Running a business is all about managing risk, and risk is everywhere — especially when you need your software to start meeting greater market demands. Having an in-house development team expand on the potential of your product may be the ideal situation for many.
However, it’s not the only way. Teaming up with a software product development agency is a viable strategy, even though it comes with costs and benefits. Deciding on which basket to put your eggs isn’t exactly an easy choice.
So, let’s find out the risks and benefits of scaling your software product with a third-party team.
Benefits of Scaling with a Third-Party Team
One of the natural draws of outsourcing to custom software product development services for scaling is expertise. External development teams have a ton of experience thanks to working with so many different clients across different industries. As a result, their specialized knowledge can be valuable for you too. Their experience also means that you’ll see quicker time to market.
Additionally, an excellent software product development company will bring cutting-edge technologies, tools and frameworks to the table that your team might find difficult to acquire and master.
Going this route also saves you on a lot of other costs, like hiring, training, and overhead. You can redirect those resources toward other aspects of your business. Instead of struggling to maintain and scale your software product, you’ll be able to focus on innovation and business development.
Risks of Scaling with a Third-Party Team
This section is why you’re here, isn’t it? The first risk that most people are concerned about is a loss of control over the development process. Day-to-day decisions slip away, and priorities and processes become more difficult to communicate. There’s also the potential for data security and privacy to be compromised. Even if you fully trust the team you’re working with, it adds another point of failure for data to fall into the wrong hands. This is especially problematic for industries dealing with sensitive data like healthcare and fintech.
The location of a software product development company matters. Time zone differences can dramatically affect communication speed and efficiency. Rice Business reports that a Fortune 100 firm saw a reduction in communication effectiveness of 11% due to time zone restrictions. Let’s not forget about languages and cultural differences either.
Ultimately, the amount of risk you’ll encounter when trusting a third-party team with your software scaling project is the team’s stability and performance. If they can accommodate your needs and overcome these barriers to entry, working with them can be highly beneficial. However, be careful about dependence. If you become too dependent on them, it will spell trouble if you can’t work with them anymore or if management changes.
How to Mitigate Risks When Working with a Third-Party Team
So, it’s true that working with an external software development service comes with risk. However, it may still be the best choice for your software scaling project. So, what’s your game plan to mitigate that risk? There are a few places you can start.
Communication
This may be one of the most important risk factors for working with an external software product development team. To deal with it, you have a few avenues of attack:
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Regular check-ins: talk to your point of contact in well-defined intervals. Make sure to communicate your expectations and ask questions about their progress.
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Project Management Tools: use project management tools like Trello and Jira to coordinate with the development team and keep an eye on their progress.
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Choose Strong Communicators: when looking for a development team, look for one with a strong reputation for communication and coordination. Outstanding software development services excel in this area.
Great software development services providers are familiar with all sorts of project management tools and frameworks. They aren’t locked into any one system when it comes to communicating with your team about their progress.
Protect Your Data and Rights
Customer trust is everything. Before you start working with software product development services for startups, establish security protocols and non-disclosure agreements. This will ensure that if the company you team up with is compromised somehow, you’ll still be able to protect customer trust.
Great development teams want to uphold their reputation — both yours and theirs — and protect your data. They’ll communicate with you directly about the steps they’re taking to protect information and maintain regulatory compliance throughout the software scaling process.
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Worst case scenario — your trade secrets, patents, and other intellectual property are stolen, abused, and transformed by competitors. Now, this sort of abuse is something that can ruin a development team, so it’s not likely to happen very overtly. However, this risk is exactly why you need to make sure you define clear contracts and ownership agreements. Your contract will also detail how you plan to handle disputes. Great development teams want to go out of their way to help you protect your IP. NDAs and contracts are the tools they’re looking for to help you accomplish that goal.
Make Sure They Check the Boxes
When searching for the right software development service, you need to make sure the team can meet your needs. A great place to start is with this checklist:
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Experience: does the team have experience with scaling projects similar to yours? Ask about their portfolio.
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Communication: how are they going to keep in touch?
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Define a check-in period.
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Who is your point of contact?
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Decide on project management tools.
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Check to see if their testimonials praise their communication.
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Are they able to work with you in your time zone?
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Can they overcome any language barriers?
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Data Security & Privacy
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Have them agree to an NDA.
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Create a contract to define IP rights and dispute resolution processes.
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Stability: can you work with them without becoming overdependent?
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Does the development team take time to understand your needs and goals?
Come up with your own checklist to add items that are important to you and specific to your product scaling project.
The Right Team
Any choice you make about your software product will carry risk. However, if outsourcing is the right choice to scale, choosing the right team should be your highest priority. Even very talented development teams may not be the best fit for you if they can’t accommodate your unique communication and strategic needs. The best software product development services companies will take the time needed to sit down and talk with you about how to approach your scaling project in a way that suits you.
