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4 Tips for Not Getting Scammed When Outsourcing Software Development If you're in need of a contractor to provide this vital service, know the warning signs of a sketchy company.

By Jennifer Spencer Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

These days, more and more companies rely on software solutions to manage a wide range of important tasks. Because each enterprise may have different technology needs, however, they often require custom development to ensure that a software solution helps them accomplish goals and streamline work.

Of course, most businesses aren't going to have a top-tier software developer on hand as part of their current staff, and so need to outsourcing that work to a third party. This can certainly offer benefits, such as reduced costs and increased efficiency, but if you aren't careful, these relationships can fail and leave you starting again from scratch, or worse. By following some key guidelines, however, you can avoid getting burned.

1. Know Your Goals

As with any other outsourcing relationship, you must have clearly defined goals for what you want to accomplish before entering a partnership. What problems do you want your software to solve? What do you want it to do?

Your ability to answer these questions is crucial, because it will guide everything the developers will do. Without a clear vision for a project, they will lack the guidance needed to deliver a satisfactory solution.

Related: 7 Ways to Set and Track Goals for Maximum Success in 2022

2. Thoroughly Vet a Contractor's Background

You want to work with the best, and part of assuring that is doing thorough research to ensure potential partners are up to the task. Naturally, this should begin by researching how a company hires its developer staff and what their qualifications are. This may also entail researching what type of software they work with, and/or asking for referrals from past clients, but one particularly critical deciding factor is prior experience with projects along the same lines as your own.

As a blog post from Tech9 explains, "One of the quickest ways to see if you should work with a potential partner is knowing if they've worked on similar projects before. Experience within your industry is also something you should consider. If the developer already has [such] experience, or if they've done similar projects before, there will be less downtime learning the ins and outs of your business and more time getting good work done."

3. Be Thorough in Communication

Even after selecting a quality software development partner, your work isn't done — this task needs to be a collaborative process. You as the client will need to offer feedback and guidance to ensure that the final outcome meets expectations, and establishing clear communication guidelines is essential to ensuring that questions and other feedback don't slip through the cracks. As part of an article for Better Programming, Lee Ling Yang offers the following real-life situation that illustrates the importance of being thorough in this way:

"I sent my design feedback via email, but it got lost in the designer's inbox. The wrong designs trickled down to the engineers. Knowing the designers would give the engineers a walkthrough before building, I should have left my feedback as comments directly in the design tool. So when they opened the design tool, they would have caught the unread comments right before the wrong information got passed on."

A comprehensive approach to communication will help you avoid such mishaps.

Related: How to Find the Right Tech to Bring Game-Changing Growth to Your Business

4. Ensure That Data Security is a Top Priority

In 2021 alone, more than 22 billion records worldwide were exposed in data breaches, according to Risk-Based Security's 2021 Year-End Report. The same report detailed that the U.S. experienced a 10% year-over-year increase in reported data breaches during the year. What's important to keep in mind, however, is that many companies do not report when they experience a ransomware attack or other cyber threat, so the actual numbers are likely much higher.

This is a vital consideration when outsourcing software development. Depending on the scope of the work needed, you will likely be sharing confidential data with the developer, and the last thing you need is lax security on their end that exposes data to malicious individuals.

A developer's security measures need to go beyond using firewalls and ensuring that cloud-based systems have proper security configurations. The 2017 Grand Theft Data report from McAfee revealed that 43% of data breaches come from "internal actors," which means employees. Worse still, half of these incidents are intentional.

So, a security-minded software developer should train employees on how to avoid phishing scams and other security threats. They should also be mindful of intentional threats, taking actions such as revoking account access after an employee is let go.

Related: 4 Things Your Employees Are Doing Right Now That Are Compromising Your Network

The Right Partnerships Matter

Just as with any other business relationship, successfully outsourcing software development depends on finding the right partner, then effectively communicating so that you can collaborate. When you know what you want and can clearly convey it, your partner will be better equipped to deliver needed results.

Jennifer Spencer

CEO of Energent Media

Jennifer Spencer is the founder of Energent Media, a digital marketing firm for tech startups. She is passionate about helping brands leverage content to share their stories with the world.

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