Critical Issues Of Offshore Software Development Project Failures

With the increased interconnectedness and globalization in the world today, there has been a rapid growth of IT offshoring globally. The latest development has opened a huge market for IT services across the globe. Consequently, IT offshoring in developed countries has been increasing steadily for the last few years. According to a study in 2007 by Forester, 65% of the European and US organizations had over 1,000 employees in offshore countries working on their offshore software development project. The survey predicted that IT offshore outsourcing’s growth would continue in the next 5 years and would mainly focus on maintenance and application development.

However, offshore software development’s prime motivation is the reduction of IT costs, which has led to critical issues of offshore software development project failures. The motivation has promoted a cheaper-is-better attitude that has cost organizations billions of dollars in losses due to offshore software development failures. Moreover, offshoring has led to more failures than success when assessed in terms of meeting the requirements, budget, and estimated time.

Offshore software development projects are more vulnerable to failure as compared to domestically outsourced projects due to a number of underlying risks. Some of these underlying factors include geographical distances, cultural differences, knowledge transfer complexities, coordination challenges, and communication. Here we discuss some of the critical issues that are specific to offshore software development project failures.

Communication Risks

One of the critical issues that may lead to offshore software development project failure is communication problems. Remember, offshoring relies on far contractors, which might lead to communication shutdown and project failures in the long run. Communication risks may arise from man-made errors, internet disruption, natural disasters, or poor signal. Besides, poor communication may also be brought about by a lack of transparency among developers, customers, and vendors, difficulties in communication between onshore and offshore members, and poor offshore team management.

Consequently, there must be constant and real-time communication of all the partners involved through BPM software and project management tools to help mitigate the issues. You should also ensure that there is a power backup to prevent communication failure in case of natural disasters and power outages. Additionally, you should invest in training all the members in leadership and communication tools.

Lack of clear rules and standards

In most cases, offshore software development teams work on a project without clear rules and standards to guide them on achieving results leading to project failures. The company should clearly set up the rules and standards that outline the members’ expectations or team. Besides, both the software outsourcing company and the client should understand the company’s agile process, culture, and policy for a smooth and successful outsourced process.

Lack of constant oversight

Offshore software development requires constant oversight to ensure great results, and all the requirements are met, and the project is completed on time. For effective outsourcing, you need to get a reliable project manager. The project manager adopts a seamless way to keep track of the project by looking for a company that uses Agile methodology, making realistic deadlines, maintaining constant communication, and rectifying errors. 

Duality of deliverables

In some cases, companies choose the wrong to outsource partners that deliver a substandard product that does not meet the set standards and the requirements. This critical issue may arise when your partner misses deadlines repeatedly and misappropriated responsibilities. To solve this issue, you should ensure that your business model and that of your outsourcing partner align with each other. Moreover, you should also choose the best outsourcing partner, make a realistic deadline and clarify the responsibilities and the goals of every project.

The duality of working time

Usually, the leading offshore software development destinations are in countries with low living costs, while the multinational companies that seek offshore engineers’ services are based in developed countries like the US and Western Europe. Consequently, offshore and your onshore teams are less likely to work at the same time due to the difference in time zones. You might find bugs in coding in some cases and fail to get an immediate response from correcting the issue. Such cases may affect the offshore software development project and also lead to failures. It is advisable to use project management tools like Asana, Slack to implement clear deadlines and schedule weekly meetings to ensure that your time zones are compatible.

Non-realistic deadlines

It is important to provide an adequate time frame to allow the offshore software engineers to work on the entire process. Therefore, you should assign time to specific projects depending on their complexity since more complex projects require more time to complete. Break your project into manageable chunks to be able to set realistic deadlines, involve all the members and the team and regularly check while in progress. Moreover, you can also use time management tools like the Pareto principle or project manager to mitigate this issue. It is also important to set extra time to handle or correct mistakes in case there is an emergency.

Quality control

As mentioned above, you should give clear standards and rules and maintain constant communication with the team to fix issues that may arise. This ensures that all the team of developers is able to work together while meeting all the requirements

Confidentiality and security

Outsourcing software development forces you to depend on the telephone or internet to contact your outsourcing team, which increases the risk of a confidentiality data breach or hacking heavily. Consequently, it is advisable to acquire the encrypted and the right communication tools to reduce these risks. You should ensure that you only partner with an outsourcing company with a good track record, customer views, and trustworthiness.

High attrition rate

Unlike when outsourcing domestically, losing one member from your offshore software development team greatly affects the operations of the company since you hire a limited number of offshore engineers at a time, depending on the project. To mitigate this critical issue, you should ensure that you pay your offshore engineers on time and ensure that they have good terms of service that allow for adequate time and sleep.


Increased globalization has led to the dispersion of IT activities across the globe leading to rapid growth in offshore outsourcing. Offshore software development helps companies in countries with high living costs to reduce software development costs. However, despite the cost advantages, offshoring projects may face critical issues that may lead to project failures. These issues can be mitigated by putting certain measures in place and also adopting the right tools to manage and run your project.

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