Top 10 common problems of software outsourcing

The global outsourcing market reached over 92bn dollars last year and has no sign of stopping its growth. According to Deloitte’s survey, 78% of companies are happy with their decision of choosing a third party to outsource part of their business. So, have you wondered what is their secret to fully take advantage of outsourcing and avoid failure? Let’s find out common problems of software outsourcing that you might have not expected before partnering with a service vendor in this article.

You are underestimated your real budget

The majority of businesses see outsourcing as a cost-cutting solution for their operational expenses. Yes, it is obviously the best way to help you save money but does not mean it’s cheap as chips. If you do not conduct a deep plan and analysis, you will end up spending over your initial cost estimation. The fastest and easiest solution is to ask your vendor to give you proper consultation since they must be a veteran player in this outsourcing game.

You have no experience working with a software service provider

Understanding how everything works is important when doing outsource. In fact, the hardest part is choosing a reliable vendor that can perfectly fit your needs. Once you find your trusted partner, all you need to do is setting clear expectations for both sides. Together with your provider, defining a vision of your product, development stages, and timeline as well as the needs for further support and maintenance of the product. An experienced and trusted vendor will help you go through each stage of the entire process. They will work with you to clearly discover your needs and analyze all the requirements. Then,  the vendor can find qualified developers that best suits your demand. On top of that, their experience is extremely important since they can share with you their best practices and expertise.

CMC Global with 27+ years in the market, partnering with a wide range of customers from startups to large enterprises has our extensive knowledge to assist you in coming up with innovative solutions and quality technical consultation.

You have no idea on technical aspects

This problem could be the biggest pitfall for companies that outsource. They are unable to correctly evaluate the quality of the development process, make clear requirements in every stage of project development. So the necessary is to find a vendor that has the domain expertise and tech-savvy experts to help you eliminate bottlenecks while doing a new aspect that you are not really strong at.

You are unclear about your expectations

Once you found your trusted vendor, the next stage is to clearly discuss with your partner about possible delays, changes in requests, and timeline. To be transparent about your expectations, you need to clearly define all these possibles, then choosing the right collaboration models that support your goals. Finally, make sure to inform your partner of all of these expectations and input this content into the agreement between two parties.

You are unable to see the whole scope of the project

Another important factor is your understanding of how an outsourced project fits into your company’s objectives. Every project in your company has been directly affected by single outsourced aspects of the operation. To win the outsourcing, you have to explain all the details for the vendor you are considering to partner with, not one aspect but the whole scope of work and event other related project running in your company.

You don’t know the risks you might face off when doing outsource

There is no doubt that outsourcing helps many companies cutting their expenses and coming up with an outstanding solution to deal with their shortage of tech expertise and IT talents. However, working with a third party and having limited control over what you are doing might be very risky. Understanding that, apart from doing as your requests, CMC Global also plays the role of an experienced and trusted consultant who will provide you proper choices and planning from a global perspective to minimize the risks.

Culture, Time-zone and Language Differences

Cross-cultural problems might be the top concern of doing outsourcing. You always tend to look for a vendor that has few differences from your company and adapt to your requirements of cost-effective solutions. On top of that, you are looking for a company that meets your expectations in terms of communication, cultural, and business ethics aspects.

Moreover, working with a remote team lead to a problem of time-zone difference. It might cause obstacles in scheduling tasks and daily reviewing with developers. To tackle this issue, we have many secured tools that help such as Skype for Business or Microsoft Teams. 

You meet difficulties in dealing with legal issues

There are several problems of software outsourcing related to liability, data protection, confidentiality, and compliance, as well as intellectual property. Based on the collaboration model you select (project-based or dedicated team or any other), the terms in the agreement will vary. Each model has its legal terms and to avoid any legal common problems of software outsourcing issues, ensure to learn carefully about the subject.

Besides, legislation within the country is also a vital factor. Some IT outsourcing destinations strive to loosen the complicated regulations, creating favorable conditions that help tech companies to grow. Vietnam is among the top alluring destination for IT outsourcing, we recommend reading our e-book: 6-Step Guide to Winning Over Vietnam IT Market with an Offshore Development Center.

Your partner is not flexible

The world is changing faster every day. Years ago, companies could commit to a long-term partnership with a vendor without any changes in the contract. Now, other solutions are giving out to be more flexible for any type of business and cooperation.

First, we have different collaboration models and contracts for customers to pick up and choose the most suitable for their needs. Also, vendor selection is very important. A small company may struggle with business processes, while a certified midsize or large provider can adapt faster. Furthermore, companies with 10+ years of experience in the market can balance between processes and quality of the product to ensure customer satisfaction.

It’s hard to find the one that perfectly fits your needs

The key to success is to find a vendor that meets all criteria. However, there is no doubt that it’s difficult to find the right one that has the top-notch IT expertise you need, fits your budget, and agile delivery. The most important thing is to define your objectives in every stage, understand your scope of work, and create criteria for the project. 

If you have difficulty with the selection, check out our Ultimate guide to outsourcing software development in Vietnam. It covers the essential aspects of IT outsourcing and gives you insights for better selection.

Summary

The ICT market is tough and keeps changing day by day. This might leave us with two options: doing outsource or being out of the game. However, if you do not outsource wisely, you’re out of money and can not achieve your project. IT outsourcing becomes successful when you actively work to mitigate the risks and erase all these common problems of software outsourcing that you might face off.