Nine Mistakes to Avoid When Outsourcing Software Development banner

Outsourcing Software Development: Nine Mistakes You Can't Afford to Make

Trung Tran | 13/07/2024

What are you looking for here? Some useful information about software outsourcing services? Well, that’s good for you because you have come to the right place. This is where we are about to walk you through crucial tips to outsource right. Before we start, you should keep in mind that the guide is not going to sing you to sleep with a bunch of basic information that you already know but will instead give you practical insights. Let’s dive in.

Key Takeaways:

Whether you are about to outsource some tasks or the whole software development life cycle, make sure you are mindful of the following:

Proceed with caution and be well aware of the possible blunders when outsourcing software development services.
Understand your project requirements and learn how to filter out the right software outsourcing company.
You can also use some tips to navigate through the journey of working with an outsourced software development company.

Proceed with caution and be well aware of the possible blunders when outsourcing software development services.
Understand your project requirements and learn how to filter out the right software outsourcing company.
You can also use some tips to navigate through the journey of working with an outsourced software development company.

Avoid Common Mistakes When Outsourcing Software Development Projects

If you do not wish to run back and forth to tackle the consequences, stay one step ahead and prevent risks from occurring. These are often seen as obvious tips. Unfortunately, not every business owner or project manager can actually implement it.

Outsource Without Sufficient Knowledge

No exaggeration. A lack of knowledge about software development outsourcing services is a deadly mistake that most business owners make when first starting out. It is like entering a dark tunnel without a flashlight, and you just go with the flow until you hit a dead end. It may hurt the entire project or, even worse, result in a failure or loss for your business.

Fortunately, this mistake is dodgeable. Go and search for software development outsourcing 101 guides. Make sure you master the basics first, ranging from concept, outsourcing models and types to pros and cons, and lastly how to select the right partner.

The absence or insufficiency of knowledge often leads business owners to buy common outsourcing myths or misconceptions. Thereby, they might fall into other pitfalls. Therefore, don’t be a novice.

Consider Costs as the Only Factor That Matters

Indeed, outsourcing enables cost reduction. Thus, it is understandable that businesses tend to prioritize cutting costs when deciding on one service or partner. If cost-savings always come first, you may end up sacrificing quality and expertise. And it is a recipe for disaster.

Besides monetary considerations, technical expertise, experience, credibility, and heaps more factors. Cost should be factored in, but it should not be the sole determining factor. Remember, you get what you pay for.

Fail to Clarify Project Requirements & Expectations

Do not look for a software development outsourcing partner unless you have already done well in project planning. Usually, most businesses have a vague concept of what they envision and expect from an outsourcing partner and its deliverables.

Make sure you clearly define the project scope and specifications (including objectives, timelines, expected deliverables, communication protocols, etc.) from the outset. The more detailed your project requirements are, the more precise proposals you will get. Keep in mind that no confusion or ambiguity is tolerated at this point if you don’t wish to deal with endless revisions, reworks, or failures.

Skip or Conduct Due Diligence Reluctantly

In the rush to outsource, some businesses often may take due diligence in a lackadaisical manner. Be it an urgent timeline, limited budget, or shortages of talent, they tend to be reliant on merely the promises or endorsements from the software development outsourcing company.

Conduct background checks and face-to-face/online meets with potential vendors to discuss and evaluate their capabilities, communication skills, ethics and values, past projects, working processes, financial stability, or risks. That’s necessary. But do double-check. Verify and validate credibility by researching company reviews, clients’ testimonials, case studies, certifications, prizes, and more.

Only there when you can combine findings from both approaches to make a data-driven decision. A meticulous due diligence process will help you avoid choosing the wrong partner, then why not do it willingly?

Rush Into an Agreement

Most businesses resorting to outsourcing are under some kind of pressure related to budget or time constraints. As a consequence, negotiating and signing contracts turn out to be more hasty, especially when you are considering multiple software outsourcing companies at a time. Hence, crucial clauses are left untouched or lightly defined with the intention of saving time. And guess what? It does not end well often.

A sincere advice is to take time and analyze the contract thoroughly and explicitly. Software development agreements vary by each development team or project. Each type comprises different terms and conditions, such as the indemnification clause, data security and privacy policies, intellectual property rights, termination process, and penalties for delays or breaches.

So, you must fully understand what you are about to sign up for. Make sure all the key points of the software development contract are validated and well-documented. Do not hesitate to request adjustments because a contract reflects a win-win agreement for both sides. Good software development outsourcing companies are willing to negotiate and make necessary amendments with you until all parties are satisfied.

Neglect Communication & Collaboration

Don’t ever think that outsourcing relieves you from “babysitting” your development team. Well, not entirely true. Especially when you are leveraging the dedicated team model.

When you delegate a software project to a third-party vendor, efficient communication and collaboration are of the utmost priority. You must be prepared for the fact that your extended team of software engineers is not located within the same region or time zone (could be nearshore or offshore teams). As a result, you have to spend more effort to keep the communication line clear and fruitful between your in-house team and their counterparts run by external software development companies.

If you have a reliable partner by your side, then you have fewer concerns in this regard because most software outsourcing providers, especially competent ones, have their own proven project management tools in place, where transparency and collaboration are guaranteed.

Go for the Wrong Outsourcing Model

Outsourcing a software development project is a broad term that covers different service models. They are often separated into multiple categories, and each of them aims to serve the specific needs and purposes of a project or a team. In reality, businesses often reach out to outsourcing software development companies for the common software development outsourcing models:

IT Staff Augmentation

Extend your internal team with desired skills, resources, and expertise in the short term. With staff augmentation, you can hire remote developers to work with you on a specific project and for a defined period.

Project-Based Outsourcing

This outsourcing model involves assigning a specific project, product, or task with a pre-defined scope and timeline to the service provider. It can be project planning, UI/UX designing, coding, QA testing, etc. Project-based outsourcing is commonly trusted for its budget-friendliness, risk minimization, and faster time-to-market.

Dedicated Software Development Teams/Managed Service Teams

Hire an outsourced team to specifically handle certain parts of your software product in the long term. Oftentimes, this outsourcing strategy can be applied to well-defined and self-contained projects. With this model, you will retain control and management over the entire process while entrusting the technical implementation to the extension of your in-house development team.

Build-Operate-Transfer (BOT)

A combination of the previous two models with an added option to transfer project ownership to you, usually after a pre-defined period. This outsourcing model – Build-Operate-Transfer (BOT) – is usually used to set a long-term presence in the target outsourcing country or region.

There can be more custom outsourcing models that cater to one specific business or project. The ultimate key here is not to blindly follow any model but to evaluate and choose the most suitable one for your business goals and requirements at each stage of project development. Keep in mind that you may need more than one model or switch between them as your project evolves.

Misjudge an Outsourcing Partner & Stick to the Wrong One

There are nuances that separate a competent software outsourcing company from the rest of the pack. There is no guarantee that your choice is the best until you can verify the project execution processes and deliverables.

Despite the fact that you have done well in background-checking and due diligence, the rate of picking the wrong software outsourcing partner is never zero. Moreover, you should always keep your eyes open and be mindful of any red flags that potentially indicate substandard performance. Remember! Every little detail can reveal some hidden traits of your partner.

Another common yet avoidable mistake is to continue to work with the chosen outsourcing software development company even when the collaboration is going south. This can be due to the fact that business owners do not want to go through the process of finding an outsourcing agency all over again. The signs of a failed partnership are often manifested through obvious symptoms like constant missed deadlines, low-quality deliverables, lack of communication/transparency, and significant breaches in terms of the contract. Sometimes, it can be as subtle as a feeling of discomfort and uneasiness while working with them. Either way, you should never overlook any of these signals.

If things don’t turn out as planned, it is never too late to switch partners and go after the one that fits better with your business goals and visions.

Ignore Cultural Differences

When companies outsource software development services, they may encounter disputes or disagreements with their outsourcing partner, mostly due to cultural differences. This is a reasonable trade-off for tapping into the global talent pool.

Talented software engineers come from different tech hubs around the world. Hence, they are unique individuals with their own values, beliefs, working styles, and heaps more. The uniqueness of culture brings benefits as well as challenges.

However, business owners and project managers should never underestimate the cultural compatibility between them and the software development vendor. First of all, choose an outsourcing destination that is closely aligned with your culture and work ethic. Secondly, you need to prepare for an open-minded approach towards understanding different cultures and work environments. Thirdly, embrace diversity by implementing proper cultural awareness and sensitivity training for both your in-house developers and the outsourced team. With preparation in advance, you can help bridge any potential gaps and build a harmonious working relationship between parties as if all are under the same roof.

At the current time, it is advised to outsource development to Vietnam. The country is shining as the best place in the world to hire remote software developers and do tech business. Vietnam offers multiple advantages, making it worth your consideration.

A few words before ending this section: Every mistake counts. One misstep you make can cost you dearly. So, be cautious.

Outsource to the Right Software Development Company; Outsource to Orient Software

Outsource Without Sufficient Knowledge

The software development industry is on fire, and outsourcing service companies are mushrooming in number across the globe. Choices are many, but not all are equal in terms of quality, performance, and value for money. Therefore, more than ever, business owners like you need to stay alert and be careful when selecting an outsourcing service provider over another.

Team up with Orient Software, and you have a trustworthy outsourcing partner right here.

Established in 2005, Orient Software has been operating for nearly two decades in the tech industry. At the moment, we are proud to be one of the biggest names in Vietnam for custom software development and outsourcing services. Behind us is a track record of successful software projects across industries and a large team of experienced developers and tech talent. We not only can provide you with resources or technical support, but we also offer you our professional guidance and advisory services.

Our reputation can speak for itself. If you have any queries, do not hesitate to request a meeting to discuss further with us. We always welcome you with open arms. Drop a line and leave the reaching out to us.