quality software. It doesn’t always happen, sure, but that is what can happen. In order to minimize risks and get more guarantees I recommend to do any large project or ongoing development just with companies which have good reputation (good references and clients, good reputation in internet, old domain name). Keep in mind it doesn’t matter is this company from Russia, India, China, etc., anyway the current hour rate could not be out of USD 18-22 per hour limitation. If company offer USD 15 or 10 hour rate it is very important reason to feel doubt who will work on your project’s development. It is impossible to involve senior or middle+ developers in project, if it is sold for USD 10 for work-hour, for any offshore country!!! Probably I will make more clear explanation of net cost of development in offshore. It is low, but it is not too low. If you pay low price you at least have to understand for what you pay for, right? The price could be lower because of use of junior developers work instead of senior or middle level. Because you do deals with group of developers who probably works in the home and do not pay any rent, taxes and other necessary expenses which serious company has to pay. And I always start cooperation with new partner step by step, by discussing any issues, choosing mutually comfortable and efficient style of work.
Communication:
Communication is the second bullet point that worries most part of customers. Misunderstanding happens, when people speak the same native language, and more often misunderstanding happens, when people are from different countries having their own culture and style of communication. It is not enough just to be able to speak in English for your new Offshore Development Center (service provider). There should be system of communication based on suitable software, such as issue tracking system, conference call schedule, Skype chat, MSN chat etc. Serious companies usually have good experience how to establish work proper way.
Source code security and intellectual property protection:
Source code security and intellectual property protection is the last essential point, which sometimes becomes the most important one. When company intends to outsource software development process and such software development should be based just on use of existing source code, which was created during past years, and when company’s software products are in demand at market, it is very important to keep source code and other information about customers intellectual property in secret! In such case I do not recommend to do any business with groups of developers since they do not risk there reputation and they are not able to guarantee any serious intellectual property protection. But serious software company always care about own reputation, care about source code security. For example, I, as the CEO, sign the contract with NDA with any my developers. I believe that it is right approach for any company. Ask you service provider about NDA with all employees!!!
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