Healthcare software development outsourcing is a common strategy companies use to tap into external expertise and streamline their operations. This approach can lead to cost savings, increased efficiency, and access to specialized skills. It’s a strategy used by businesses large and small, with even major players like Google, Alibaba, and Slack outsourcing their development. This trend is driving a booming market for outsourcing services, which is projected to be worth $587 billion by 2027.
However, outsourcing doesn’t always work. A worrying statistic shows that half of all outsourced projects fail or don’t meet expectations. We will look at the top five mistakes that healthcare software development outsourcing often faces.
Mistake #1: Setting Unclear Expectations
Business leaders often choose the cheapest option while expecting the highest output, making contracts unprofitable for software outsourcing providers. This could lead providers to use less effective development approaches to recover or result in higher bills than expected.
To avoid potential issues, clear and well-defined requirements are crucial. Both parties should have a shared understanding of expectations, and any questions or concerns should be addressed upfront.
Misunderstandings and lack of clarity on project requirements can cause dissatisfaction and require additional time and money to rectify. In fact, 45% of IT projects exceed their budget due to insufficient information, essential details, and unattainable expectations. Having a clear vision and plan for the project is necessary, but ensuring that the healthcare software development outsourcing team is well-informed about these plans is also vital.
Building a product involves careful consideration of various domains, such as architecture, deployment, and design flexibility. Therefore, it is essential to have engineers who understand your vision and can bring it to life.
Mistake #2: Choosing the Wrong Cooperation Model
Software outsourcing vendors will help build an optimal workflow for your project. Choosing the right cooperation model is the first step in determining how you will manage that workflow. The cooperation model will decide the level of involvement, the total cost, and a realistic time frame for your product.
In other words, the cooperation model affects how your project is executed, your roadmap is built, and resources are allocated. A misstep here could derail the whole project and waste your investment. For example, a cooperation model that proves effective for short-term projects like building an MVP might not fit a long-term project requiring continuous maintenance.
Here are the standard cooperation models in healthcare software development outsourcing to assist you in selecting the right one for your needs:
1. Fixed Price Model:
The fixed price model is a cooperation model where you and your software outsourcing partner agree on a fixed budget and timeline for the project. The scope of work and deliverables are clearly defined upfront, and the outsourcing partner is responsible for delivering the agreed-upon product within the specified budget and timeline.
Advantages: The fixed-price model provides a clear budget, timeline, and well-defined scope, mitigating the risks for your company.
Disadvantages: It holds limited flexibility for changes, potential misalignment if requirements evolve, and less collaboration with the healthcare software development outsourcing partner.
When to choose: When the project scope is well-defined, and there is a need for cost certainty with limited changes during development.
2. Time and Materials Model:
With the time and materials cooperation model, you get to pay the outsourcing partner based on the actual time and resources spent on the project. Usually, hourly rates, costs for using equipment, markups for any subcontractors, and materials are agreed upon ahead of time. In order to enhance the effectiveness of this approach, it is advisable to utilize reliable tools such as KMS Healthcare ROI Calculator to estimate the required budget and your financial capacity before contacting the potential partners.
Advantages: This model offers flexibility to accommodate evolving requirements and the ability to adjust project scope or priorities.
Disadvantages: The problems of this model mostly come from its uncertain budget and timeline, leading to cost overruns if the project is not managed effectively.
When to choose: When the project requirements are likely to change, and there is a need for close collaboration, adaptability, and ongoing involvement in the development process.
3. Dedicated Team Model:
The dedicated team model is a cooperation model where your internal employees form a dedicated team with the outsourcing partner. The team is exclusively assigned to work on the healthcare software project and is managed directly by your company.
Advantages: This model provides full control and transparency, direct management of the development team, flexibility to scale the team as needed, and deep collaboration and knowledge transfer.
Disadvantages: It requires higher management overhead, longer setup time, and potential team integration and communication challenges.
When to choose: The dedicated team model is suitable for long-term projects or when there is a need for long-term collaboration, continuous development, and close alignment between your development team and the outsourcing partner.
When choosing a cooperation model, do your best to account for all the factors facing your project, such as project complexity, budget, timeline, desired level of control, and adaptability to changing requirements.
Our pro tip here is to choose healthcare software development outsourcing vendors that offer flexibility in switching between different cooperation models, like KMS Healthcare, to meet the project’s specific needs at different stages.
Mistake #3: Lack Of Control Over Code Quality
US organizations wasted $2.08 trillion due to poor software quality, including $260 billion on unsuccessful development projects. That’s why you should not hand off the entire project to an outsourced development team and blindly hope for the desired results.
When outsourcing software development, ensure frequent monitoring and reviews to keep the project on track. Consider the following for robust coding practices:
- Well-documented, validated coding standards.
- High code quality and maintainability.
- Code’s long-term performance without critical errors.
- Thorough QA with functional testing and unit testing.
If you lack technical expertise, it’s crucial to have an in-house technical expert or manager to oversee the progress of the healthcare software development outsourcing team. While outsourcing firms may provide project managers, having your own offers distinct advantages as they work directly for your company.
Remember, software development involves multiple aspects, including architecture, deployment, and design flexibility. Having an industry expert as a technical manager will ensure expert guidance in decision-making throughout your project.
Mistake #4: Misaligned Communication and Collaboration
Bringing different people and skills together is always challenging. A whitepaper of SourcingFocus showed that 28% of selected businesses regarded poor communication as the top reason for outsourcing project failures. And without a carefully planned collaboration process, both parties can fall victim to miscommunication and mistakes.
To overcome this, create clear communication channels between your development team and the healthcare software development outsourcing vendor. Regular meetings, video conferences, and project management tools can help facilitate real-time communication and ensure everyone is on the same page.
Also, assign dedicated communication points on both sides as primary contacts. These primary contacts will keep all team members aligned with the project’s progress and compile all necessary information to avoid confusion among the development team.
Remember, collaboration is key in software development and should be viewed as a win-win situation for all.
Mistake #5: Hiring Outside the Healthcare Industry
Healthcare is known as one of the most highly regulated industries. Developing software for this sector requires a deep understanding of its unique challenges, regulations, and requirements. Even skilled developers and designers will struggle with industry-specific problems without healthcare expertise.
With the current heightened security & evolving patient safety, healthcare businesses should expect their software development provider to be considered as covered entities and comply with regulated data security. Their resources must be adhering to the HIPAA guidelines and even mandated to go through annual security training.
Not only stringent compliance standards, non-industry experts may also face difficulties navigating through healthcare software requirements. They may take longer to understand healthcare-specific concepts and workflows, leading to delays in development timelines, higher billing rates, or, worse, low-quality software that fails to address critical healthcare needs.
To mitigate all the risks associated with healthcare software development outsourcing, we advise collaborating with vendors with proven expertise in the healthcare industry. Their in-depth knowledge of healthcare workflows, regulations, and patient safety considerations will guide you throughout the software development life cycle, from defining requirements to deployment and maintenance.
A Cheat Sheet To Find Your Ideal Healthcare Software Development OutsourcingPartner
Healthcare software development outsourcing can be a cost-effective solution for businesses of all sizes in the rapidly evolving digital healthcare landscape. However, diving into outsourcing without a clear strategy to address these crucial mistakes can result in a lower-quality product at a higher cost.
In fact, selecting the right healthcare software development outsourcing partner from the start can help you avoid these common pitfalls. To safeguard your project, undertake these essential steps before forming any strategic partnership with your outsourcing vendor
1. Conduct thorough research on potential software outsourcing partners. Evaluate their expertise in the healthcare industry through their background, experience, and track record in delivering healthcare software solutions. Also, check their staffing ability to see if they can meet your project’s requirements.
2. Request case studies and references from previous clients. Reading these stories will provide valuable insights into the provider’s capabilities, client satisfaction, and project management approach, including their communication skills and ability to meet deadlines.
3. Ensure that the outsourcing provider has high employee retention. Retention is important for continuity, consistent knowledge transfer, and a deep understanding of your product. Ask about their strategies for attracting and retaining top talent, as software can’t progress if the engineers and managers walk out the door midway through its lifecycle.
If you’re struggling to find the right partner for your healthcare software development needs, contact us to connect with healthtech experts to help scope your project. We’re here to help you with the end-to-end software development cycle, from idea to launch.
KMS Healthcare: Your Trusted Partner for Strategic Software Outsourcing
With extensive healthcare technology experience, KMS Healthcare is equipped to be your technical partner to co-develop interoperable, compliant, and high-quality software that gets you to market quicker. Our team of experienced developers can get you started much closer to the finish line with:
- A healthcare-experienced development team that can ramp up immediately
- Consulting guidance to ensure a successful delivery
- Skilled data scientists, AI/ML engineers, and leaders in emerging healthcare technologies
- Proven healthcare software development methodology for startups and enterprises
- Real-world experience from successfully launching our own software product companies
Contact KMS Healthcare to start powering up your business with a high-quality healthcare software solution.
