Great ideas in tech can lead to great software development. Unfortunately, outsourcing your development can lead to intellectual property (IP) leakage and loss, even when you think you’re being especially cautious. Rather than exposing your IP, consider taking a different approach and do more using the team you already have. You can reduce your risk and get your product to market at the same cost you would have with outsourcing.
Traditional Outsourcing Approaches Don’t Protect Your Intellectual Property
Think about the IP for a software product; your code is the manifestation of your IP – those proprietary algorithms, data sets and processes that set you apart. Some may be patented while others are trade secret. The point is that a huge portion of your valuation is tied to your IP/your code not getting into the hands of your competitors. The bottom line is that there is no getting around the fact that your IP will be exposed to and indeed built by your software developers.
In order to reduce your risk of IP loss of leakage, you fundamentally need fewer eyeballs with access to it, which means limiting the number of people working on it. This becomes especially problematic when you consider that upwards of 95% of the cost of traditional software development is labor cost – if you need more software built, with traditional software development you have no choice but to throw more people/eyeballs at the problem.
With IP loss, your IP has walked right out the door; it’s gone and you might not know what exactly it was or where it ended up.
IP leakage is more likely to be contractual or related to partnerships or licensing agreements, but still results in increased risk of loss of intellectual property for your company.
You need to be observant of who has access to your IP, as well as what your IP is and where it lives. This becomes complicated when you outsource your software development.
With traditional software outsourcing, you have to be aware of:
- Turnover: How high is the turnover rate of the engineering staff or development team you are having work on your product? Turnover can be up to 200% annually – many outsourcing firms have turnover every six months. The engineers working on your IP today, could be working for your competitor tomorrow – and once your IP is out, it’s out.
- Risk: What control do you have over what people do with your IP? If an engineer leaves your outsourcing company, what can you do if they take your trade secrets with them? How will you find them? Would you actually be able to sue them? The inherent risk is significant.
- Transparency: How involved will you be with their engineers? They have your IP, but what is your visibility before development is finished?
Keeping Your Trade Secrets a Secret: Protecting Your Intellectual Property
Our counsel is to keep your IP as close as you can; limit exposure to external engineers and keep your software product development internal.
But how do you do this efficiently? Salaries are on the rise. Outsourcing models offer engineers at a lower cost, which does seem attractive . . . initially. However, engineers are not interchangeable.
The productivity on one software engineer can be 30X better than another. Engineers are not a commodity. Obvious though it may be, it’s important to remember that the outsourcing industry is hyper-focused on maximizing billable hours, a perverse incentive that maximizes cost, time, and the number of people with hands on your IP.
Our approach at Modularis is to minimize the number of engineers who are needed to get the job done. This approach is based on automation and embracing timeless first principles of software engineering; we build upon a solid foundation of software architecture and best practices that are baked into the platform, and automate as much of the software development process as possible without painting you into any corners. With our approach, you keep your trade secrets a secret AND reduce your development effort by up to 80%. What does this mean?
You only need one engineer instead of five.
Building software with Modularis means you don’t have to outsource – you can get big development results from your small, in-house team; this is the promise of PlatformPlus®.
Our Platform provides the secure tech automation you need to automate 80% of your software development, and the Plus provides you access to senior engineers, architects, and product designers who serve as advisors to your team. This is not billable by the hour – we aren’t out to maximize any billable time, this is simply our built-in service.
Instead of throwing more bodies at the problem, you get advice, support, guidance, and technology. You have tighter control over your IP while keeping your team small and productivity high, all at the same cost savings you would get with outsourcing.
One of the advantages of our approach is that we are completely cloud- and deployment-agnostic. You don’t have to put your IP into our cloud and you can deploy your solution anywhere you want. Private network, public cloud, on-premise; you have complete control and can limit exposure to your IP in any way you want. We want you to be able to build your platform to your standards without compromising the security of your IP.
IP Beyond The Code: The Modularis Approach to Intellectual Property
The first step to securing your IP is to blueprint it. For example, when we work with private equity funds, we execute post-acquisition stabilization; we help them identify and secure all IPs in their new acquisition.
Part of securing your IP revolves around blueprinting the existing systems, assets, and processes you already have. If you don’t have a blueprint of your IP, your assets could walk out the door along with any key personnel if they leave. If your intellectual property lives only in someone’s head, you might have the code, but you don’t know how to put it together. The first step is to blueprint critical processes and architecture so you know what you have.
The next step, and the key to hiring and retaining good people who won’t walk out the door with your IP? It comes down to culture. While you have to be competitive in terms of compensation, at the end of the day, software engineers often don’t feel heard or respected by management. When you earn the trust and respect of your key personnel, and give them the development tools they need to be successful, you protect your intellectual property and your organization.
Listen to your team, make sure your people feel heard. The most damage, when it comes to IP, is done by disgruntled, unhappy personnel. When you trust and respect your engineering staff, you reduce your risk. Keep your IP close, keep it internal, and keep it secure; you can protect the trade secrets that make you competitive in the market with careful planning and automation – and we can help!
Be aware of the risks outsourcing can present to your IP and take the steps to protect it before it’s too late. One phone call is all it takes to get your business headed down the right path.