Wednesday, April 2, 2008

Outsourcing Pain

I have some friends who own a small business together and are going through some outsourced development trouble. The business originally started with one owner in the U.S. and an outsourced Eastern block nation developer responsible for all architecture and development. Together, they built a robust web app that was great for its intended purpose, and quite pleasing to the eye. The two had a great relationship, albeit one based on no more than a virtual hand shake.

Things started to get sketchy when the owner, realizing he could only take the business so far, brought in partners and gave away equity. With the new partners involved, the original relationship with the developer started to sour. The developer responded by working directly for clients, raising his rates, and making him self scarce.


They asked me what the worst-case scenario would be if the relationship soured to the point where they no longer worked with this developer. They assumed he could take the source code, his knowledge of the source code, and start a competing firm. Since he is in a foreign country, and they have no written agreement at all, the partnership would be S.O.L. That is bad news.

While the above is true, I told them the really bad news. Since he is the only one who understands the code and was the sole person responsible for managing it, it would be good too assume that he knows backdoors into the app where he can steal sensitive client data. They wondered why this is a "good" assumption. I explained that it is a good assumption because they have a chance to be proactive about it.

Take Back Control

The first thing they need to do is get a handle on the source code. They need to maintain a source code repository and make the outsourced developer use it. Once they have the source, they need to get a security consultant to review the code for security problems. Expensive, but necessary. Finally, they need to either formalize the relationship with this outsourcer or plan on moving to someone else.

In hind sight, it is easy to see how all eggs were in one basket. Since all design, architecture, and coding was done by the outsourced resource, there was no internal knowledge of how the application actually worked. The developer had all the control. A simple solution would have been to hire one more outsourced resource, and split the workload between the two. This would have allowed an additional technical resource to develop over time, providing the owner with some stability in case the secret police came in the night and took the primary developer away.

For Next Time

If an individual were to ask me for advice on initiating an overseas outsourced development project, here are some tips I would give them.

1. Go with a legit company. Don't just pick some guy off rent-a-coder who you can only contact via IM and email. If you want a long term relationship, you will want to be able to speak with them.

2. If possible, go with a company that has a presence in your country. Not only does this mean you have someone to speak with during your own business hours, but you have someone you can more easily hold legally responsible if things don't work out.

3. Make sure the developers document their code.

4. Have a contingency plan if things don't work out. Try and establish a relationship with another development firm, or be prepared to hire an internal resource. Outsourcing can be a great value, but having an in-house resource can be invaluable.

5. Understand that security is important. Non-technical people can come up with great ideas for software. Unfortunately, when they have someone develop it, they look for functionality and turn a blind eye on security (actually that sounds like a lot of technical people I know). Before you begin your project, check out OWASP, and at least talk to someone about application security - a friend, a consultant - anyone knowledgeable.

6. When you begin testing the application internally, pay a third party to perform a security assessment of it. This way you can report security issues to the developers in addition to the functional bugs you will be finding and reporting. It is more dollars up front, but it will be worth it in the long run. The sooner you address security, the cheaper it will be.

There are probably alot more points that I don't address above. If you have any advice for people with a great idea for an app and are looking to take advantage of outsourced development, feel free to post in the comments.

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