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The Hidden Costs of Outsourcing that Every Client Needs to Know About

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Revealing the unexpected outsourcing cost that many clients may not be aware of.

Outsourcing is a great practice that allows clients to get access to a wide talent pool and receive a high-quality software product at an affordable price. In order to retain a maximal value from the collaboration with an outsourced software development team, one needs to know not only about its benefits but also about the hidden costs that may come unexpectedly throughout the development process.

The cost of implementing changes

Unexpected changes in requirements are inevitable in any software project. There are just too many factors that impact their occurrence: the client’s change of mind, the decision of stakeholders, the possible changes in the market requirements, a need for additional features, etc. All that leads to the necessity to add extra features or change the existing ones - and this means additional costs.

Unfortunately, many clients overlook the real cost of such changes. Some of them think that the change implementation comes included in the project estimation or they do not understand the potential scope of work that is needed to add these changes. 

In addition, any new thing that is proposed for inclusion in the project will most probably lead to the deadline shifts and confusion unless the change management process is organized correctly. This also needs to be considered when proposing any new features.

The key thing to remember: extra features equal extra resources and hours, hence, leading to higher development costs. This is one of the most important things to keep in mind when planning the development of a software project.

The value of business analysts, QA engineers, and Project Managers

When assembling an outsourced team, many clients overlook the importance of such roles as a business analyst, project manager, and even a QA engineer. Thus, when there appears a need for these specialists, a client may be surprised by an unexpected cost for their services. However, due to the value that each of these professionals brings to a project, it is recommended to plan the inclusion of these team members in advance and plan the budget correspondingly. 

Quality Assurance

Any software project requires QA and testing. It is impossible to “create a project in such a way that everything functions perfectly”. There will always be human errors, minor bugs and other risk factors that will eventually impact the performance of a product. 

This is why it is important to perform constant testing throughout the project development in order to ensure there are no bugs and everything functions in accordance with the requirements. As well, keep in mind that testing reveals not only issues with performance but also the product’s usability, its ability to cope with different load, and other important factors. 

Business analyst and project manager

The work results of these managerial positions may not seem as tangible and visual as the developers’ work but that does not mean that you don’t need a BA and a PM.

A business analyst is a person who analyzes your project and its requirements and comes up with the most suitable and efficient solutions. Without a BA, it will be much harder to estimate the hours and deadlines and formulate business goals.

A project manager is responsible for managing the whole project, including the assignment of the right specialists to the right tasks, management of the budget and timeframes, seamless and transparent communication between the involved parties. Without proper project management and analysis, a client will most probably experience the following problems:

  • Misunderstanding with the team

  • Confusing requirements

  • Missed deadlines

  • Incorrect allocation of budget and resources

All this will inevitably lead to the growth of the final project cost so it will be a better decision to invest in knowledgeable specialists at the beginning in order to avoid serious issues in the future. Because these professionals take care of managing the requirements and watching the quality of the delivered results, their work will directly impact the compliance of the project with the deadlines and the level of the users’ satisfaction with the final product.

The cost of keeping the software product up to date throughout the development cycle

While the product is undergoing development, the updates of the OS or the development tools may be released. And that means you will need to update the product correspondingly so that it functions without any bugs or delays which is especially relevant for mobile and desktop products.

If the OS is updated, the app needs to be updated as well in order for it to run on all intended OS versions (as an example, different OS versions may have different requirements for the image dimensions). In the case of the development tools updates, you simply will not be able to work on an outdated product with new tools and this will result in multiple issues. Thus, when developing a software product, it is important to keep in mind the possible costs of future updates.   

The dependency between the requirements and the cost 

Project estimation depends solely on the client’s requirements. The clearer they are, the more precise the cost will be. And this is one common pitfall that many clients tend to ignore.

We already mentioned the importance of the business analyst. This specialist helps the client better formulate the requirements based on the analysis of the future project, its potential, strengths and weaknesses, competition, market demands, and other factors. Hence, the creation of clear project requirements is an absolute must if a client wants to receive an accurate estimation and get a clear understanding of future spendings. Otherwise, blurred requirements will lead to questions and issues throughout the development process, causing the BA to do the double work which, in turn, will increase the development costs.

The cost of the needed subscriptions and tools

One more thing that the clients need to remember about is the potential cost of the needed development tools (i.e.libraries) or the cost of any needed subscriptions like Apple.

In order to work in a faster and more efficient manner, developers use ready development tools like libraries and frameworks. While most of them are available for free, sometimes there might be a need to buy a certain tool to resolve a specific issue. Thus, a client should be ready to spend a bit of extra budget on the purchase of these tools or the necessary subscriptions (for example, publishing an app on the App Store implies an annual subscription of $99).

Summary

Outsourcing brings numerous benefits to clients, such as:

  • Access to the wide talent pool,

  • An opportunity to find a specific specialist for a particular task/project,

  • Affordable cost (cheaper than in-house development),

  • Flexibility and high quality of work.

Therefore, if you learn about the above-mentioned hidden costs and take the necessary preventative measures, you will be able to enjoy the benefits of working with an outsourced software development team and successfully bypass the potential risks at the same time.

 

Comments

Alex

Great article! Thanks for sharing.