Your search for a software development company must diligently focus on the necessities and ignore the non-essentials. Once identified, you will need to draw up a legal contract with the company that exhaustively defines the nature of your working relationship with the company and the duties and responsibilities assigned to the said company. This is a process that requires attention to detail and a prime focus on mitigating any and every risk associated with working with a software development company and the process of software development in general.

Here are 4 ways of ensuring that the risks to software development are mitigated considerably.

Understand the Contract and then Sign on the Dotted Line

Typically, you will be presented with either a Fixed –Price or a Time and Material Contract. In the former, the risk related to cost overruns is assumed by the developer while in the latter, you are burdened with it. At first glance, you might think that there is no doubt that you must choose the ‘Fixed Price’ contract. But think about it for a second. Developers aren’t fools; they will ensure that they will take into consideration the prospect of cost overruns, while determining the fixed cost of the project development.  You are paying for it, but you just don’t realize it.  When it comes to a Time and Materials contract, you are going to pay the developer on an hourly basis, so there is a case where the developer might feel it’s worth his while to extend the period of the development to bill some more hours to you.

The bottom line is that both contracts have some risks linked to them. You will need to ensure that you are able to read between the lines of the contract and ensure that each and every deliverable related to the project, is stated explicitly. Otherwise, you are leaving space wide open for potential disputes.

Tweaking Advance Payments

Most software companies will ask for an upfront payment. This could be half of the total cost of the project, if it’s a major investment on the part of the client, or it could even by a full payment if the size and scope of the project is not really that big. But, the problem with such advance payments is that you are bearing the risk of the non-performance of the developer. This is a huge risk and you will need to mitigate it. This can be done by trying to work out a payment deal with the developer that has you making a payment that is time bound. This means you will pay for a week’s worth of development; once the week is out you can take a look at the work done, and then move forward for the next week’s payments.  When you are making advance payments, your focus should only be on minimizing the amount that you pay as much as possible.

Beware of Kill Switches

Oops!  If you forget about this risk, your software is in danger. One of the reasons why experts ask for due diligence before you choose any software developer to work on your project is because there are plenty of crooked developers out there. These are the kind of developers that won’t think twice about working a kill switch into the application that they are developing for you. In some circles, this switch is also known as an extortion switch. In the event there is a payment dispute between you and the unscrupulous developer you are working with, all they will do is press the switch and shut your application down, remotely. Do what you will, but you will have no other option but to pay up. One of the ways that you can get around this blackmail is that you have a contract that categorically makes mention of such practices and prohibits their use.

Beware of the Disappearing Act

The internet has paved the way for plenty of “enterprising” elements who are out to make a quick buck and fool gullible people who think something that’s said on the internet must and will be the absolute truth. There are plenty of people who call themselves freelance developers, playing the field on the World Wide Web. Their modus operandi is simplicity itself. They have a wonderful looking website, a fantastic portfolio, and they respond immediately to quote requests from potential clients. These quotes are often bottom of the barrel that anybody will find attractive. They ask for a limited upfront payment, which is also something that attracts potential clients. When the payments are made, there is no word from the developer. The developer and your money will have disappeared.

It’s very easy to avoid falling into such a trap. The first step is to choose a developer or a development company, that has a physical address and the second step, will be to visit that address and have a face- to-face conversation. At the cost of sounding repetitive, I want to say once again that the key is due diligence. Only work with a company or a freelance developer if you are absolutely sure about their credibility and reputation on the market.

There are plenty of other ways that help ensure, you minimize the risk associated with software development. But, these are enough to push you in the right direction. The important thing is to take all your decisions after a lot of forethought and by evaluating and analyzing everything that you think will go wrong.