I have recently spent time talking with early stage companies about application development. They’re all gung-ho to launch their application as a service. They’re giving the developers part ownership in the company. They’re talking to potential clients. You know the excitement!

WHOA! I find that several areas are often overlooked during the development process that leave the business vulnerable.

1. Define the finished application and determine the cost to develop it.  Compare that cost to your estimates for compensation for the developer as an owner. An ownership position in the company may be significantly more compensation than you would have paid to just develop the application. You may be fine with that…just be aware and don’t give away the farm.
2. Before bringing the developer on as an owner, be sure this person is someone you can work with as an owner. Ending the relationship with an equity partner is not as easy as a Vegas divorce. It can be very messy and painful.
3. Be sure the application becomes the property of your company, a work for hire. Why? This is to protect you in the event of problems with the developer.
4. Demand the application developer provide you a copy of all files, processes and documentation for the application. You must protect your business and your clients in the event the developer’s business fails. The documentation must be clear enough that you could hand it to another developer and they could begin supporting your business.
5. Whether you are hosting the application or it is hosted by the developer, ensure your client’s data is protected (safe from hacking, encrypted, etc.)
6. If you are not hosting the application on your own servers, ensure the developer or the company hosting it has a disaster recovery plan that has been tested. A SAS70 Type-2 audit shows they have actually tested their plan. A Type-1 audit says the plan works on paper. You need a Type-2 audit.
7. If you are hosting the application you need a disaster recovery plan. You must protect your clients. If you lose their information you can be subject to a lawsuit.

These are just a few of the areas that can leave a business vulnerable.

Wishing you safe passage through the IT Minefield!

Other posts that might be of interest:

- 5 Steps to Control Website Development Costs  http://bit.ly/3uyT1J

- 5 Essential Practices of the Best Data Backup Companies  http://bit.ly/3NjMJ3

- How Important is I.T. in your Business?   http://bit.ly/2vAUyO (introduction to disaster recovery)

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These topics are discussed in greater detail in Navigating the I.T. Minefield – Straight Talk for the Small Enterprise.

Leslie Knight is a small business consultant with over 20 years of experience in Information Technology management in Fortune 500 companies.  She applies her experience in Corporate America saving them millions to smaller entrepreneurial enterprises. She is also the author of Navigating the I.T. Minefield.

To download “When Disaster Strikes” from Navigating the I.T. Minefield: Straight Talk for the Small Enterprise, go to http://bit.ly/zAcdl.  To purchase your copy, please visit http://bit.ly/SNL4W.