Many iGaming and PayTech companies turn to technical outsourcing providers to augment their existing tech dev team or to manage specific projects. It’s a highly effective solution to talent shortages or to address short-term needs. However, outsourcing is not without its challenges. Here we look at the key considerations to address before outsourcing your tech requirement.
This article is an extract taken from our whitepaper Outsourcing As A Tech Development Strategy in the iGaming and PayTech Industry. To download a copy please click here.
While outsourcing offers many advantages, it is essential to be aware of potential challenges and considerations that can arise when implementing an outsourcing strategy. By proactively addressing these issues, you can mitigate risks and optimise the benefits.
7 Common Technical Outsourcing Challenges
Here are some key factors to keep in mind:
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Cost vs. In-House Team Efficiency
One of the primary considerations is the cost associated with outsourcing. While it can provide access to specialised skills and reduce long-term staffing costs, outsourcing may appear more expensive in the short term. This cost difference can be justified if the outsourced team delivers higher efficiency, expertise or faster project completion.
Assess your project’s unique needs and compare the cost-effectiveness of outsourcing versus maintaining an in-house team.
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Project Scope Management
A poorly scoped project can lead to time and cost overruns. These challenges may not necessarily be the supplier’s fault unless they were responsible for defining the project scope.
It is crucial to have a well-defined project scope and objectives before engaging an outsourcing partner; or work with a supplier that offers “Project Discovery” as a service.
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Knowledge Transfer and IP Protection
When engaging a 3rd party provider, there’s a risk of losing valuable knowledge and intellectual property (IP) when the contract ends.
This issue can be addressed by implementing robust document and project controls.
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Communication and Collaboration
Effective communication and collaboration are paramount for the success of outsourcing projects. Overcoming language barriers (if the outsourcing team is offshore), ensuring regular updates, and establishing clear channels of communication are vital.
Define roles and responsibilities, and set up collaboration tools and processes to facilitate seamless interaction between your team and theirs.
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Cultural and Time Zone Differences
If you are exploring offshore outsourcing providers, factor in working with teams located in different time zones and cultural settings. These differences can impact project timelines and communication.
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Quality Assurance and Oversight
Maintaining quality assurance and project oversight is crucial. While outsourcing partners strive to deliver high-quality results, having mechanisms in place for quality control and regular project reviews is essential.
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Managing Outsourcing Partner Relationships
Building and managing strong partner relationships is vital for the success of your outsourcing initiatives. Open and transparent communication, regular performance evaluations, and addressing issues promptly are essential components of effective vendor relationship management.
A well-managed relationship can lead to long-term partnerships and successful project outcomes.
While outsourcing can give you access to specialised skills and overcome staffing issues, it’s not without its challenges. Working with an experienced industry-specific technical partner can help you address many of these challenges as they have deep market knowledge and access to highly specialist talent.
To get a deeper dive into this subject with guidance on best practices and how to use technical outsourcing effectively, download our whitepaper Outsourcing As A Tech Development Strategy in the iGaming and PayTech Industry here.