6 Reasons Why Outsourcing Software Development Fails

Avantika Shergil By Avantika Shergil  |  Dec 19, 2023  |  Outsourcing Software Development
Software Development Outsourcing Failure - Problems and Solutions

As reported by Statista, the IT outsourcing market revenue is projected to reach a remarkable figure of more than 460 billion dollars in 2024, and with this growth trajectory, the market will witness a CAGR of 11.07% between 2023 and 2028. The figure says that the trend is not going to settle in the future, but do you know that there are chances that improper execution results in a mishap, and outsourcing software development fails miserably?

Do you know that the software development process is comprised of several steps and stages from building a wireframe to demonstrating a prototype? While outsourcing your software product development, in the entire software development life cycle, there are ample chances that unclarity on project scope, mismanagement, and communication gaps can ruin the project and lead to the failure of your software project.

Failing to successfully outsource your software development not only do you lose your mind but also your brainchild with the cost of your money and time. Before this nightmare strikes you hard, our little efforts in this blog will take you through the top 6 reasons why outsourcing software development fails and how to avoid them can help you dearly. Furthermore, we will also share some best practices and tips for successful outsourcing.

Common mistakes in outsourcing software development and how to avoid them?

Software development outsourcing success involves taking care of many factors and reasons. It is suggested that you keep a checklist of certain precautions so that the project executed at offshore development centers is in line with your business objectives and does not deviate from the right path. Path deviation will lead your software development outsourcing on the path from success to failure in a very short amount of time.

Difference between scope and execution

Mismatched expectations are the primary cause of outsourced software development failure. This simply means that what you said as your business objectives and defined as project scopes are not completely understood and there is a difference between what you want and what they develop for you.

Another issue is that if it takes too long to build software, the scope and demands for the features change over time. For instance, the latest trends keep changing periodically and, therefore, the features you want in your products today may turn obsolete when you get the final product in your hand.

On the other hand, it is also quite a common practice that the sales team would make you tall promises about your products and when it finally goes to the production team, the software developers find a lot of restrictions due to technical or practical limitations.

Solution: Keep everything documented from SWOT analysis to project scopes of all kinds. Written documents with records in emails and other recorded calls will help you have shreds of evidence of what you wanted and had explained to the software development outsourcing company. If they deviate from the objectives, you have proof to show and put your point.

Keeping up the pace with the latest trends, features and facilities is essential for your software product or solution. Hence, to get what exactly you want in your product that meets the present demands of your customers, you may ask your team to follow the latest software development trends to keep your product advanced and future-ready.

Cheap and the best

Quality comes with a price, but this norm does not exist for many entrepreneurs. Outsourcing software development to an offshore company that got you the cheapest quote (price) to build your product is not necessarily the best. Many businesspersons fall into the trap of the cheapest prices and lose their project because the providers turn out to be unprofessional or naïve and drop their prices only to grab clients.

Such companies may allure you with their hiring models and the sales team can show you dreams of customized full-fledged software tools catering to your business objectives at unbelievable prices. One of the problems with outsourcing your project to such companies is that they don’t pay any heed when it comes to solving any escalation raised by you. Ultimately, the cheaper price proves to be a cheaper company with no potential to build quality solutions for you.

Solution: Coming out of the norm that cheap could be the best will save you from this hassle. There are best options for software development outsourcing provided you flex your budget a bit. Do not get stuck to the cheapest quotation you get from shortlisted companies. Choose your tech partner wisely by asking them questions.

Inferior competency

There exist two factors to check on the competency. A software development company itself and its in-house developers. Inadequate skills of expertise or lack of technical knowledge will result in messing up your project. Inferior competency of software developers will make them sluggish in gaining the project scope and, as a result, they may not implement all the features and facilities you require. Additionally, programmers with inferior technical knowledge are likely to miss deadlines and deliverables making your project costlier and delayed in time to market.

Solution: Most software development companies have a superior hiring model wherein they allow their clients to handpick the best talent from the floor. That said, clients can build their own team of dedicated software developers. Grabbing this opportunity, you can hire software developers of your choice after scanning their capabilities and understanding their programming knowledge in depth.

Poor communication

One of the biggest challenges in outsourcing software development is keeping up the communication throughout the project. Fair and regular communication is like a bridge between software development team members and you to understand project scopes and know the product’s whereabouts periodically. Poor communication breaks the channel of empathetic quotient between stakeholders and programmers leading to ambiguity and ultimately losing the project.

Solution: Miscommunication can be kept at bay by setting the practice of regular updates for milestones and deliverables right before the project kickstarts. This means that while signing the contract or agreement, you need to fix the channel of communication that should happen regularly. Tools such as video conferencing, CRMs, and productivity software tools will help you stay in touch with IT outsourcing companies.

Lack of security

Neglecting intellectual property and security concerns could be another threat to your outsourced software product. Data security and project confidentiality are two primary factors you must not ignore right from the project’s inception.

Solution: Most of the renowned software development companies are assured of documentation and legal agreements to stay safe. Because such companies provide services that are protected in various ways, signing the NDA, being the primary one. You can also ask your outsourcing service providers about which other security measures they take such as CCTV and physical checks of all the workforce on the floor. You also need to have an eye on the software development outsourcing company that has adopted the BYOD policy.

Substandard coding practice

Computer programming follows certain standards in building software products. You would incur problems with outsourcing when developers don’t abide by any coding standards. Such practice can lead to unwanted software bugs, security concerns, poor product performance, and malfunctioning of certain features and facilities. Poorly written codes make the code hard to understand, maintain, test, and parse.

Solution: To keep your project safe and secure, you should make sure that programmers follow coding standards and use proper tools to avoid short outcomes of the project. It is essential to study risk management in software development to ensure avoiding technical risks and project risks. Applying the best practices of software engineering will keep your product safer and specific to the scope. You can also check out specific standards your project requires; for instance, healthcare IT projects would require HIPAA standards to follow to avoid legal hassles.

The practice of software development outsourcing can benefit enterprises of all sizes and kinds with myriad advantages. To avoid failure, you need to plan carefully, communicate effectively, and monitor the progress of your project. By following these tips, you can ensure that your software outsourcing development is a success and that you get the best value for your investment.

Avantika Shergil Avantika Shergil   |  Dec 19, 2023

An enthusiastic Operations Manager at TopDevelopers.co, coordinating and managing the technical and functional areas. She is an adventure lover, passionate traveler, an admirer of nature, who believes that a cup of coffee is the prime source to feel rejuvenated. Researching and writing about technology keeps her boosted and enhances her professional journeying.


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