The Top 10 Common Outsourcing Problems and How to Resolve Them

Linh Nguyen

Linh Nguyen | 02/04/2021

The Top 10 Common Outsourcing Problems and How to Resolve Them

Software Outsourcing is expanding rapidly as businesses realize the importance of having an external workforce that can give them an extra edge in competition, especially as technology is advancing at an amazing speed.

Software Outsourcing is expanding rapidly as businesses realize the importance of having an external workforce that can give them an extra edge in competition, especially as technology is advancing at an amazing speed. Instead of training their team and spending resources for recruiting and retaining employees, companies now turn to third-party vendors to fulfill their software needs and requirements.

However, every solution has problems of its own. Of course, having an external team working on your products may bring in many risks including security, cultural misfits, time management, etc. Let’s talk about the top 10 common outsourcing problems and the solutions to minimize these problems as you decide to outsource your software.

Outsourcing Problems and Solutions

Problem #1: Goal and Expectation Mismatch

Goal and Expectation Mismatch

Imagine walking through everything and expecting your vendor to be on the same boat, just to realize the next day that we were thinking of two totally different things. “No, I want a product that works well with this platform, not especially for this platform.” “We are sorry, that will take a few days to fix.” You don’t want situations like this to happen, right?

Depending on the contract, miscommunications and requirements can cost you more, both resources and time, and sometimes, delay your expected delivery date. This is frightening for businesses that rely heavily on being the earliest player in the field. But how do we avoid this?

Just be very clear and transparent about what you want, need, and expect from your third-party vendor. Sounds easy right? Actually, not so much. Sometimes, you tend to leave out certain things that are “common sense” to you, which means, “should not even be talked about because there is no other way to do it” - which doesn’t mean the same for the other party. Have you ever written a piece of story that flows perfectly in your eyes but your readers get confused while reading it? This is exactly the same thing.

So stick to making every requirement obvious, double checking - no - triple checking with your team to make sure everything is easy to understand and nothing is left out, and go through your plan and expectations at least weekly with your vendor to make sure everything works out in the end.

Problem #2: Time Zone Differences

Time Zone Differences

If you are outsourcing your software offshore, it is understandable that your time zones will be different and sometimes you cannot reach your partner in time. Not all offshore companies offer 24/7 customer services. What if you have a game breaking bug that you find out 3 hours after their office hours, and the pilot is the next day? Who should you turn to ask for help?

This is why you should never leave everything last minute. Always ask your partner for emergency contacts and if there is any way to fix issues after hours. Even though most (hopefully all) vendors do not work 24/7 to support all your errors, they can make ways to solve it in the shortest amount of time for emergencies.

Ofcourse, working with a vendor that is closer to your timezone is ideal, but not everything is perfect. Maybe your best suited vendor is across the map, where you only have a few hours of clashing. Then it is time to optimize those precious hours. There are a few things that you can do to improve work efficiency while working in different time zones:

  • Have a clear time zone visual: Figure out your working hours and how much they clash with your vendor, or vendors if you are working with multiple partners. Keep this information as a reminder for all your processes.
  • Visit your partner once at least every other month: This is to understand more about the culture of your partner’s workplace and whether they are more active in the morning, afternoon, or at night. Also it’s always helpful to learn about your partner’s working culture.
  • Daily communication: Set up a good time for daily meetings. It does not have to be long. Your vendor should at least try to work around the clock to meet your requirements and you should as well.

Problem #3: Having No Control Over Vendor’s Staff

Having No Control Over Vendor’s Staff

Most of the time, the recruitment process is done through your vendor. This means, you might have minimum say in who to recruit and why. You are leaving your important workload in the hands of people that you barely know. Are they really qualified? How can I check the quality of the work? What if the staff quality is unknown? What if they change staff or key people?

Yes, outsourcing does take off a heavy load off your back, but that doesn’t mean it does not affect you anymore. Heck, it probably affects you more now that you have to trust other people to deal with issues you could barely deal with. Your vendor also does not suffer the same risks you have, so how can you know that they are diligent with their recruitment process?

You can always attend the hiring process if you feel like it is absolutely needed. Also, be sure to choose a client with a history of successful projects - better if they are big projects from well-recognized companies. This means that their talent force is capable of handling large and complex projects.

Also look into what their expertise is as no company is perfect at every aspect of technology. Maybe they are known for IoT (Internet of Things), and you are going for a mobile app project? They might not be the best fit for you.

Problem #4: Outsourcing Your Weaknesses

Outsourcing Your Weaknesses

Okay, this is a bit contradicting as you would want to outsource a department that you are lacking, meaning, it might be your weakness. However, this brings in a lot of risks as you cannot do proper quality control as how do you tell if they did a good job or not?

Behind an app is thousands of lines of codes - and if you do not understand them even on a surface level, or don’t have the people to cross check, how do you know the results are satisfying and there won’t be problems in the future? If you are outsourcing an Angular mobile app, but you have no expert to proof-check the final product, you might end up with a lot of bugs in the long run, or getting a low-quality software that might seem okay initially. Yes you probably can ask your partner to improve the product, but it wastes time on both sides, and makes you lose a lot of trust in between.

This means, you should always have at least someone who is good at their job on your side. If you have a long-term outsourcing partner, this should not be a problem as trust comes with continuous quality. But if you are dealing with a new partner, it is recommended to always have an expert on your side, or a third party who can proof-check the product.

Problem #5: Intellectual Property And Data Security

Intellectual Property And Data Security

If you know the term “trade secrets”, you know how important intellectual property and data security are. In a world where, some might say, “the winner takes all”, your trade secrets are your biggest weapon to success. Outsourcing means sharing this info to a third-party company, but how do you make sure that you have total control and security over all your data and IP?

The first step of every outsourcing project should be signing the NDA (Non-Disclosure Agreement). In this NDA, you must state each and every clause clearly with transparent structure and punishment for violation, in order to protect your data security.

You should also understand that the third-party partner is not your only risk. In any case that data is leaked outside of their control, for example, if their server gets hacked, or if they suffer from a DDoS attack from malicious sources, your information is at risk.You should also include potential risks in your contract for any possible harmful outcomes. In addition, always make sure that your outsourcing partner has the ability to protect themselves from these types of attacks before proceeding further.

Problem #6: Language And Communication Challenges

Language And Communication Challenges

We all know that working with people that are fluent in the same language is one of the best things for communication. However, sometimes, you have to work with people across the globe where English isn’t their native language. Even if their native language is English, the dialect difference might cause some issues in understanding, or just simply, the use of language. So how do we go about this?

The first thing you should do is to figure out if your outsourcing company is fluent in the language you are using. As the world is becoming more and more connected, it is not rare to find English-speaking talent in any part of the world. In addition to verbal communication, you should always make a habit of double checking through email or messaging apps, so that there is no miscommunication due to mishearing or loss of connection.

Always check with at least two or more people. This way, you do not have to come into situations where you have two people argue over what was said and what was not. You should also visit your outsourcing partner to make sure that the experts you are working with are influent in English and capable of understanding and following instructions.

Problem #7: Organizational And Regional Cultural Differences

Organizational And Regional Cultural Differences

The two biggest outsourcing issues that one should understand right away are: 1. You are outsourcing to another company and 2. You are (probably) outsourcing to another country. These bring up organizational and regional cultural differences. Maybe your own employees are used to working 9-5, but the outsourcing company employees work from 12 to 8. What if your employees prefer one-on-one discussions but your partner prefers to work as a group?

This is why ice-breaking sessions and training programs are very important when you first start working with a new outsourcing partner. Talk it out to understand how each other works and compliment each other. Try to understand that there is not just one way to reach a goal.

Problem #8: Expectation Vs. Reality

Expectation Vs. Reality

Let’s be honest, outsourcing companies tend to “over-sell” themselves while trying to negotiate a project. Have you ever seen those fake commercials everywhere on Facebook? Yes, one of those things. Okay so the sweet talk is over, and hell breaks loose, now how do you avoid this?

First, always, and always, check their case studies for their old projects. If they worked with a big organization before, check if the organization credits or recommends your partner. Ask for their portfolio and check out their former products. If you happen to know someone who worked with your partner, perfect! If your partner is starting to sound too good to be true, it probably is too good to be true. Be realistic with both your goals and expectations. Make sure that your contract covers any unexpected circumstances that might happen during the outsourcing project.

Another important factor before signing your outsourcing contract is to check if your outsourcing partner is financially stable to complete the project or cover any possible loss or delay that might happen. Check the country’s laws to see how they deal with negative results from an outsourcing project, and embrace yourself to prepare for even the worst result possible.

Problem #9: Control and Decision Making

Control and Decision Making

When you are outsourcing with a third party, you might feel like you have too little or too much control over the decision making process. Obviously, you do not want to lose your decision making rights as the project is yours. However, is it right for your partner to come to you for every single decision? How much control is enough?

You might be able to trust in your partner’s ability to finish your project in time, and with successful results. Yet, you want to make sure that the processing is transparent and you are there for most of the development. On the other hand, you do not want to waste time going through every single decision or having to deal with every minor issue. Because that is very time-consuming and you should put the matter in the hands of the professionals.

What if your opinion and your partner’s clash? Most outsourcing partners will give advice based on their experience, but the final decision is up to you. You can trust in their skills and experience, or stay with your beliefs, but you should always look at the two sides objectively.

Make sure that all the important decisions are yours to make, and that you have control of everything, even if it’s minor. It doesn’t mean you have to review everything, but you should have a clear, daily report from your outsourcing partner for safe-keeping, which also boosts reliability and makes the handover easier.

Problem #10: Delivery Failure or Delay

Delivery Failure or Delay

The worst of all outsourcing issues is undeniably delay or delivery failure. If you have a public release date, this brings up not only traumas, but loss of reputation. Chances are you will get compensation for failure or delay, but chances are… you won’t, or it won’t be enough. So how do you deal with this?

First, only work with trust-worthy partners. Do they have 100% on-time delivery rate? If they don’t, why? Having a non-100% delivery rate is a big red flag when you are looking at outsourcing partners, even if you worked with them in the past. Make sure that your contract states properly on the clause for delay for delivery failure. In addition, make sure to prepare for the worst. How are you going to regain your reputation or turn this thing around?

Moreover, you should always have your project ready way before the release date. There are many steps after software completion for example, quality testing, test run, alpha and beta test, etc. and you should never leave your project completion date too close to your supposedly release date.

In Conclusion


The above outsourcing issues should be pinpointed and discussed before every outsourcing project to avoid any potential problem before, during, or after the software development process. There are other outsourcing problems that your company might face, but solving these top 10 issues will give you a higher chance of success for your outsourcing project.

Ultimately, knowing these issues, you will know how to handle them correctly before further difficulties occur. We hope that this article is helpful and will bring light to you as you continue onto your next outsourcing project!

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