What are the advantages and disadvantages of outsourcing software development?

calender May 29, 2023
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Sunil Kumar

Principle Solution Architect

Keeping your project safe from software development outsourcing mistakes is necessary to ensure a lucrative outcome. It is because outsourcing software development is a global trend that rapidly grows as more organizations recognize the value of outsourcing in product quality and cost savings, so much so that the global IT outsourcing market revenue could reach $587 billion by the end of 2027. You can benefit from such growth if you deal with software outsourcing challenges well and make it work for your project.

Hiring offshore has become another famous trend in the software development industry as it is easier for mobile app startups to afford offshore developers than hiring an in-house development team. Outsourcing to offshore developers and building a remote team can provide the solutions you need to ensure top-tier product quality while protecting your budget. Therefore, a Future Workforce Report by Upwork found that 73% of all departments will have remote workers by 2028.

Choosing an offshore team can have advantages but it can also lead to risk and failure that turn it into one of the most expensive software development outsourcing mistakes. That is why you need a tested strategy to help you hire and manage a remote team successfully and to the benefit of your businesses. Here, you can learn about the software outsourcing challenges, which provide some helpful industry insights about the process.

9 Mistakes to Avoid When Outsourcing Software Development

  1. Poorly Planned Software Project
  2. Lack of Technical Knowledge and Management
  3. Poorly Designed Hiring Process
  4. Hiring Outside the Industry
  5. Uncoordinated Communication and Collaboration
  6. Underestimating Code Reviews
  7. Underestimating Frequent QA Testing
  8. Insufficient Project Tracking and Monitoring
  9. Hiring Onshore or Nearshore
software development outsourcing challenges

Poorly Planned Software Project

Creating a good software development plan is essential to better explain the goals and process to everyone involved. It is because outsourcing to remote developers requires transparent communication in order to make it work. Making every aspect of the project clear to everyone can help avoid misunderstandings and poor collaboration while preventing errors in the software development process.

  1. What is the business sector of the software project?
  2. Who is the target audience?
  3. Which app development outsourcing strategy do you plan to use?
  4. What are project timelines?
  5. What are the final deadlines?
  6. What do you hope to achieve with a developed product?

A detailed project plan helps you define exact requirements when outsourcing software development. And it also enables you to ensure that everyone in the team is on the same page about project goals, processes, and timelines. It allows the outsourced team to analyze your needs more accurately and follow a single development direction that avoids miscommunication and poorly-developed software products.

For example, if your software needs to be a multilingual platform, but the hired team can only incorporate one or two languages, it can lead to an average product or waste your time/money by forcing you to consider new developers. Knowing and planning such requirements carefully before outsourcing allows you to choose a team that can meet them.

Lack of Technical Knowledge and Management

You cannot let your project be in the hands of developers entirely and ensure the expected results at the end of the project. Frequent monitoring and reviews are necessary even if the outsourcing team has all the technical skills and experience. That is why being unaware of the technical aspects (of software development) can hinder your ability to monitor, review, and manage the process effectively.

In such a case, you must hire an in-house expert/manager to monitor and review the progress of the outsourcing team. Many outsourcing companies come with a project manager, but having your own is the best approach since that expert would directly work for you and your business.

Hiring such an expert saves you from the additional effort of frequent monitoring while keeping your project under the eyes of an expert that will ensure it moves in the best direction. It also helps identify flaws/errors that could lead to a poor-quality product.

Poorly Designed Hiring Process

Knowing which aspects of the software development project require an outsourcing team and ones that require in-house effort allows you to plan the hiring process effectively. Without it, you can hire a team that may not be suitable or completely necessary, leading to a costly project that would have been avoidable with some strategic planning.

For example, a hiring process that does not test coding skills could lead to extended development time when you find many coding errors during and after development later in the process.

Researching the software outsourcing company is the first step in creating an effective hiring process, and the rest you can check out below:

  1. Analyze their technical skills and experience by checking out their previous work.
  2. Check out their portfolio and see if they have experience in your or similar industries.
  3. Study reviews from past clients and talks to them about the outsourcing partner if possible.
  4. Ask them about the methods, technology, and trends they use or follow in software development.
  5. Conduct a background check on management and their credentials.
  6. Ask them how they approach Intellectual Property rights and sensitive data.
  7. Ask them if they can create a quick prototype for mobile apps as a hiring process test.
  8. Ask them to explain how they deal with miscommunication, uncoordinated remote work, and language barriers.
  9. Enquire about tools they use for communication in a remote team and management.
  10. Ask them about their preferred work hours and whether they are open to being available 24/7 for urgent meetings if and when necessary.

Getting answers to these questions and more will help you understand the team better and avoid any software outsourcing challenges that could lead to unprecedented or costly outcomes.

Hiring Outside the Industry

All software developers understand the necessity of theoretical and practical knowledge of an industry to build a good-quality product for it. Without it, highly skilled developers and designers can get confused when they face industry-specific problems.

For example, your outsourced healthcare app development team may not create a user-friendly healthcare app that can provide value if they have no previous experience in the healthcare industry or a decent understanding of it.

In conclusion, hiring outside the industry can waste time and money while leaving you with a bad-quality product. Make sure you confirm the company experience of the offshore team in your industry before you hire them. It will help you ensure that you spend your time and money on a quality product of value with the assistance of experts that understand every element of your industry.

An outsourcing team that cannot keep up with the latest trends and technology through their process can also be a big mistake. You need your software product to be up-to-date with technology and IT trends. Make sure you hire a remote development team that knows how to make it happen.

Uncoordinated Communication and Collaboration

Both parties will be victims of miscommunication and mistakes in a development project without a carefully planned communication and collaboration process. A good communication process with reviews and feedback is essential for productive collaboration in a software development team. Without it, the project can involve uncoordinated goals, deliveries, and failures that can delay deployment.

Create a communication plan which helps prevent miscommunication or misunderstandings inside a team. Most businesses give more importance to developers, designers, and QA engineers when hiring an outsourcing agency (and they should). However, they are not helpful if the outsourcing agency has poor communication management skills and customer service. From misunderstandings in project cycles to missed progress updates, a lack of constant and planned communication can bring down the productivity of any good project.

Plan or tell the outsourced team to plan daily and weekly meetings with everyone involved in the project as it is in Agile-drive to keep everyone on the same page. With such meetings, every team member knows about the progress made by the team every day toward the same goal and identifies any errors/mistakes made by them or someone else. Whether it’s coding, UI/UX design, or app testing, make sure your process involves collaboration between teams regularly to increase productivity.

It also helps avoid problems usually identified after the product development is complete, where any delay or rework will cost you more money and time. Analyze factors like different time-zone, language barriers, and work hours to plan the most effective collaboration between teams and the whole team.

Underestimating Code Reviews

Code review is a process where developers can check the codes of their peers to identify and deal with errors. It allows a development team to ensure their coding approach will not cause any errors when the development is finally complete. You can also make sure the developers are skilled in coding with tests. Testing the coding work will help you see whether it has flaws and needs rework.

Such a process basically saves you a lot of time you would have to spend on application testing or dealing with functionality issues after the software deployment, which can force your target users to consider your competitors. Ensure that the outsourced agency understands the importance of code reviews and plans them in every stage of the development process. Use your own in-house expert to monitor the code review process and track the progress or any mistakes.

Underestimating Frequent QA Testing

Quality assurance (QA) that includes manual, automated, and user acceptance testing is crucial to ensure the software product meets quality requirements. That is why one of the common mistakes any company can make in software development is underestimating the essentiality of frequent software product testing. Every software has bugs, coding errors, and design issues that can pile up if you do not identify and deal with them before deployment.

You must test your software product after every project cycle to find and deal with such issues while they are small. Testing your software product as the process continues helps you identify mistakes or errors from the early days of development and deal with them while preventing them in further development stages.

Such QA testing will allow you to avoid a scenario where your deployed product has crashes, functionality issues, and coding errors that are damaging the user experience, which can lead to customer defection.

Regular software quality control saves money, time, and additional effort you would need to deal with all the problems. Ensure that the outsourced agency has an effective plan for automated, manual, and user acceptance testing for your software development project. It will help you ensure a software product that meets market and user expectations, ensuring a good user experience and better revenue for your business in the long run.

Insufficient Project Tracking and Monitoring

Most businesses do not prefer constant progress monitoring when outsourcing software development to avoid micromanagement, which can often lead to a bad-quality project and failure. Daily and weekly updates about the project are necessary to prevent such mistakes, especially with an outsourced team.

Consequences of Less/No Project Monitoring

  1. Uncoordinated Project Goals
  2. Miscommunication
  3. Poor-quality Deliverables
  4. Ineffective Work Environment
Consequences of No Project Monitoring in offshore development

The best way to deal with such a process is by hiring an agile-driven software development team or making the methodology mandatory for any outsourced development team you hire.

Agile requires software development to conduct a weekly review process and daily standups that require everyone working on the project to talk about the work they did the day before, the work they are doing today, and the overall progress in their work. It allows the whole team to be aware of the ongoing progress made by every team member. You can be a part of this process or get your in-house manager to monitor it in order to ensure that the project is turning out as expected and not leading towards a time-consuming or expensive outcome.

Hiring Onshore or Nearshore

Every software development project has a limited budget, while some have flexible ones that you can increase according to project requirements. It can lead to certain software outsourcing challenges as hiring a team can either save or increase your budget. Outsourcing software development provides you with three options: Onshore, Nearshore, and Offshore developers. The ideal option in these is offshore developers when you need quality with a limited budget.

However, hiring onshore or nearshore developers will stretch your budget from the beginning. Onshore and offshore developers are expensive, especially for businesses based in the USA, UK, and Canada. Onshore and nearshore developers for such countries have a cost range that factors in many things besides the software development process. (For example, the economy of a country)

So, if you are a business owner from the USA, hiring an onshore or nearshore developer will mean hiring developers based in the USA or Canada, which will be highly expensive and nearly impossible for you to hire if you are a mobile app startup. It is when offshore developers can be the solution for all your requirements.

Offshore developers from India and Ukraine are known for providing quality development solutions at much lower costs (compared to developers from the US and UK). They are the best countries to outsource software development for quality solutions at affordable/reasonable costs.

As a business trying to enter the app market, you need such developers to see how your business can perform through mobile apps without spending large sums of money on development. When outsourcing software development, always outsource to offshore developers to guarantee quality solutions for your business at a price range that is easy on the budget.

Conclusion

Generally, many software development outsourcing mistakes you can make are due to miscommunication, poor project planning and management, and an unsuitable hiring process. Dealing with these issues automatically deals with most of the mistakes and directs your project toward a beneficial outcome. Another way to outsource better is by hiring a self-managed team with experience in multiple remote software development projects and a portfolio that better represents that experience or skills.

Whether you are hiring for web or mobile app development services, hiring Agile-driven software companies from India is the most straightforward to ensure the development project management is always productive, even without monitoring and progress tracking from your side. They always aim to build something unique and will surely deliver a software product of top-tier quality for your business.

Frequently Asked Questions

What is KPI in outsourcing?

The key performance indicator (KPI) in outsourcing is the evaluation of the project progress toward lucrative outcomes and goals of a business. It is how you can determine whether an outsourcing agency is building a product that can provide value.

What are the principles of outsourcing?

Some principles of outsourcing are regular communication, coordinated collaboration, building trust through quality outcomes, and complete transparency in processes.

What are the ethical issues of outsourcing?

Unhygienic work environments, harassment and discrimination, misuse of company resources, abusive leaders and managers, child labor, and unrealistic project goals are the common ethical issues in outsourcing.

What is the best strategy for outsourcing?

Check out their portfolios to evaluate the skills and experience of the outsourcing agency and talk to their client to get a better idea of the team. It is the best strategy to confirm whether the agency has what it takes to meet your project requirements and deliver a quality product.

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