Scared that outsourcing software development projects will fail you? Busting myths and dispelling the doubts

The state of globally outsourcing software development 

According to Techanvio research, the outsourcing market size will grow by $98 billion during 2020-2024.

Another study by the National Outsourcing Association states that over 70% of companies plan to increase their use of outsourcing, with 35% of businesses planning to do so significantly. In the same report, NOA asked the respondents for primary reasons why they decided on software project outsourcing. The top answers were:

• 35% – cost saving,
• 23% – improving the user experience,
• 17% – transitioning from legacy solutions to “as-a-service” models.

That’s for the good news. Realistically and statistically speaking, it’s impossible that all outsourced software development projects have a happy ending. Back in 2000, Dun & Bradstreet released “Barometer of Global Outsourcing” which reported 20 – 25% of all outsourcing relationships would fail within two years.

20+ years later those numbers are probably lower due to widespread outsourcing services and more information online. However, it doesn’t change the fact that some companies are still terrified to outsource software development and the prospect of trusting their precious apps to some strangers from a third party software development company.

Why do companies decide to outsource software development projects?

Whether it’s access to an otherwise unavailable software development team with specific tech skills, speeding up the software development process and time to market, delivering high-quality software from scratch or acquiring a permanent business/outsourcing partner – outsourcing software projects can help plenty.

In this article, we aren’t focusing on the advantages of software outsourcing. 

Why do companies hesitate to outsource software projects?

I needed some experts on the subject, so I talked to:

Marek Gajda (CTO of The Software House)

Gerbert Oude Velthuis (CTO of Travelia and General Manager for TSH NL)

Every day they talk to organizations from around the globe and dispel their doubts about software product development and outsourcing services. I was curious about what real-life concerns and threats they associate with outsourcing.

Some fears are old misconceptions debunked by the software development community ages ago. Some are legit reasons that can’t just be shrugged off. Let’s see what the main reasons for this outsourcing phobia are.

1. The outsourcing software development company will promise something, then they don’t deliver

Marek Gajda: At the sales stage, software development outsourcing companies often put the most senior and impressive people upfront. You fall in love with them, and then when it is time to work, the software development team changes completely. You got people with less experience and knowledge, and nobody cares. You’re left with no support from the software company and you have to deal with developers on your own. Eventually, the team becomes unreliable – it doesn’t deliver what it has committed to on time or in good quality and no one wants to take responsibility for project failure. All you hear is excuses.

This situation can be easily prevented by demanding to meet your development team beforehand, and getting assurance that the same people are going to work with your project.

Of course, random situations like illness can occur, and some team members will have to be swapped but you can always ask for the qualifications of replacement software developers. I’ve already described this topic in more detail in the article below. Even if you’re not a technical person, there are ways to do some background checks on the company you’re about to hire.

2. The language barrier will kill my software development project

Gerbert Oude Velthuis: Let’s be real – English is the tech language. If a software development company wants to be recognized on the international level, its development teams must speak English on a proficient level.

It’s true that sometimes it can be a bit difficult to understand each other if English is not your native language.

In general, software developers are very used to English (most of the programming languages, tools and frameworks are in English).

Picking a company that has proactive language training programs helps. You can always ask about that during the first business call. It’s also worth talking to the software developers about ordinary things. You’ll kill two birds with one stone – check their language skills and see if you “click” as a team. If you want to be sure about the general language skills in the country you’re about to outsource to, you can check the EF English Proficiency Index.

3. The software outsourcing company will be far away and that will make communication impossible

Marek Gajda:

Some outsourcing companies treat their clients like a fragile egg – always leaning towards customer’s ideas because “the customer is never wrong”.

That attitude introduces distance and makes the software team reluctant to talk about problems in the project (if anybody tells you there won’t be any troubles, they probably don’t know what they are talking about), and the word “no” disappears from their vocabulary even if the customer is obviously in the wrong.

Ironically, this is a communication problem that isn’t particular to outsourcing software development projects, but when you work face-to-face with local companies as well. Most valuable communication occurs not when you’re close, but when you realize that you have the same goals and good communication and feedback become a part of your overall development process. This can work just as well if not better when you outsource. The distance sometimes does make the heart grow fonder, but there are some cases that have given outsourcing a bad rap.

I’ve personally heard about an extreme example where the software outsourcing firm just stopped talking to the client altogether. There was a massive (yet fixable) fail in the project but the development team went silent, didn’t answer the phone, and simply abandoned the project. The client was left with a half-baked app and no possibility to go to the world’s end to ask what happened. It’s hard not to be prejudiced against outsourcing software projects after something like that. It’s extreme cases like this that can sometimes cause software development outsourcing to have a not-so-safe reputation. The sad fact is, anyone can ghost you. 

Appropriate communication is the key, especially when outsourcing software development and not being able to meet face to face. But increasingly so, even if you hire a local software development company, you’re still going to meet on Zoom – it’s the new way of things.

You can read more about remote management in software outsourcing here. Also, make sure to check with your chosen company if they have their communication processes in order and what tools they use. Professional project management tools help with perfect communication with your outsourcing company. see from the very beginning if you’re dealing with pros who’ve done that hundred times before or “spontaneous” amateurs with no plan in place.

4. I’ll have no time to control remote application development

Gerbert Oude Velthuis: Two things I always hear in this case are: “when a dedicated team is in the office full-time, changes are done quickly and easily” and “project management with a remote software development company or team takes up more time than local application development”.

I agree that sometimes it’s good to have flexibility guaranteed by a shared office. But too much flexibility can actually negatively influences efficiency and progress as well as the development process.

It’s good procedures that are important. If your in-house processes aren’t worked out properly, it won’t be easier, nor quicker to control somebody that sits next to you. With the right processes and communication channels (like daily calls and Slack updates) you won’t notice the difference.

The current pandemic situation cannot be ignored here either.

With software developers working from home these days there’s no difference in management between your “local” team and a remote team.

The difference is that software development companies that outsource their services had all procedures in place even before Covid-19 hit. Organizations that relied on in-house work had to develop a new way of working at record speed (sometimes with questionable effects).

The predictions say that it will partially stay this way even after the pandemic. So eventually every business will have to adjust to these changes.

5. To outsource software project is so expensive that I’ll need to rob a bank

Marek Gajda: almost in every case of a reluctant customer, I get asked about the money. And rightfully so – nobody wants their business to go bankrupt because they decided to outsource software development.

If you had a bad experience with custom software development I’ll bet it went something like this – the software outsourcing company was very “optimistic” when estimating the project at the sales stage. Then it started development and made you more and more dependent on itself. When you realized that the project is too far gone to withdraw, the estimates magically increase, the project scope grows, and the new budget puts you against the wall. No other way but to pay up.

There are many, many ways in Agile methodology to control the real-time that developers spend on the project, and regularly check if they are really using their working time effectively. In The Software House, we call it regular updates with the customer and transparent tasks in Jira.

Remember that choosing software development companies that propose the lowest rates for your software outsourcing projects, won’t always save you money in the end. More experienced companies simply present more reliable estimates and transparent value for money when it comes to pricing project development costs.

They will know project requirements and have the technical expertise to give you a reliable estimate based on their past work on successful outsourcing projects. Cut your risk by choosing companies with significant coding expertise but also with project management experience and an established quality assurance process – better yet, get a company that has reviews that rave about all of these things.

6. If it’s not from my country, it can’t be good

Gerbert Oude Velthuis:  Research shows that countries like China, Russia, and Poland have the best developers and top software solutions in the world. This has its roots in the education system that puts a lot of emphasis on Maths and foreign languages – that is eventually very important for developers.

The bottom line is – sometimes you just need to trust people.

You’ve talked to the company and their developers, checked credentials, case studies, the Clutch profile, testimonials and everything looks good. With trust comes the control you need.

Should you put your software projects for outsourcing?

You’re not alone in your doubts about outsourcing custom software development.  Below you’ll find the video from our very first CTO Roundtable with Dimitrios Psarrou (CTO at Endouble), Sietse van der Laan (Tech Team Manager at Tiqets) and Matthijs Ooms (CTO at Splitser). Their businesses experienced the same problems you’re probably facing right now.

Outsourcing your software development services has its pros and cons but don’t let your past bad experiences and unjustified fears prevent you from digital transformation, improving your software or simply growing your entire business. Software outsourcing can help, you just need to find the right fit. Researching specific scenarios for software development outsourcing may be of great help in doing that.

We’re not gonna lie – not every customer that knocks on our doors starts a project with us. Sometimes is not the right fit when the tech stack is concerned or when it comes to their software development needs. Sometimes it is a different vision of quality software – as we continue to grow, we raise the bar on the software outsourcing services we provide. Sometimes we just don’t get along as people. And it’s all okay – they probably successfully put their software development projects for outsourcing elsewhere and we made some other businesses happy.