The Challenges of Outsourcing Software Development and How to Overcome Them

Blog / The Challenges of Outsourcing Software Development and How to Overcome Them

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    Nils Widal
    Nils WidalMarch 25, 2022

    Digital Health and Cloud Platforms Advocate and Entrepreneur.

    Outsourcing development projects is a relatively common practice. The staffing approach takes advantage of a reduced labour cost, and the ability to increase teams to suit a project. 

    However, outsourcing has become more than just a staffing approach, it’s now a necessity for some development companies. The IT industry is facing a skills shortage. The combination of the Great Resignation, and an overall lack of staff in the IT market, has meant that many projects have had to find other ways to expand. 

    By outsourcing your IT projects, you can grow or shrink teams depending on your requirements at that time. This provides increased flexibility. Also, depending on the location of your teams, labor can be cheaper. 

    Offshore outsourced teams work on your project outside of your hours. In theory, with a good partnership, you can complete more hours of work within a day. This is referred to as the ‘follow the sun’ approach. 

    So, there are plenty of benefits to outsourcing, beyond simply increasing staff numbers. However, there are challenges to overcome to get the best results from outsourcing software development.


    One of the most important initial steps to outsourcing software development is contracts, and contract negotiations. Unfortunately, issues at this stage can cause problems both at the beginning, and throughout the project. 

    Unclear contracts often cause confusion over what belongs to who, and what the expectations are for the project. As a result, outsourced companies can find loopholes, and make claims to development work or refuse to deliver elements of the project. This can result in missed deadlines, and a faulty solution. In digital health, there is no margin for error. 

    Ensure that any contracts are clear, and set out project specifics, business needs and expectations. No detail is too small. It’s better to be thorough, than get into arguments further down the line. If everyone knows their roles and responsibilities, then teams can trust each other. 

    It’s also important to consider your expectations beyond the contract length. What is your optimal project plan? For instance, who is going to be responsible for the maintenance of the solution? Or, dealing with potential bugs? Your contracts need to consider the long term, not just the completed project. 

    outsourcing software development


    Needless to say, communication is critical to any team project, regardless of industry. However, outsourcing in the IT sector often presents challenges with communication. 

    Depending on your outsourcing models, your teams may rely on effective communication. For instance, offshore teams will operate in opposite time zones to your own. This means that there is no one available from the collaborative team to answer queries, or address concerns. 

    Offshore teams are also far more likely to speak a different language to your in-house team. This presents communication challenges throughout the development process. Regardless of whether you’re outsourcing the entire project, or augmenting your existing teams, outsourced teams will need to touch base with someone at your company. 

    Consider the right software outsourcing services for your project. For instance, offshore outsourcing may be more cost-effective in the short term. However, communication issues can lead to mistakes and errors. In the long term, you may spend more time trying to communicate, and fix problems as a result of misunderstandings. 

    Onshore or nearshore outsourcing can address communication issues. They are located closer to home, and are more likely to speak the same language, or overlap timezones with your own teams. 

    If offshore outsourcing seems right for your project then try to ensure that there are employees that speak your language, as a liaison between teams.

    Project Management and Quality Assurance 

    Strategic management of your development project is key to success. Project managers help to keep the project moving, manage any issues, and drive to meet deadlines. 

    Similarly, quality assurance is extremely important, especially in digital health. QA teams are a necessity to avoid mistakes, and ensure the best end result. 

    Both of these roles contribute to the best possible outcome for your project. However, they are fairly hands-on positions. Project managers need to maintain a presence throughout their area of the project, and quality assurance teams need to monitor the build process. 

    This can be particularly challenging when your project is being built elsewhere. Consider the location of your outsourced teams, and how much control you can have over the end product. Offshore and nearshore outsourcing involves a considerable distance between your company, and your project. This makes project management and quality assurance difficult. 

    Consider whether you can outsource your project with software developers nearby. If not, assess your outsourcing partners’ teams, and enquire about their QA and management processes. 

    It’s critical to communicate your expectations, goals and objectives to your development partner. You may be able to send your own teams to monitor the project on occasion, but you need to trust in their internal processes and their ability to deliver to a high standard.

    Deadlines and Delays

    Deadlines are critical for all development projects. Meeting delivery deadlines can make or break your solution. However, delays are an almost inevitable part of the build process, too. 

    It’s important to know how to approach delays and deadline problems, and protect your business where possible. 

    Firstly, ensure that your deadlines and milestones are communicated clearly. You might even want to include these in your contract discussions. Ultimately, many outsourcing companies are likely to agree that they can meet deadlines, but confirm that you’re happy with staff numbers and capabilities. 

    You might want to consider putting a clause around deadlines in your partnership agreement. Incentives drive teams to meet deadlines, whether positive or negative. Ultimately, you and your project partner need to be on the same page about deadlines and expectations.

    outsourcing software development

    Capability and Experience

    Many companies offer outsourcing for development projects. That doesn’t mean they have the experience and skills to deliver for the digital health industry. Outsourcing might seem like the best way to scale your internal IT team for a new project, but the wrong development partners could ultimately slow you down.

    In digital health, compliance is critical. Any potential partner needs to have experience in the industry, and understand common mistakes and pitfalls.

    Find a partner with the right expertise and talent for digital health development. Ask to see a portfolio, and potentially speak to previous customers. If not, they should have some testimonials that they can share with you. You need to know that they understand your project. 

    In digital health, mistakes and non-compliance can have serious consequences. It’s important to ensure that both you and your partner understand the risks in digital health, and how to manage them.


    Outsourcing software development is about more than just securing quick and cheap work. Creating a real partnership with an outsourced team can help to avoid many of the common challenges associated with outsourcing.

    Your relationship should be mutually beneficial, rather than just transactional. If both parties benefit from the project, then both are motivated to drive the project forward. Clear communication, aligned goals and mutual enthusiasm are key elements to a cohesive partnership.

    At Vertrical, we understand that outsourcing software development brings challenges. We have teams of compliance experts and skilled software engineers, located around the globe, ready to get started on your projects. Our ‘follow the sun’ approach ensures clear communication and aligned teams. Get in touch with us today to discuss your digital health solutions.



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