Almost every start-up needs some sort of technology, but not every founder is a coder or went to school with a bunch of computer geeks. If you need software that isn't already commercially available, and you're wary of trying to produce it within your company, outsourcing is another option.
Outsourced software can save your company time, money and aggravation, but it isn't foolproof. Here are three common mistakes that can trip you up, and 10 steps that will set you up for success:
Unrealistic expectations. When a smaller organization outsources its software development, management too often assumes that the new outsourcing company can do it all - with little or no oversight needed.
Poor communications. Outsource development companies tend to be very good at technology - and may be either good or bad at communicating.
Misaligned interests. The outsourcing company and the client are not always working toward the same goal.
So how can entrepreneurs successfully outsource software development?
10 Steps to Success
1. Deﬁne and create clear standards. Always develop and discuss a detailed plan with your software outsourcing company. This should include key targets, milestones, deliverables, timeframes and overall business objectives.
2. Find the right cultural fit. Consider the implications of choosing an outsourcing company in the United States, in a nearby country, or around the world. Factors such as time zones, culture, and language can impact your relationship.
3. Visit. Spend time at your outsourcing company’s offices. Meet the project team and find out how they work together - and how they will work with you. Understand the process the team will use to track the project and communicate with you on a regular basis.
4. Investigate personnel statistics. Avoid companies with extensive employee turnover. Insist on finding a project team that has worked together, consistently, for a reasonable amount of time.
5. Check references. Speak to your prospective outsourcer’s customers, preferably other companies in your industry or those that have used the same services.
6. Make a detailed calendar. Create mini-deadlines within the project and mandate frequent, scheduled updates.
7. Adhere to the law. Ensure any outsourcing relationship meets regulations, privacy laws, and industry-speciﬁc rules such as HIPAA.
8. Assess business expertise. Seek a partner that understands your business, not just the technology. An outsourcing company that understands the business case for the software, and how it will be used on a day-to-day basis, is in a better position to create a superior product.
9. Be open to further help. Consider ﬁnding a software outsourcing company that can provide value-added services such as business advice, ﬁnancial consulting and marketing expertise, in addition to traditional IT outsourcing. Not only does this reduce the number of vendors you deal with, but it can also create a partner that has a broad understanding of your business and a considerable stake in your success.
10. Focus on beneﬁts other than cost savings. Understand how an outsourcing company might impact your ROI by getting you to market more quickly, improving your customer service, or other factors.