The top three problems with outsourcing software development: Causes and solutions

Outsourcing software development is the most affordable and fastest way to create and launch a startup project. However, most founders are wary of hiring an external team after hearing dozens of failure stories. Overspending, late delivery, and poor quality are among the common complaints on Clutch.co and Upwork. But if you know what causes these problems, you can mitigate the risks and improve your chances of launching a successful project on time. Use our tips for choosing the right team for custom software development.

Budget slippage

If IBM can underestimate the development budget by 1,600%, does that mean there's no chance of launching a project without breaking the bank? Unsurprisingly, lack of money is the second most common reason for startup failure. And mobile or web development can be the cause, even if initial estimates are well below the acceptable amount.

The most common causes of budget slippage are:

  • Unrealistic expectations and estimates that make you think you can get a quality product for next to nothing.
  • Non-existent project discovery, with little or no effort devoted to requirements elicitation and the creation of a SRS (system requirements specification).
  • Constantly changing requirements, a direct result of the lack of a SRS, which add extra hours to the schedule and drive up costs.
  • The wrong engagement model (fixed price or time and materials) for your project can also lead to excessive expenses.

One of the most effective ways to avoid scope and budget slippage is to spend more time researching and negotiating early in the project. You may want to rush into development, but the development team needs to understand your business and customer needs first. Let's say you take the time to distill your idea into an MVP (minimum viable product), clearly define your requirements and stick to them. In this case, there is little chance that an experienced software development company will go over the estimated budget.

Late delivery

You may have heard the sad story of the giant Airbus A380 that became obsolete before it even hit the market due to constant delays in design and development. The same is true for the one in five startups that get overtaken by the competition and go bankrupt before achieving success. While custom software development can take anywhere from a few weeks to a few years, missing a launch deadline is more common than you might imagine.

Why do IT vendors miss deadlines?

  1. Once again, poor research and discovery is to blame, as lack of project information leads to unrealistic time estimates and missed deadlines.
  2. Poor project management, without real-time progress tracking and regular reporting, can also cause delays, as individual team members create bottlenecks and slow the development process.
  3. Insufficient technical skills and expertise that cut into the budget can lengthen development time, as developers learn new technologies along the way and acquire new skills at your expense.

Now you know the value of preliminary work, but it doesn't stop with the creation of an SRS. Make sure the engineers working on your project have sufficient expertise by reviewing their portfolios or testing them. You also need to develop a communication and project management framework that will work for you and the development team. Hold regular calls or video conferences to discuss issues that arise and track the project's progress through an online project management system to ensure the development process stays on track. Bringing in a project manager to join the team pays off, even if you can do the project management tasks yourself to save money and even time.

Poor quality

No software development company can promise perfect results, because even giants like Google and Facebook make mistakes that cost millions of dollars. While small, easily fixable mistakes are almost inevitable, persistent bugs that cause constant crashes and a poor user experience can ruin your startup's reputation from day one. It's easy to blame incompetent developers, but poor quality code can come from many sources, including:

  • A poor choice of architecture and technology stack. If you can't make these decisions, it helps to hire a senior software engineer to suggest the best solutions that will form the foundation of the project and define its long-term performance.
  • Insufficient quality assurance (QA) management. Automated and manual testing must be present at every stage of agile development to ensure that no bugs make it into the final product.
  • Lack of experience with the chosen technologies. When dealing with legacy systems or unique technology needs, you may have trouble finding sufficiently skilled software engineers, resulting in poor quality, excessive expenses, and delivery delays.

Like all other aspects of web development, quality depends on proper planning, management and professional expertise. Your selection of potential technical partners should include a review of the proposed technology stack and architecture solutions, as well as quality assurance practices, and a list of previous projects based on the target languages or technologies.

Note that the three most common problems with outsourcing software development can be avoided if you do your homework before signing a contract. Don't view preliminary research and negotiations as a waste of time and resources, but rather as an investment in a quick, efficient, and successful development process.