To cut costs, bring some innovation and a fresh perspective or, perhaps, to focus on growth and some core activities — there’s more than a fair share of reasons to outsource software development. Which is no wonder, you get access to world-class engineering gurus and add value to your company in terms of time efficiency and cost savings. But as appealing as it sounds, some problems of outsourcing come hand in hand with its benefits, especially regarding security risks.

The key to successful outsourcing is complete transparency and open communication between you and your software vendor. But before you establish a trust and partnership let’s look into some of the risks that come with IT outsourcing, namely the security side of the process.

What are the risks associated with outsourcing?

When the possibility of outsourcing developing is in talks, the potential risks and the issue of security as the main worry are one of the first things to come up.

Problems of Outsourcing: How to Stay Safe

Outsourcing software development is generally considered a risky business for the lack of personal one-on-one communication with people that are doing your work or the fact that you are entrusting your product to complete strangers. These problems of outsourcing are relatively easy to resolve by doing your research properly, seeking a partner with a transparent approach and establishing clear communication. Also, consider these 5 tips for successfully outsourcing software development.

The more significant concern we would like to address in this post is the security aspect of outsourcing. Trusting your newly found partners also means implications like copyrights, patents, trade secrets. Not to mention access to some sensitive information that can be gathered, stored and distributed.

But do not worry, there are ways to protect your business and intellectual property. Here are some of them:

GDPR ready

With General Data Protection Regulation being in full effect, the first thing you should be asking yourself — is your software partner GDPR ready?

You might think the new EU data privacy regulations rules only apply to you, the data owner, but it extends to the third party that handles your data as well. According to GDPR, you, as a company that seeks help from the outside, act as a “Data Controller” and your offshore partner is a “Data Protector”. It also means that not only businesses inside the EU fall as a subject to new regulations but also, companies that offer goods or services, or monitor the behavior, of EU data subjects.

Make use your outsourcing partner has taken care of their GDPR policy. Otherwise, working with non-compliant companies can cost you a pretty penny — up to €20 million or 4% or your annual global turnover, whichever is higher.

Being a full supporter of EU parliament’s decision and a proponent of data security, Perfectial has long ago taken care of the ways to protect our client’s data by:

  • Ensuring the security of our office data infrastructure and implementing data protection frameworks;
  • Using the anonymization and pseudo-anonymization techniques to de-identify data;
  • Updating company policies and consequently being able to handle subject requests within the timeframes introduced by the GDPR;
  • Assuming the Privacy By Design stance; our data processing activities, including re-engineering, are fully compliant with the GDPR;
  • Setting up new breach notification procedures and adopting the tools necessary to investigate data compromises within a 72-hour notification period.

Elaborate Contract

It cements expectations at the outcome of the relationships and serves as a record to refer to from then on. A contract should outline specifics about payment, creative and other rights, expectations and roles, as well as cooperation strategy. Lawyer review is vital before signing any contract.

If the vendor isn’t meeting your established quality expectations during a specific time period, the contract should provide you with the option to terminate your agreement. Setting a date when the contract should be up for renewal so that you can consider whether to continue or not.

It is better to consider the following risks in your legal documents before you proceed with technological implementation:

  • Delays or inability to complete declared services
  • Not meeting the service levels
  • Performance interruption or cessation
  • Violation of laws by the service provider that impact the customer
  • Intellectual property infringement or abuse
  • Failures in communications between the parties

Under NDA

Indispensable, vital, must-have, and required – all these epithets can truly describe the importance of a non-disclosure agreement for a software project.

An NDA is signed for protection of the client’s intellectual property and to prevent issues with outsourcing that might appear around original ideas that might potentially bring profit if transformed into software. It is important to carefully consider the definition of confidential information in an NDA.

Moreover, reputable software development companies usually have their own NDA policies and lawyers. So you’ll be offered a bilateral agreement. Such an agreement is needed in case of highly confidential corporate information that will be disclosed by the contractor to the client and is only a significant mark of mutually beneficial and respectful further cooperation.

However, with all due respect to NDAs, it should be asked for only when there are items worth protecting. First of all, it is considered a bad tone to put the slightest cooperation details under NDA. Second of all, it’s also true that reputable companies rarely have any interest in stealing an idea or competing with clients due to at least several reasons: both have different business areas and target audiences and would never ruin reputation they’ve earned for years for some vague perspectives.

Safeguard Intellectual Property Rights

Not less important than NDA provisions are ensuring that all rights to your software including all associated intellectual property rights are assigned to the appropriate individual or entity. Therefore, intellectual property matters should be undertaken before going on any outsourcing plan to protect your company’s intellectual property, while determining which functions are better to be kept in-house or outsourced.

Code of Ethics as an Implicit Agreement

Although there is no official code of ethics for the software developers like in case with doctors, there is a subset of engineering ethics and professional ethics rules applied to the design and development of software systems. Verifying whether company software-vendor has its own software engineering ethical code will guarantee developers in your potential team will respect you, respect the entire industry, and your customers. Here is a list we believe must be obliged:

  • Protect and backup data
  • Work under client value development approach
  • Protect written code by NDAs
  • Write maintainable code
  • Do not use illegal software to perform development tasks
  • Taking responsibility for our actions
  • Self-awareness and honesty about your own code quality

Trustworthy Equals Transparent

Trustworthy software business partners must be completely transparent with their potential and existing customers. In this case, transparency means being open, having no hidden intentions, and stand by their given word, without promising impossible.

Talking with all the stakeholders at the company you are looking at as an outsourcing partner will help to evaluate the internal integrity a company cherishes or the lack of it. Clear and straightforward language and answers will prove you are addressing a right company to become your reliable partner in future.

Keep Control over Outsourced Development

It is critical to constantly supervise the elements of your business you’re outsourcing. The best way to achieve the necessary rate of supervision but not impeding working of your new team is to have designated roles overseeing the customer-vendor relations. The responsible employees should be skilled managers who understand your corporate vision well and can monitor the outsourced activity to be sure it’s in line with what your company expects.

Final Steps to Follow

Shape your expectations, focus attention on critical matters, and make your final decision. Feel confident moving forward building long-term relations with a software service provider, clarify the following information:

  • Relevant outsourcing experience If the potential partner has relevant experience with remote relationships and can provide you with corresponding references – that is a big plus. Also, pay attention to best practices of communication and reporting.
  • C-Level executives You’re looking for technology experts, aren’t you? It is important to consider whether the company has someone who drives technology or product in-house such as a CTO, Director of Engineering, or Head of Product Development.
  • Flexility of HR Powerful Human Relations department with professional management is no less important than technical expertise within a modern software company. The ability of the software supplier to scale up and adapt to your exact requirements is very important for an outsourcing partnership.
  • Local presence Financial and legal aspects of work matter especially in the early stages of the outsourcing relationships. This will be greatly aided if the software development company has a local presence, registration, or an office in your country. Being ready to send specialists on site would be an additional advantage a software development partner can provide you with.

Delegating authority and control over present and future of your business is a demanding task but with due attention to the factors mentioned above, security problems of outsourcing will seem a foreign country and establishing strong relations with a reliable partner will be only a matter of time.