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Blockchain technology is gaining momentum. It can minimize fraud risks, improve transaction transparency, and cost-effectively provide more robust resistance to threats and attacks.
Although businesses might prefer to build a world-class in-house team to create blockchain products, they experience several challenges. Setting up and managing a blockchain development team amid a global talent shortage and rising infrastructure costs leads to ballooning budgets.
Fortunately, business process outsourcing (BPO) is a viable option. In this article, we discuss the relationship between blockchain development, cryptocurrency, and BPO and the key considerations for outsourcing.
Blockchain Development, Cryptocurrency, and the Role of BPO
Already known as one of the most promising innovations in information technology (IT), blockchain will likely expand its use cases beyond cryptocurrency. However, long-term technological success will only happen when sufficient technical experts are available to deliver quality products.
In the United States, job postings related to cryptocurrency and blockchain surged by 615% from August 2020 to October 2021. According to TechCrunch, 14 jobs are available for every professional blockchain developer. Thus, businesses have started exploring BPO solutions.
These figures indicate fierce competition for human resources, which strains businesses that seek to refine their development initiatives. Cryptocurrency and blockchain development BPO is the process of partnering with a third-party service provider to oversee the management and development of a blockchain project or application.
Outsourcing blockchain development is a win-win solution if a company lacks the resources and expertise to create a blockchain product, such as a cryptocurrency, and must put something to market quickly. BPO providers also allow businesses to minimize the cost of blockchain development and access skilled and professional human talent.
Besides the financial benefits of third-party blockchain development services, companies also outsource to enable the following:
- Reduced project expenses
- Faster time to market
- Improved flexibility
- Better agility
- Easy access to the best blockchain development processes and tools
So, what is the role of BPO in cryptocurrency and blockchain development? Companies that handle blockchain, digital currency launches, non-fungible token (NFT) projects, digital assets, and decentralized finance (DeFi) can outsource the following roles:
- Blockchain developers with experience in building cryptocurrency and NFT projects
- Web designers who work pitch decks, components, white papers, and user interfaces (UI) for the client’s websites
- Content writers who specialize in making short-form and long-form content about cryptocurrency exchanges, leading NFT projects, new cryptocurrency projects, and other similar topics
- Marketing experts who set up funnels, use Google Analytics, and report and create email newsletters and social media campaigns
A compelling real-world example of blockchain outsourcing is the partnership between Walmart and IBM Food Trust. Walmart worked with a blockchain-based platform, IBM Food Trust, to improve food safety and traceability. This partnership gave Walmart the third-party resources to develop a secure and transparent supply chain service.
Benefits of Outsourcing Cryptocurrency and Blockchain Development
BPO organizations handle outsourcing tasks, such as call center services and customer support, to help companies reduce costs and increase efficiencies. Unsurprisingly, blockchain and cryptocurrency are among the industries that outsource to gain significant benefits.
By using third-party providers to deliver IT-enabled functions, businesses are more likely to avoid errors during development and access the best blockchain technology. In a time when local developers are in short supply, the benefits of outsourcing are plenty. Among them are:
- Reduced costs. The average cost of building a functional blockchain network ranges from $6,000 to $400,000. This includes developers, project managers, and quality assurance, excluding marketing and legal advisory costs. A third-party team with blockchain developers, UI and user experience (UX) designers, and testers is cheaper.
- Faster results. Hiring in-house developers is a long process. Businesses must wait for candidates to accept the job, finish their past roles, and pass their training period with flying colors. Outsourcing lets you work with seasoned providers who can fill positions quickly because they have access to a vast talent pool.
- Fully formed team. Recruiting one developer is tedious. Imagine doing that for an entire team. Clients starting from scratch need to search for multiple developers simultaneously. Outsourcing allows businesses to assemble an entire team immediately, complete with developers, UI/UX designers, project managers, and business analysts.
- Strategic focus. With outsourcing, companies can appoint an internal product manager to manage and oversee communication with the external team. However, the BPO provider oversees the administration’s finer details.
Challenges of Outsourcing Cryptocurrency and Blockchain Development
While cryptocurrency and blockchain development BPO has many benefits, it also entails risks and potential challenges. They are as follows:
- Communication issues. Any successful development project needs good communication, especially when outsourcing a new technology initiative.
- Security concerns. Developing software outside the company’s internal platform can be daunting for most leaders. Understandably, they might have concerns about intellectual property and cybersecurity.
- Control problems. Outsourcing necessitates managers letting go of control and handing off tasks to an external party. They must brief the third-party team and trust it can deliver what is needed.
The good news is that you can mitigate the risks by finding the right vendor and ensuring careful management. Make sure you choose quality outsourcing providers, negotiate with them, and have them sign non-disclosure agreements.
Key Considerations and Compliance Aspects of Cryptocurrency BPO
Although many businesses have the know-how and scale to develop and manage a blockchain network, exploring outsourcing is only ideal if the company meets any of the following criteria:
- This is their first blockchain project.
- They do not have blockchain developers.
- They are under strict deadlines.
Cryptocurrency compliance is another factor to consider. It is an essential aspect of the digital economy, so businesses must set up and enforce strict internal controls, do thorough risk assessments, and develop robust mitigation strategies to stop fraud and stay in line with regulations.
As part of the overall internal control system, the risk management cycle includes the following steps:
- Build a risk and compliance committee.
- Determine cryptocurrency risks (e.g., risks related to customer onboarding, cybersecurity, data confidentiality, and blockchain technology).
- Determine and assess the scale of risks.
- Design a risk assessment and response strategy.
- Implement the strategy and delegate owner responsibilities.
- Monitor the mitigation controls for the suggested fraud risk.
The Bottom Line
Cryptocurrency and blockchain have already changed the world. A BPO plan is vital to managing these disruptive technologies and thriving in the market.
Companies must find competent developers, understand blockchain principles, and implement them successfully. Teaming up with a BPO company helps businesses find the best project developers.
At a time when technology is growing faster than ever, how do you manage to keep up? Partnering with a BPO provider such as Unity Communications can help. Let’s connect to find out more!
