How to manage risk and security when outsourcing development

Are you planning to offer a SaaS product, perhaps combined with a mobile app or two? Many companies operating in this space will outsource development, often because they don’t have the right in-house capacity or competence. In many cases the outsourcing adventure ends in tears. Let’s first look at some common pitfalls before diving into what you can do to steer the outsourced flagship clear of the roughest seas.

Common outsourcing pitfalls

I’ve written about project follow-up before, and whether you are building an oil rig or getting someone to write an app for you, the typical “outsourcing pitfalls” remain the same:

  • Weak follow-up
  • Lack of documentation requirements
  • Testing is informal
  • No competence to ask the right questions
  • No planning of the operations phase
  • Lack of privacy in design

Weak follow-up: without regular follow-up the sense of commitment can get lost for the service provider. It is also increasing the chances of misunderstandings by several magnitudes. If I write a specification of a product that should be made, and even if that specification is wonderfully clear to me, it may be interpreted differently by a service provider. With little communication underway towards the product, there is a good chance the deliverable will not be as expected – even if the supplier claims all requirements have been met.

Another big mistake by not having a close follow-up process, is lost opportunities in the form of improvements or additional features that could be super-useful. If the developer gets a brilliant idea, but has no one to approve of it, it may not even be presented to you as the project owner. So, focus on follow-up – if not you are not getting the full return on your outsourcing investment.

Lack of documentation requirements: Many outsourcing projects follow a common pattern: the project owner writes a specification, and gets a product made and delivered. The outsourcing supplier is then often out of the picture: work done and paid for – you now own the product. The plan is perhaps to maintain the code yourself, or to hire an IT team with your own developers to do that. But…. there is no documentation! How was the architecture set up, and why? What do the different functions do? How does it all work? Getting to grips with all of that without proper documentation is hard. Really hard. Hence, putting requirements to the level of documentation into your contracts and specifications is a good investment with regards to avoiding future misunderstandings and a lot of wasted time trying to figure out how everything works.

Informal or no testing: No testing plan? No factory acceptance test (FAT)? No testing documentation? Then how do you determine if the product meets its quality goals – in terms of performance, security, user experience? The supplier may have fulfilled all requirements – because testing was basically left up to them, and they chose a very informal approach that only focuses on functional testing, not performance, security, user experience or even accessibility. It is a good idea to include testing as part of the contract and requirements. It does not need to be prescriptive – the requirement may be for the supplier to develop a test plan for approval, and with a rationale for the chosen testing strategy. This is perhaps the best way forward for many buyers.

No competence to ask the right questions: One reason for the points mentioned so far being overlooked may be that the buying organization does not have the in-house competence to ask the right questions. The right medicine for this may not be to send your startup’s CEO to a “coding bootcamp”, or for a company that is primarily focused on operations to hire its in-house development team – but leaving the supplier with all the know-how leaves you in a very vulnerable position, almost irrespective of the legal protections in your contract. It is often money well spent to hire a consultant to help follow-up the process – ideally from the start so you avoid both specification and contract pitfalls, and the most common plague of outsourcing projects – weak follow-up.

No planning of operations: If you are paying someone to create a SaaS product for you – have you thought about how to put this product into operation? Often important things are left out of the discussion with the outsourcing provider – even if their decisions have a very big impact on your future operations. Have you included the following aspects into your discussions with the dev teams:

  • Application logs: what should be logged, and to what format, and where should it be logged?
  • How will you deploy the applications? How will  you mange redundancy, content delivery?
  • Security in operations: how will you update the apps when security demands it, for example through the use of dependencies/libraries where security holes become known? Do you at all know what the dependencies are?
  • Support: how should your applications be supported? Who picks up the phone or answers that chat message? What information will be available from the app itself for the helpdesk worker to assist the customer?

Lack of privacy in design: The GDPR requires privacy to be built-in. This means following principles such as data minimization, using pseudonomization or anonymization where this is required or makes sense, means to detect data breaches that may threaten the confidentiality and integrity (and in some cases availability) of personal information. Very often in outsourcing projects, this does not happen. Including privacy in the requirements and follow-up discussions is thus not only a good idea but essential to make sure you get privacy by design and default in place. This also points back to the competence bit – perhaps you need to strengthen not only your tech know-how during project follow-up but also privacy and legal management?

A simple framework for successful follow-up of outsourcing projects

The good news is that it is easy to give your outsourcing project much better chances of success. And it is all really down to common sense.

outsourcing_framework
Activities in three phases for improving your outsourcing management skills

Preparation

First, during preparation you will make a description of the product, and the desired outcomes of the outsourcing project. Here you will have a lot to gain from putting in more requirements than the purely functional ones – think about documentation, security, testing and operations related aspects. Include it in your requirements list.

Then, think about the risk in this specification. What can go wrong? Cause delays? Malfunction? Be misunderstood? Review your specification with the risk hat on – and bring in the right competence to help you make that process worthwhile. Find the weaknesses, and then improve.

Decide how you want to follow-up the vendor. Do you want to opt for e-mailed status reports once per week? The number of times that has worked for project follow-up is zero. Make sure you talk regularly. The more often you interact with the supplier, the better the effect is on quality, loyalty, and priorities. Stay on the top priority list for your supplier – if not your product will not be the thing they are thinking about when coming to the office in the morning. Things you can do to get better project follow-up:

  • Regular meetings – in person if you are in the same location, but also on video works well.
  • Use a chat tool such as Slack, Microsoft Teams or similar for daily discussions. Keep it informal. Be approachable. That makes everything much better.
  • Always focus on being helpful. Avoid getting into power struggles, or a very top-down approach. It kills motivation, and makes people avoid telling you about their best ideas. You want those ideas.

Competence. That is the hardest piece of the pussle. Make sure you take a hard look at your own competence, and the competence you have available before deciding you are good to go. This determines if you should get a consultant or hire someone to help follow-up the outsourcing project. For outsourcing of development work, rate your organization’s competence within the following areas:

  • Project management (budgets, schedule, communications, project risk governance, etc)
  • Security: do you know enough to understand what cyber threats you need to worry about during dev, and during ops? Can you ask the right questions to make sure your dev team follows good practice and makes the attack surface as small as it should be?
  • Code development: do you understand development, both on the organizational and code level? Can you ask the right questions to make sure good practice is followed, risks are flagged and priorities are set right?
  • Operations: Do you have the skills to follow-up deployment, preparations for production logging, availability planning, etc?
  • User experience: do you have the right people to verify designs and user experiences with respect to usability, accessibility?
  • Privacy: do you understand how to ensure privacy laws are followed, and that the implementation of data protection measures will be seen as acceptable by both data protection authorities and the users?

For areas where you are weak, consider getting a consultant to help. Often you can find a generalist who can help in more than one area, but it may be hard to cover them all. It is also OK to have some weaknesses in the organization, but you are much better off being aware of them than running blind in those areas. The majority of the follow-up would require competence in project management and code development (including basic security), so that needs to be your top priority to cover well.

Work follow-up

Now we are going to assume you are well-prepared – having put down good requirements, planned on a follow-up structure and that you more or less have covered the relevant competence areas. Here are some hints for putting things into practice:

  • Regular follow-up: make sure you have formal follow-up meetings even if you communicate regularly on chat or similar tools. Make minutes of meetings that is shared with everyone. Make sure you make the minutes – don’t empower the supplier to determine priorities, that is your job. The meetings should all be called for with agendas so people can be well prepared. Here are topics that should be covered in these meetings:
    • Progress: how does it look with respect to schedule, cost and quality
    • Ideas and suggestions: useful suggestions, good ideas? If someone has a great idea, write down the concept and follow-up in a separate meeting.
    • Problems: any big issues found? Things done to fix problems?
    • Risks: any foreseeable issues? Delays? Security? Problems? Organizational issues?
  • Project risk assessment: keep a risk register. Update it after follow-up meetings. If any big things are popping up, make plans for correcting it, and ask the supplier to help plan mitigations. This really helps!
  • Knowledge build-up: you are going to take over an application. There is a lot to be learned from the dev process, and this know-how often vanishes with project delivery. Make sure to write down this knowledge, especially from problems that have been solved. A wiki, blog, and similar formats can work well for this, just make sure it is searchable.
  • Auditing is important for all. It builds quality. I’ve written about good auditing practices before, just in the context of safety, but the same points are still valid for general projects too: Why functional safety audits are useful.

Take-over

  • Make sure to have a factory acceptance test. Make a test plan. This plan should include everything you need to be happy with to say you will take it over:
    • Functions working as they should
    • Performance: is it fast enough?
    • Security: demonstrate that included security functions are working
    • Usability and accessibility: good standards followed? Design principles adhered to?
  • Initial support: the initial phase is when you will discover the most problems – or rather, your users will discover them. Having a plan for support from the beginning is therefore essential. Someone needs to pick up the phone or answer that chat message – and when they can’t, there must be somewhere to escalate to, preferably a developer who can check if there is something wrong with the code or the set-up. This is why you should probably pay the outsourcing supplier to provide support in the initial weeks or months before you have everything in place in-house; they know the product best after making it for you.
  • Knowledge transfer: the developers know the most about your application. Make sure they help you understand how everything works. During the take-over phase make sure you ask all questions you have, that you have them demo how things are done, take advantage of any support contracts to extend your knowledge base.

This is not a guarantee for success – but your odds will be much better if you plan and execute follow-up in a good manner. This is one way that works well in practice – for all sorts of buyer-supplier relationship follow-up. Here the context was software – but you may use the same thinking around ships, board games or architectural drawings for that matter. Good luck with your outsourcing project!

Comments? They are very welcome, or hit me up on Twitter @sjefersuper!

 

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