Our colleagues often ask why our company is not involved in software development outsourcing. An endeavour that traditionally generates more revenue for service providers due to higher rates. So we considered the question and decided to illustrate a number of reasons why we opt to forego the IT outsourcing model and favor the outstaffing model instead.
Unpredictable Timing and Budget
Outsourcing offers a detailed Level-of-Effort document (LOE) and provides three scenarios of its development. But in actuality, none of these scenarios might pan out in the end. We hear client complaints constantly. Such as how project durations are extended to accommodate unlikely scenarios and consequently inflating product costs double or threefold.
When a specific time and budget with your outsourcing partner is established and developers finish the project ahead of schedule, there is no incentive to disclose completion to you. You might notice the project is moving in an elaborately protracted and sluggish rate. This might be the case with outsourcing providers as they deliberately stretch delivery frames to keep charging the customer.
Lack of Customer-Focus in Outsourcing
You may be offered limited points of contact but it is uncommon to interact with every member of the team. Clients often are unaware of the real situation. One senior developer might be balancing up to four projects simultaneously. As one developer confided, “If my primary customer discovered how little time I spend on their project, they would be shocked.”
Threat of Deceit
As there is little transparency throughout the development process, there is too much deception associated with outsourcing. If an outsourced vendor contracts a mid-range professional at $35 an hour, the reality might be that three junior developers are hastily rushing your project to completion. Even the developer’s real location can be concealed. These are common practices in outsourcing with varying degrees of ethical quandaries and legalities.
A Word of Conclusion
All these factors affect customer satisfaction and prompted our choice towards outstaffing. We strive to give our customers peace of mind and work in a transparent, open, and comfortable environment.
Despite the obvious disadvantages of outsourcing software development, there are still a glut of software outsourcing companies in the market. We feel that the customer should consider the services of both outsourcing and outstaffing and opt for the model that best suits their needs. More information regarding the differences between outsourcing and outstaffing available here.
This might be the case with outsourcing providers as they deliberately stretch delivery frames to keep charging the customer.
On the other hand, if you have well-defined processes and a proper management to handle the remote team, then you are welcome to stick with outstaffing.