How many outsourcing projects fail

This way, we collected a few failed cases. The project turned out to be challenging and lasted for more than 2 months. It cost the client more than expected. What we learned: for complex projects and long-term collaborations, choosing a dedicated model is more cost-effective. Another prominent example is the development of one cyber app. We started without proper technical instruction, the client chose a fixed price contract.

The real amount of work turned out to be bigger and almost for half a year we did charity work. Our team started the development of the product for NewProImage without reconciling the global vision. Understanding what can go wrong before you dive into outsourcing can save you time, money, and nerves. Here is our checklist on how to protect yourself from wrong decisions in IT outsourcing.

Disclaimer: as much as possible. It usually takes a lot of time and resources from an idea to the final version of the project. One of the sure ways not to waste priceless time and money is to build an MVP and test it. MVP with the basic features will still demonstrate the value of your product. Feedback, in turn, will give an understanding of what has to be re-made, adjusted, improved. With it, you can release an MVP product in 90 days.

We highly recommend starting the development of the new product in a form of MVP to protect yourself from time and financial losses. The right choice of vendor is another thing that will save you time and money. With the right team, you will minimize constant fine-tunings and amendments. What can help you to find the best buddy is obviously thorough research and comparison of teams. We created a vendor checklist that will help you to understand where to swipe — left or right.

Another thing that we recommend is dividing the project into several milestones and assigning the first milestone to several teams to find the perfect match. Yes, it can be more costly now but it will save you time and money in the long run. Not to mention that they are absolute newbies in the project. Explain every feature of the app, its peculiarities, functions, and importance. What problems do they solve? Send the summary to the outsourced team. We realized the importance of proper communication with the client and now start every new project with a Discovery phase.

Its main deliverables are:. The chances that an outsourced team will be from a very different place and culture are high. This affects the working process — from approach to work to logistics. The relations between the boss and the hired staff in different cultures differ. For example, there is a different attitude to constructive criticism in Ukraine and China. Another important thing is logistics. The time difference can create time lags and inconvenience for both teams.

For example, if you are based in Europe, why not outsource specialists from Ukraine? Of course, outsourcing has its merits. It can lower your development costs and you can access more varieties of skills.

You can choose between software agencies or freelancers in different countries. But the downside is less control over freelancers, which needs its proper considerations. I think ambitious project estimates lead to all the other complications. I can relate to these comments Ladan, very factual and to the point! However, I see hope with more competency driven by the trent to remote teams. I believe that with all the hype about the benefits of outsourcing the main problem lies in customer experience with agile methods and their expectations.

Competent agilists can deal with these challenges, the difficulty is to find them! Competent agilists can in fact do that. While your competition may struggle to survive the current financial crisis, your development will continue uninterrupted. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Software development outsourcing is on the rise. Why do they fail?

And most importantly, how can you avoid possible complications? Clients cannot create a balance between their software development costs and the minimum scope of business at the same time.

Clients cannot conjecture the best technology to use for their software development. Considering their business plan and its development in the future, clients need to determine the technical basis of their product besides the best technology at the beginning of the outsourcing process.

But they tend to fail in doing so. Clients fail to estimate the costs and the timeline of each feature in the process of outsourcing their software development.

Ambitious project estimates Some outsourcing companies set unrealistic deadlines and estimations for software projects when bidding for a project and writing a proposal to win the clients over. Improper planning Clients assume that by signing a contract with outsourcing companies, they hand their project off to them entirely.

In some cases, where trust is also a matter of law, you can of course ask outsourcing companies about signing the non-disclosure agreement. Bad communication, no big-picture perspective and zero trust for an outsourced development company can result from not having a consistent plan.

In order to create one, you need to know what your business needs, what your customers want and how you want to achieve it. The software outsourcing company should help you in designing a detailed plan that includes time and deadlines, step-by-step process, priorities, standards, requirements, software development team composition, software architecture, communication channels, etc.

To effectively and consistently design such a software development plan, most software outsourcing companies use Agile methodology. Any unreliable outsourcing company will agree on impossible deadlines in a limited budget. Then they win the bidding work and start working on the software. These are only phantom savings that will haunt you in the long run. Usability includes such requirements like functionality, reliability, security, performance, scalability, and no errors.

They all need to be taken care of at the very early stages of the project because the cost of changes in subsequent stages increases very quickly. We told you that it was going to haunt you.

Make sure that the companies you consider have the Quality Assurance team with appropriate processes on board. Otherwise, you might end up with code that no other software developer can understand and work on.

Which means salting the earth behind you and starting all over again. Ergo: bye-bye cost savings! The list of issues is far from over. It also often depends on specific scenarios in software development outsourcing.

We could also include challenges like different time zones, language barriers, cultural differences, etc. If you have a clear vision of what success means to you, your app and your business, the reliable outsourcing companies will get you there.

We and our customers — just check out the reviews love to think that we are a dependable outsourcing company, so if you need any third party help with web development services — give us a shout. They are more than just a software company. They are the partner who will help you achieve what you want to achieve. We'll be back to you shortly to discuss your needs in more detail. Back to all blogposts 11 December Why does software development outsourcing fail 1 in 4 times?

The answers may surprise you. Back to all blogposts. Contents: 1. Intro 2.