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Creating better software products with crowdsourcing and outsourcing

Crowdsourcing, insourcing and outsourcing: strategies for cost efficiency and team scalability

Finding the right people to get your tech project done is hard. Thankfully strategies such as crowdsourcing and outsourcing can create more efficient processes and open doors to better data collection or application development. How do these techniques work? Both offer similar potential benefits: businesses can access more resources at lower costs.

Crowdsourcing and Outsourcing: Who Benefits?

Crowdsourcing is the practice of seeking the public’s help in developing and improving products or services. A wide variety of work can be crowdsourced, from simple tasks such as product testing to more complex jobs such as creating software coding. A business can also look to crowds for more general help solving problems and creating ideas.

Nokia, for example, hired Lionbridge Technologies to send customers to stores to test the new phones’ features and report back on any difficulties. In contrast with hiring an in-house engineering team to troubleshoot the apps, this crowdsourcing approach required little pre-planning, and no salaries or benefits packages.

Some e-commerce companies, rely on crowds to spot-check search-engine search results and advise on search terms. Crowdsourcing also helps financial-services companies gather financial data on businesses, and companies of all trades to compile more highly accurate databases of their customers. Even Intetics has used crowdsourcing to create an outbound call center for geo data collection.

Outsourcing is likewise a viable option for many software development tasks. In some cases, it is a necessity. Outsourcing is the practice of contracting an external third party to work on your project. When projects with set deadlines arise, and there are not enough skilled personnel in-house to complete them, or if a company experiences fast growth and needs extra resources, the company must look for help off-site.

There are many noteworthy benefits of outsourcing software development; for example companies who develop content-based apps for mobile phones. Michael Schneider, CEO of mobile app platform Mobile Roadie, noted in a Mashable commentary that keeping apps fully up-to-date when new phones and software versions come out practically every month is costly and time-consuming. Assigning external vendors to take up some of the burden frees up the in-house workforce to focus on other essential tasks.

A company that properly utilizes both crowdsourcing and outsourcing together can reap huge cost savings while benefitting from immensely widened pools of talent and labor.

Some crowdsourcing caveats

Crowdsourcing participants typically expect compensation. Budget in advance for this. Also set money aside for miscellaneous project expenses, such as compiling surveys, running tests, and collecting and judging results.

And although those crowd participants are not paid workers, they had best be qualified. Make sure to put quality-control measures in place so that you can have confidence in them and their work. Then determine how you will manage them over the project’s duration. (Contact us for a case study on how we did it for an outbound call center.)

Also, be flexible. Participants may make mistakes. You will consequently need to allot some extra time to make changes, correct errors, monitor results, and—if needed—start over.

Potential pitfalls of outsourcing

Before you outsource, know the costs and risks of outsourcing. Outsourcing is a process and needs to be managed accordingly, if it is not, outsourcing can quickly cost you more than you expected.

For example, the new external team may require training on your company’s products and processes. If your product requires extensive training make sure your vendor can guarantee that the same people continue to work on your project, otherwise you may face higher training costs.

Moreover, know which activities will benefit from outsourcing and which will not. Some projects are better developed in-house, for example if the core of your business is making mobile apps. In other instances, outsourcing non-routine tasks will only benefit your company if it adds flexibility and frees up time to focus on other more important parts of the business. Understand the bigger goals behind your outsourcing activities and deploy your outsourcing strategy accordingly.

Outsourcing can add cost efficiency and scalability to software development, but it is a process that needs to be managed, and for that you need to select your partners with caution. Make sure you select your outsourcing partners based on their expertise, processes and business model.

For instance ask for examples of the company’s successful use of Scrum, a project-management model that entails developing a software product in a series of short sprints, with ongoing input from in-house staff, the external teams, and the public. The method enables the teams to modify a product quickly to changes in customer demand and allows your development process to be more flexible and prevent re-development costs down the line.

Reviewing a company’s business model further assures the vendor’s commitment to achieving your goals with you.

For more info on outsourcing business models and outsourcing risks download this white paper.

Photo by gerard79 via Free Images