Risks In Outsourcing Software Development

IT Industry has been one of the drivers of change in service sector

. The evolution has also been rapid with practices and beliefs of the industry, especially in the field of IT solutions and services, custom software solutions and software application development. The new era began with the rise of outsourcing and many custom software development providers mushroomed in various low-cost IT destinations. Outsourcing of software development has many specific risks that should be addressed before entering into this model. Some of them are as below:

Information Security

Lack of proximity to staff

Uncertain Output

Increased complexity of management

Information Security: Over the period of years, software development companies in India and other such outsourcing destinations have experienced growing concern of their clients in security of their information, especially in custom software development services model. The first thing that custom software development provider tends to assure a client in is the secure handling of essential information about client"s core business process. Unfortunately providing a total security is difficult task.

Lack of proximity to staff: In in-house software development, the developers" team has constant and easy access to all the employees involved in the software project. However, in case of outsourcing software development, especially in offshore model, it is inevitable to specify technical requirements in detail and constantly update them. This increases technical and management overhead.

Uncertain Output: While the custom software solutions provider can have some guarantees of payment by way of contract, the client is uncertain about the deliverables. The delivered software can meet all the technical requirements, and in the same time it might turn out to be obsolete, or do not support some important technologies and standards that appeared during the development period. A sudden bankruptcy, changes in local or foreign legislation, political instability and other factor endanger provider"s income as well.

Increased complexity of management: Outsourcing is considered to be a solution to decrease complexity of management of the IT functions. But often management of outsourced software development project suffers from a bad judgment, over-expectations from the Software Solution provider, ineffective risk management to name a few.

by: avani

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