The benefits of software development outsourcing are too big to overlook. That is why so many businesses, including some of the corporate bigwigs and MNCs, resort to custom software development through outsourcing. Choosing the right partner agency for outsourcing software development is crucial. While most companies focus on getting the right type of application developed, here is another factor that needs consideration. Apart from the competence and usability of custom-developed software, organizations need to be careful about source code and intellectual properties.
Understanding the importance of protecting source Code and IP
When you hire a third-party software development agency for creating a software application for your brand, it is important to be careful about IP and source code. Companies that are cautious about these two aspects analyze the following factors or scenarios when hiring a software developer:
- What happens if the code developed for the company gets copied or it is re-used?
- What if the code meant for the software is actually shared with rival companies?
- What if the vendor alters the source code and uses it to develop another product?
It is quite commonplace for businesses to spend colossal amounts of money on developing customized software applications. They develop such applications to get a competitive edge and win customers. Theft or leakage of source code renders the investment and efforts fruitless. So, these entities remain extremely careful about safeguarding their source code IP.
Without a doubt, a unique source code developed for the customized application of a company is its asset. To safeguard it and protect it from duplication, the Intellectual Property (IP) rights are used. However, it is important to understand that IP rights are not restricted to typical copyrights, patents, and trademarks. It is also applicable to processes, source code, methodology used in custom software development.
IP rights for software applications denote software or code that is lawfully protected against tampering, copying and using without permission of the owner.
Tips to ensure Source code IP is protected while outsourcing software development
When you hire a third-party agency for outsourcing software application development, adhere to some steps to ensure your brand’s Source Code IP is safeguarded:
- Hiring expert and reliable developers– There are so many agencies that offer software development outsourcing services nowadays. While the lower rates of a new agency may seem tempting, remember that a long-term contender in the sector is likely to be more reliable and professional. While nothing is exactly set in stone, agencies that have spent a long time in the industry are more concerned about reputation and image, and so they are not likely to tamper with client IP.
- Checking client reviews carefully– The agencies offering software outsourcing services may have client testimonials on their sites. When checking those online reviews and testimonials, do not look solely for the quality of work and reasonable rates etc. Check for reviews that mention reliability in handling of IP and professionalism.
- Assessing Security Audit– Go through the security audit of the vendor you have been eyeing for outsourcing software development for your brand. This will help you learn about the security measures practiced by the vendor. The top-notch software outsourcing companies pay special attention to implementing security measures. They usually use Firewall and UTM systems at the workplace. They use secure backup processes. Stringent network access policies are used by such companies.
- Opting for NDA– This is a very important step for safeguarding your company’s Source Code IP. A non-disclosure agreement, in fact, serves as an additional layer of protection. This binds the vendor into a legal agreement to ensure confidentiality of the assets shared. This can be both in the forms of organization-level NDA and employee level NDA. The NDA clarifies what cannot be shared or circulated by the vendor and its workforce.
- Opting for Non-competence Agreement– If you are very careful about protecting the source Code IP of your company, opt for a Non-competence Agreement, along with NDA. An NCA prevents the vendor from disclosing or sharing the source code with your competitors. So, you can remain a step ahead of the segment rivals. Typically, the NCAs remain in effect for quite some time.
- Sharing with caution– To safeguard your company’s Source Code and IP, try sharing information with caution with the vendor. To ensure the software is developed in the best way, you will have to share the idea and explain your usage needs for sure. However, refrain from sharing information about the company and its policies- more than what is necessary. Share only what is required for executing a particular project.
- Seeking expert consultancy– If you are not much knowledgeable about things like NDA and NCA and still want to safeguard your company’s source Code IP while outsourcing, there is a way out. You can hire an expert legal consultant to get the NDA reviewed before finalizing things. You can find IP law consultants and firms offering such services. They can help you figure out the usefulness and authenticity of the contracts. They can also enlighten you about areas of exclusion in such contracts.
- Checking the response– When you get in touch with an agency for software development outsourcing, you may have different queries in mind. The reliable and professional vendors will resolve your queries without delay or hesitation. Feel free to ask the agency about its policies on IP rights and NDA. If the agency does not clarify its policies on these aspects, evading it will be advisable.
- Looking for legal loopholes– Even if you get the vendor developing software for your company to sign an NDA, that may not be enough to warrant the safety of your brand’s source code IP. You have to be vigilant about the hidden legal loopholes- if any! Sometimes, the existing legal framework in the country of the vendor may allow it to bypass certain clauses in the NDAs. This may put you in a somewhat vulnerable position. So, check for such aspects carefully.
- Outsourcing to multiple vendors –This can lead to project cost escalation, but it reduces the risk of IP breach or leakage as well. If money is not a constraint, you can outsource parts of the software development processes of the company to different vendors. So, the actual application can be developed by one agency, while quality testing can be done by another. That way, you do not have to share the entire source code with one vendor.
Summing it up
Hiring the right vendor is vital in enterprise application development and outsourcing. Businesses need to select the apt vendors for developing applications that fulfil their requirements well, and they also need to ensure the vendor is careful about safeguarding their IP. There are some aspects that should be evaluated well for determining the reliability of the outsourcing agency. It can be somewhat time-intensive but hurrying is not prudent.
