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How to mitigate risks associated with outsourcing Dev Ops

Outsourcing development operations for software to countries where the input costs are less has been growing substantially in the past few years, but many businesses are starting to move their Dev Ops to a new breed of providers that are able to mitigate these risks. These risks include communication, cultural, financial, compliance, geopolitical and cyber security risks that can delay the project, incur unnecessary costs and potentially create reputational damage.

Miscommunication is still a large, frustrating and expensive risk. While many of the countries say they offer English speaking coders, there are still communication barriers where phrases, idioms, accents and dialects can hinder or lead to a delay or incomplete work because instructions are lost in translation. In addition, many service providers offer the roles to junior developers who may not have the skills set or industry expertise required to effectively roll the project out.
Cultural differences also play a role. An example is when working with an Indian development team, junior individuals often require permission from a supervisor which may affect the delivery timeline. In some areas a “yes” culture is prevalent where the answer may not be in line with the expected delivery deadline.
Not only is a delay in the project an additional financial cost paired with a loss for the client, but other budgetary items are also at risk of being affected. If a business in a foreign country has poor financial stability, then the risk of inconsistent service delivery can derail a project. Cost uncertainty from currency fluctuations can also cripple a well-meaning cost saving budget.

Compliance with the relevant standards applicable in the country where the supplier is located and those required for the territories where the business operates is paramount, including data protection laws and industry regulations. Not only do vendors need to be vetted to ensure that they are compliant but additional monitoring and auditing is prudent to ensure that these are being upheld.

Potential compliance risks are further aggravated by cybersecurity threats that are expected to rise in 2024 and outsourced vendors make up a part of this list. According to the Gartner Top Trend in Cybersecurity 2024 report, “Generative AI (Gen AI), third party risks, unsecure employee behaviour, continuous threat exposure, boardroom communication gaps and identity first approaches to security are the driving forces behind the top security trends for 2024”. If a third party Dev Op provider is not vigilant about maintaining security protocols this places the business’ IP as well as any secure data, they may have at risk.

The disruption caused by geopolitical events can grind any project to a halt. According to S&P Global, the largest threats of this nature expected in 2024 include Russia-NATO tensions, US-China Strategic Competition, Climate Risk, Energy Security, and Renewed Pragmatism or Deglobalisation. According to the report, “A variety of factors have given rise to questions around the benefits of increased international movements of goods, services, people, capital, technology and ideas in recent years. The growth of nationalism, protectionism and populist movements in recent years has created an environment of increasing uncertainty and could potentially lead to deglobalization - a reversal or slowdown of globalisation”.

To mitigate against these risks, businesses should be looking for Dev On-Demand services that grant businesses access to engineers with diverse experience in various industries. Not only should the engineers have a broad range of skills but also need to understand business needs and cultural differences across regions. For international businesses, this becomes crucial as they require customized solutions that cater to global markets, specifically those with complex needs. A pedigree of Engineers' cultural and linguistic understanding allows for better collaboration and the ability to provide tailored solutions.