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Custom Software Development

4 Pitfalls to Avoid when Outsourcing your Custom Software Development Project

The IT outsourcing industry is growing at a very fast pace. Outsourcing is not only for start-ups or non-tech companies, but big companies like GitHub, Slack, and WhatsApp have also benefited from outsourcing their custom software development projects in their early days to reach the current level of success. Outsourcing has the potential to improve the efficiency of your business, reduce the time to market your app and save high costs, but only if done correctly. There are also significant risks in outsourcing your software development project. This can have a negative impact on the bottom line of your business and cause projects to crash before you even get a chance to launch.

Create an Effective Outsourcing Strategy

Outsourcing custom software development projects has its advantages, but it can quickly become detrimental to business objectives if not managed appropriately. Let’s face it, finding a reliable custom software development company to partner can be a daunting task. This task becomes more complicated if the company does not have any prior experience in handling IT projects.

Common Issues in Project Outsourcing and How to Avoid Them?

We are an offshore IT services and custom software development company. Here’s our guide on what should be taken care of while choosing an outsourcing software development company.

1. Communication Barriers

The most significant advantage of outsourcing development, is the access to a global pool of talent, but one of the main difficulties is – communication problems. You will need to conquer different time zones, languages, and cultural traditions. Establishing regular routes of communication with the outsourcing team is crucial to ensure the success of the project.

Effective communication is the key, while English is just a language. When interacting with external developers, understanding the project’s requirements and clarity in delivery are the most critical factors.

The use of collaborative tools such as Jira and Asana, with a remote team via video or audio call, at regular intervals, is the best way to build a communication path.

2. Failing to Understand the Scope of the Project

Before outsourcing your custom software development project to a remote team, you need to clarify the requirements, setup a regular delivery schedule, and the project’s overall scope.

Failure to communicate such details may result in distortion of project scope. Without resolving these issues, software developers will continue to work in a silo and widen the gap between your expectations and the actual product.

The Software Requirements Specification (SRS) document can be an excellent tool that gives the development team a clear insight into the requirements. The clarity in the documentation is the first step in ensuring that your expectations and the outputs provided by the third-party company are consistent.

3. Non-Adherence to Code Quality Standards

Determining whether your external custom software development team adheres to quality standards is a challenge. Code quality is an ambiguous term because there is no strict definition of high quality and low-quality code. Code quality is a set of attributes that must be communicated with the outsourcing company.

A well-documented and well-tested code format with best practices for the programming language in which the application is written is necessary for long-term success and error-free implementation.

4. Ambiguity of Stakeholders

A major disadvantage of outsourcing is the lack of ownership of the project. If the custom software development company chooses a programmer on a contract rather than a full-time basis, ownership of the project becomes dicey. This disturbance in the project development process can lead to inconsistencies in output, as no project leader or team will not take the initiative to finish the project on time.

When outsourcing software development, make sure you understand who will be working on it and ensure that at least some project managers are consistent throughout the process. These are the people you can hold accountable and stay connected through email threads, video calls, and other communication channels.

Custom Software Development

5. Ambiguity in Contract Signing

At the start of the project, it is not possible to hand over the budget to an outsourcing custom software services provider, especially for start-ups. Also, it doesn’t sound like a good option legally. Such contracts full of loopholes may result in a substantial financial loss.

There is an old saying – “Get it in Writing” is true in the case of software development as well.

The contract, which has been prepared perfectly in all terms, acts as a roadmap for software development outsourcing companies and will save you from losses in case things go wrong.

Best Practices when Outsourcing the Project

Drafting a tight contract-free from any legal errors helps ensure that no significant issues are missed during app development. Have a look at the things that you should keep in mind when drafting an agreement with an outsourcing agency:

Define Deliverables and Timeframes:

The contract must clearly define the expected output in the form of bullet points and approximate timelines by which the company will complete the work. A custom software development company that adheres to agile development practices can help provide an accurate picture of development progress.

Custom Software Development

Feature-based Contracts over Time-based Contracts:

Instead of time-based development and deployment-defined agreements, prefer feature-based agreements where developers are encouraged to stick to the timeline is the best option. It helps ensure ownership and responsibility for the company you are outsourcing.

Instalment Based Payment:

This payment structure facilitates the division of the project into different phases and sets the payment schedule as these stages are achieved—plan regular follow-up in the process and schedule meetings with the team. Instalment based payment system brings a lot of clarity to the agreement and makes it easier to resolve any disputes later.

Code Collateral:

Accepting apps without code collateral should be avoided. The code you receive at the end must be free of any malware and specify an acceptance test period. 5 to 10 days is a reasonable period during which you need to rectify some errors in the application at the development company expense. The agreement should also specify how the web hosting or app store submissions will be managed.

Maintenance Support:

An outsourcing company may stop work in the middle of a project without any support contract. The maintenance assistance agreement should clearly state how long the team will support the programs they create and deliver. Specifying support terms in the project increases the sense of ownership for developers working on building your app. They know that the wrong code means more work for them in the future.

Intellectual Property Rights:

As a customer, you have full rights to your project but make sure you get it in writing by including the intellectual property rights clause in the contract. This will save you some major headaches in the event of a rights violation. When working with your potential competitor in the future, this will prevent the outsourcing company from reusing the code written for your application.

Privacy Agreement:

The Privacy Agreement is a non-disclosure clause that guarantees the confidentiality of the proprietary information we share with contractors. This ensures that app ideas cannot be copied or shared with others. The non-disclosure and privacy agreement must be signed with the outsourcing agency and the individual developers.

Compensation Clause:

Compensation clauses are legal provisions in the agreement that relate to the distribution of risk liability between you and the outsourcing agency. It states who will bear the legal charges and if any claim arises in the application development process.

Termination Clause:

It’s always a good idea to be prepared for the worst. Be sure to include an end clause in your agreement that clearly states that action will be taken if the custom software development company fails to complete the project as per requirements.

Jurisdiction to Solve Problem:

Outsourcing has made software development a genuinely global process. Specifying the jurisdiction in which any dispute will be settled will help understand the law under which a project is covered.


We would not say that the above-listed threats are the most common. Also, there are no rules for this – as it all depends on the project’s features. However, if you are challenged to implement your project successfully, consider what we have written here. Considering the issues mentioned here is a perfect guide for you, which suggests what you should not do and how to deal with the threat. If you are still left with any queries regarding custom software development services, feel free to connect with us, and we’ll be happy to answer your questions.

Please send us an email at, and someone from our team will connect with you within 1-2 business days.

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