outsourcing problems

The Most Common Problems of Outsourcing Software Development and How to Avoid Them

The outsourcing niche is one of the largest industries with an estimated cost of over $92 billion—not only in tech but overall. The numbers truly reflect how much tech is dependent on outsourcing services. The biggest chunk is attributed to software development. For an industry that big, major problems with outsourcing will arise. These include contractor integrity, hidden costs, intellectual property ownership, cultural and communication barriers, and unsatisfactory technical expertise. However, the good thing is that these issues are easy to manage, and we can help you. This article is the ultimate solution guide to help navigate problems associated with software development outsourcing.

Offshore development partner

Is outsourcing the most relevant option?

Outsourcing is not the universal solution for every business—that is one point that needs to be taken into consideration. Indeed, we have to say that the option is relevant. To back this claim, the billions of dollars spent on outsourcing per annum should be enough to indicate the relevance of the practice.

If you opt for this kind of staffing solution, it is essential to select the best option between outstaffing and outsourcing. Outsourcing is best for entities without a CTO so that you only hire teams with a technical manager. It is also a great solution when you have your product idea in mind and need an entire software development team with engineers, PMs, designers, and QA engineers.

Outstaffing works best with company models that already have an in-house team and when you want to hire qualified staff to perform specific tasks or extend your team.

The advantages of both models are cost and speed. However, that doesn’t mean every business should outsource or outstaff engineers every time they need a developer. In-house engineers are indispensable on a core development stage. You should spend more time and money to hire dedicated, involved, and high-quality engineers to work on your product development in the beginning. Then, you can outsource additional staff to extend your team.

When you clearly define your need to outsource software development, let’s explore the key risks you may face and learn about the solutions.

Problems with IT outsourcing

When mulling over the outsourcing of development tasks, most clients have doubts as there are a number of associated risks. Yes, as huge as the outsourcing industry is, there are several issues they will come across in software development outsourcing. However, most of them can be taken into consideration, analyzed, and avoided in future cooperation. Here are some outsourcing problems and ways to avoid them.

Incorrect vendor evaluation

During the stage of software agency selection, there is always a need for evaluation. One of the main problems that plague this part of outsourcing is the lack of knowledge and care in the assessment. It often ends up with meager software being developed, cultural and communication issues, misunderstandings, and missed deadlines.

A solution to the problem

Before hiring, for example, a contract back-end developer, thoroughly research their expertise. During this stage, you can check their reviews and experience—just look through previous clients’ feedback. If you want to hire contractors who can execute the job technically, make sure to conduct thorough interviews.

One mistake of outsourcing software development is allowing interviewers with little or no prior knowledge of software development to conduct interviews for software developers. Ensure that your CTO is part of your interviewing panel. The latter can look through their case studies and their background to decide if the outsourcing team has any expertise in the niche for which you are hiring. This simple preemptive measure will help you narrow down the best candidates.

Vendor evaluation

Poor communication and cultural barriers

When it comes to outsourcing software development or any other IT services, one of the biggest problems businesses currently face is the communication barrier. It has worsened with outsourcing sources taking to online platforms due to the pandemic to help reach an extensive audience. Communication is the backbone of ensuring that the software created fits the criteria defined before the contract. One thing that we can attest to is that most software outsourcing contracts end in disputes. These disputes are not usually because of a lack of technical ability but due to communication problems.

What are the reasons for miscommunication? First of all, poor English—the developers just can’t clearly define the scope of work. Additionally, there may be risks resulting from cultural barriers or different time zones of the in-house team, and an outsourced developer can also make matters worse.

A solution to the problem

The best way to cross the communication barrier is by hiring companies that can communicate in English clearly. To avoid miscommunication issues, you should have a CTO or project manager within your in-house team who will be in charge of managing the outsourced developers or contractors. They should be a good mediator between your development team and offshore developers. Another point is time differences. Always consider whether you and your team will feel comfortable communicating with an outsourcing company during your working hours. In addition, pay attention to the cultural peculiarities of the developers. For example, consider their holidays when discussing day-offs.

Next is the onboarding process, which is of the utmost importance for assembling your dream team. The remote team or developer will often have many questions about the project, and you need to take time to share all the details and make your in-house team find common ground with those remote contractors. This is the responsibility of a CTO or a project manager—the person who will organize any meetings and calls and regularly check that all the developers are on the same page. If you overlook this essential stage and don’t make them clearly understand what is required, it may result in inefficient solutions, poor software, and mismatched expectations. Additionally, a project could be delayed, or you may have to start from scratch. Either way, your company will lose time and money.

Unclear delivery expectations

One of the things that you will most likely come across if you decide to outsource software development is delays. We should make clear that not all contractors and outsourcing partners will give you problems, and they probably will keep working within time frames, but still, delays do happen. It means that you have to brace for delays in launch dates and incorporate allowances for those instances. There are also other solutions that you can consider to counter the effects of the delays.

A solution to the problem

One of the best solutions we have to come across when dealing with delays in outsourcing software development is setting concrete timeframes before the project. It should be an integral part of the outsourcing contract because no matter how good the software is, it dampens the process if not delivered on time. To manage the deadline, it’s easier to create milestones and checkpoints. By dividing the project into smaller tasks, it’s easier to stick to the overall timeframe.

As important as it is to have concrete contracts with set timeframes and punitive measures, it also helps you to be proactive. It may mean having some wiggle room to ensure that even if the requirements are not met, you can also have a bit of time to rectify the problem. Also, keep in mind that your development team may work in a different time zone.

Underestimated costs

Regardless of what project you are undertaking, money can be a huge problem. Underestimating costs is one of the main reasons behind unfinished software development projects. As the project proceeds, expenses that keep creeping up dampen the whole project. Financial issues will almost also result in constant delays and affect the overall quality of the developed software.

Underestimated cost

A solution to the problem

Proper planning is the primary way to eliminate the problem of underestimated costs. Be sure of all the deliverables that you require from the project before commencement. It will help you account for all the expenses included in the contract before the software development begins. Also, make sure that you are on the same page with the outsourced team about the experts—members of their team with whom you need to complete the project. Do you solely need the team of developers, or will they provide you with a PM or QA as well? Discuss and include it in your agreement before signing it and starting the project. With a comprehensive bill, you can budget and plan accordingly.

Software development rates tend to differ by region and expertise. Be sure to get as many quotations as possible to find a developer that fits your budget.

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Risk management

One of the most difficult components of the entire software development outsourcing process is managing risks. Without a risk-management protocol in place, it can lead to difficulties and failures during development, as there is no ideal software development process. You should always prepare for the worst-case scenario.

A solution to the problem

There is only one solution to this, and it’s quite simple. All you need to do is create a risk-management plan. We recommend consulting an IT professional to assist you in avoiding fickle solutions for potential project-shattering issues. With a reliable risk-management plan, you will be prepared for the worst scenario. And if it doesn’t come, you’ll have a concrete plan on how to deal with each type of problem.

Poor quality control

If you outsource development, it’s essential to have an in-house expert who can ensure everything is working as required. As a business owner, you can be too busy to check the quality of each detail, so make sure you assign this to the trustworthy and qualified QA engineer or an entire QA team.

A solution to the problem

Every time you outsource tasks, make sure you have an expert QA who can review, check, and test the completed work. Not having built-in quality control can result in unnecessary expenses, bugs, and poor-quality results. Of course, it’s better to have in-house QA engineers who can check the outsourced development, but if you outsource the entire software development process, having a QA specialist in this outsourced team is also a great solution.

Intellectual property safety

One thing that might seem obvious is that the client who pays for the program is the owner of the developed software, but, well, that is not always the case. In terms of intellectual property software, developers and software development teams may prefer an arrangement where they retain the software’s intellectual property. If you do not address the ownership issues in advance, chances are you will be spending a lot of time in court. Most people in the LinkedIn IT community have listed this as the biggest outsourcing issue.

Protect intellectual property

A solution to the problem

The ownership of software that was outsourced can be a huge problem. Thus, we recommend agreeing to a dual ownership arrangement with the contractor. It is a great initiative as it gives the developer a sense of ownership that often results in higher work quality. The arrangement often requires individuals to be signatories to the ownership contract. This will also work if you want to be the program’s sole owner.

Usually, the client owns the rights to the software being developed, which is why all these intricacies should be discussed before beginning the project. Additionally, when signing the outsourcing contract with an agency or developer, remember to address code ownership and draft a non-disclosure agreement (NDA).

Regardless of the arrangement, you decide on, you should have an agreement with the contractor that specifically addresses the ownership issue. Once you have an outsourcing contract in place, it is essential to get the software registered with the intellectual property board in the country where you plan to use the software.

Data loss

One of the worst problems resulting from outsourcing software development is data loss. In the modern age—data is everything—and losing it for whatever reason is unacceptable. Due to the high volumes of data involved in software development, it is quite common to end up with costly data losses.

A solution to the problem

The solution to data loss is to ensure that there are robust backup systems in place. There should also be an adequate security protocol in place for your in-house and outsourced teams. It is a virtually foolproof solution, so you won’t ever have to worry about data loss again.

Undefined exit path 

Every software development project eventually comes to an end. However, even in the middle of the process, you can change developers or the entire development team. If an exit path is not defined, chances are they could bring many problems. Most companies and entrepreneurs tend to overlook the exit strategy, but it is just as important as all the other components of the software development process. If you have no idea how to get around this problem, this may help.

A solution to the problem

An essential element is to have a knowledge transfer strategy in place. What this does is save lots of money in maintenance and repair costs. Discussions on the scope and length of the contracts will also go a long way in ensuring that there won’t be problems once the project is over. Be sure to include this as part of the contract, it should prevent post-development disputes.

Code uniformity

One thing about code is that it must be uniform to make a quality software program. Uniformity makes it easier for a house team to fix bugs after getting the outsourcing contract. If you hire a contractor that uses a different programming language, it will be difficult to maintain. This way, you might end up needing to rehire the contractor for maintenance.

A solution to the problem

We recommend developing software in a single language and with a similar architectural structure. This makes integration and maintenance easier. Trust us, the last thing you want to do is to spend money on maintenance that could have been avoided in the first place. Code uniformity will save you a lot of money in the long run.

After the software development, make sure that you have set measurable deliverables for maintainability and clarity. These are the two main qualities when it comes to code quality—functional testing and unit testing. These are key tests you need to ensure are executed before putting an approval stamp on the development. If you have a software development team already on board, you should include a peer-to-peer review as part of the testing.

Code uniformity

Pros of YouTeam vetting

With YouTeam vetting, you can find an outsourcing company or developer to take care of your project within 48 hours after launching the matching process. This way, you save time by only reviewing the best candidates. However, the process also has several other advantages.

Quality agencies

One thing that the YouTeam vetting procedure ensures is the consistent quality of the agencies we collaborate with. There are many dodgy outsourcing companies on the internet. Thus, it becomes essential to make sure that if you are doing business, you are dealing with reputable agencies with integrity. YouTeam does that for you. If you want a quality service that keeps your data secure and private, YouTeam vetting will make you feel like it was customized just for you. As part of the vetting process, YouTeam handpicks agencies based on industry reviews and the company’s integrity standards.

Individual screening

Even some of the best agencies in the IT industries have a few “bad apples”. To avoid this, the YouTeam vetting process also involves candidate screening. It means that every individual from an agency that will be working via the YouTeam platform will be tested.

Consistent reviews

YouTeam prides itself on consistent quality work. It is achieved by consistently auditing the quality of work produced by the agencies. It means that the agencies that remain in the YouTeam talent pool have consistently demonstrated their skill and will definitely produce high-quality results. YouTeam has a zero-tolerance policy when it comes to shoddy work, and it is one of the main reasons why the YouTeam vetting as a process and technique has received a lot of positive feedback.

As you go down the software development path, it is essential to look at the benefits of outsourcing and ensure that you aim to attain those. The best way to do it is by keeping in sync with the latest software development trends.

Get the best out of software development, find a reliable outsourcing partner, avoid the problems of outsourcing and enjoy!

Written by
Iryna Bilyk

Iryna Bilyk is an expert content marketing manager at YouTeam - a marketplace for instant engineering team extension. She passionately discovers and writes about technology, innovations, and software development solutions.

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