3 Main Reasons Why Businesses Fail with Software Outsourcing by@igor.tkach
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3 Main Reasons Why Businesses Fail with Software Outsourcing

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The explosive growth of technology over the last decade has increased the need to deliver smart products through increasingly economical means. Therefore a growing number of buyers consider software outsourcing as an efficient way of embracing new technologies and ensuring their project does not run over the budget.

Still, negative reviews on remote cooperation and outsourcing have influenced the opinions of many executives and consolidated a number of misconceptions in their minds. They avoid setting up remote partnerships as they expect them to fail. This, in turn, leads to substantial cost spendings on local experts.

So is jumping on the outsourcing bandwagon a non-viable strategy? Or is it just one of the common misconceptions? Let’s find out.

Outsourcing works for minor and low-profile functions only

Some executives still hold to an opinion that outsourcing numerous functions is an ill-fated strategy which may lead to complete loss of control and business agility. Yet, the quality of software outsourcing services greatly depends on the specification of your provider.

In this respect, outsourcing vendors generally fall within three categories:

  • The first category comprises narrow-focus outsourcing companies which provide IT support and bug fixing services under a fixed price.
  • The second encompasses providers which perform minor software development tasks and don’t get fully involved in the development process.
  • The third category consists of premium IT outsourcing providers which engage top-level experts and act as business transformation and technology consulting partners for their clients.

In case you are looking for a vendor which may help you close different technological gaps and foster innovation on your project, then the first two categories might not work for you. Opt for third category providers which focus on delivering value.

Don’t hesitate to delegate important functions to your remote developers and allow them to act as your key innovation drivers on the project. Each member of your distributed team can bring a fresh vision to your project and help you generate effective solutions to common problems based on his diverse technological background.

Outsourcing will compromise your security and software quality


In the era of evolving cyber threats, information protection and software quality should lie at the core of every outsourcing agreement. Established software outsourcing providers are concerned about their market reputation and trustworthiness. That’s why they have well-thought-out security policies with documented obligations and procedures in place.

To ensure you get the desired quality and your assets are shielded from intruders, adopt the following practices:

  • Set the bar for quality and ensure your vendor follows the best coding practices and quality standards (coding conventions).
  • Describe your product roadmap, requirements, and end goals in great details.
  • Examine the security policies and ISO certifications of your potential outsourcing provider.
  • Find out whether your partner had any security-related incidents and how he managed to solve them.
  • Ensure that your outsourcing vendor has a developed incident response plan.
  • Delineate the security responsibilities of your software outsourcing provider in your service agreement.

Outsourcing makes you lose control over the process


Some buyers still believe that outsourcing can lead to complete loss of control due to lack of ongoing face-to-face communication. However, the level of control outsourcing offers greatly depends on the cooperation model you choose.

  • Project outsourcing

In project outsourcing model, the control levers are mostly concentrated in the hands of your software development partner. He takes control of everything from high-level processes down to assessing the quality of resources in the team.

The client usually gets involved in the process by reviewing software demos and providing feedback. However, the integration of internal processes and experts with distributed teams may be challenging to achieve under the project outsourcing model.

  • IT outstaffing

Whereas another popular cooperation model — IT outstaffing — implies active involvement from the client’s side. In this scenario, your technical provider acts as a facilitator while you have full control over the development process and team motivation.

This model enables you to make final decisions regarding the responsibilities and line-up of your team and have direct access to developer retention and motivation mechanisms. Thus you can easily integrate your business culture and build commitment to common goals among your dedicated developers.

Regardless of the model you chose, regular communication and exchange of feedback are fundamental. To facilitate efficient collaboration with your remote team, use separate tools for task tracking (e.g. Jira), continuous integration (Jenkins or TFS) and shared repositories (Gitlab, Github, Bitbucket or VSTS). These tools will help you track the team’s progress, reveal potential bottlenecks, and stay focused on continuous improvement.


Overall, before drawing any assumptions based on negative experiences, try to investigate the market and see the other side of the coin. Apparently, not all of the common beliefs regarding software outsourcing are true. Moreover, some of them are becoming obsolete as the IT outsourcing market continues to grow and develop dynamically day by day. While an increasing number of outsourcing providers are shifting their focus from simple execution to delivering real value to their clients.


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