In 2024, investing in digital transformation and having the right software is essential for any organization wishing to remain competitive and successful. While some companies are happy with out-of-the-box SaaS solutions, others see the added value in 100% customized software, offering efficiency gains and increased personalization.
When choosing to outsource custom software development, it's crucial to know how to avoid the most costly mistakes.
Why outsourcing is a good idea
With a global market of US$541 billion generated by IT outsourcing (Statista), it has become commonplace for companies to delegate custom software development to external providers. This approach is generally excellent, especially for companies that do not specialize in technology or software engineering. Here are some key benefits of outsourcing:
Access to specialized expertise: Specialized software development firms possess best practices, follow industry trends and invest in targeted ongoing training.
Human resources management: Today, software development requires a diversified team including specialists in backend, frontend, architecture, devops and more. Recruiting, training and maintaining this talent in-house can be costly and complex. Unlike the 80s, when a single developer could master virtually all technical aspects, it is now crucial to have several experts specialized in distinct fields to ensure optimal development.
Focus on core business: Outsourcing allows your internal resources to concentrate on their core competencies and strategic objectives, unless you are a technology company whose core business is software development.
Sources of failure and problems
According to the Standish Group's annual CHAOS 2020 report, 66% of technology projects fail partially or completely (based on 50,000 projects analyzed worldwide). Here are some common reasons why software development projects can fail:
Inadequate understanding of requirements: Uncertainty about the precise needs of the project, whether in terms of modules, integrations or long-term vision, greatly increases the risk of failure and cost overruns.
Questionable technological choices: With dozens of programming languages and hundreds of frameworks available, it's easy to succumb to shiny object syndrome by adopting a promising but immature technology, or choosing an inappropriate tool that slows down development.
Poor technical skills: Even the best tools won't deliver results if they're in the hands of insufficiently skilled developers. A lack of technical skills can not only significantly increase development times (and costs), but also result in a fragile architecture that accumulates technical debt debt.
Questionable work estimates: Inaccurate estimates, often due to insufficient analysis of requirements, can lead to budget overruns and delays. In addition, rough estimates, lacking granularity in their presentation, diminish the ability to identify sources of cost overruns.
Lack of structure on contact points and communication: A software project already involves enough uncertainties without adding an unclear organizational structure. Different people may interpret the same requirement text or the importance of a feature differently. Without a clear procedure for updates, requirement changes and user testing, costs are likely to skyrocket, while the original vision remains unfulfilled.
How to avoid the most costly mistakes
With the right knowledge in hand, it's entirely possible to avoid the costly mistakes associated with outsourcing a custom software project. This starts with in-house preparatory work, followed by a rigorous analysis of the company you're planning to outsource the project to. Here's a checklist summarizing the elements to be analyzed:
- Do I have meticulous specifications?
- Have I spoken to all the key internal people involved in the project?
- Has a technical analysis been carried out?
- What are the ramifications of the proposed architecture?
- What are the certifications, methodology and experience of the external team?
- What security measures are used?
- How detailed is the estimate?
- Who will be the internal and external points of contact?
In short, outsourcing custom software development to a specialized firm can be an excellent strategy for obtaining a robust solution, speeding up the project and keeping costs under control. However, it's essential to do your homework upstream and ensure that no critical aspects have been overlooked before embarking on such a project.
