IT outsourcing services are part of the outsourcing methodology that involves outsourcing work or business processes of one organization to another distant service provider usually located in developing countries. Business commitment and payment depend on results achieved rather than time spent on the job. IT outsourcing offers highly cost-effective, fast and high-quality solutions. However, so many advantages do not come without some risks. Both partners must be aware of these risks and try to formulate strategies to overcome them.

Some of the main risks associated with IT outsourcing services are:

Security issues: The most feared issue associated with web development services and IT outsourcing services is the security risk. Customers trust their development partners with all of their sensitive and business-critical data and information. If this information leaks to competitors or is misused by someone, the results could be catastrophic for the customer. However, most of the reputable service providers have very secure data security measures and protocols in place at their development centers.

Trust issues: Some self-knowledge and competitive advantage are always included in developing solutions. Customers must provide this knowledge to their development partners to obtain the most effective solutions for their requirements. This also carries the risk that the provider will misuse such information in the future. Proper non-disclosure agreements must be formulated and signed by both parties to prevent such things from happening.

Regulatory Matters: Health and financial services organizations take a huge risk by outsourcing their services. The service provider has access to the information of its clients that can be transferred to third parties interested in it. The organization will incur heavy financial loss and will also be in trouble under regulatory laws. Various US laws place responsibility for such events solely on US companies. Organizations can simply ensure that they are partnering with the trusted development partner with a proven track record. It would be much better if that critical work is done in-house or sensitive data is not provided to the vendor.

Quality problems: The expectation of a high-quality solution is the most attractive feature of IT outsourcing services. However, Good quality is a relative term, which means that a given solution may be of high quality for the provider, but not good enough according to their quality standards. Cultural difference and poor communication are two important factors for such results. Organizations should carefully assess the supplier’s quality standards before offering their projects to them. Also make sure that proper communication takes place throughout the development procedure, as most solutions are not as good as expected due to lack of communication.

Hidden costs: Some of the providers quote low prices at first and start asking for payment for undisclosed services. This is a bad practice that customers should be aware of and try to stay away from such organizations. Also, discuss the cost of the project in detail before closing the deal. Ask them directly about any other costs that may arise in the middle of the development phase of the project.

IT outsourcing services are very helpful and beneficial if proper care is taken in hiring the software development company. Whether you need web development services or business application development services, your choice of service provider will be the most critical decision you make during the entire development process.