Top risks to avoid when Offshoring Software Development - Coffee with CIS - Latest News & Articles

Top Risks to Avoid when Offshoring Software Development

Building a dedicated software development team remotely has many benefits. Most businesses are outsourcing the software because it saves a lot of money and they get to utilize the service of experts in creating custom software solutions. Nowadays a lot of businesses are using it to reduce the costs by transferring the work to outsiders instead of completing it internally. While outsourcing can be good for saving money, there are possible risks associated with offshore IT services which can add up to your expenses.

It’s a good business strategy to assess the risk and mitigate the potential dangers in advance. So here are some of the risks associated with offshoring software development:

Cost risk – Businesses usually go overboard with their budget when offshoring software development. It’s crucial that they take additional travel, management and associated expenses into account. Additionally, it is also essential that you choose the suitable pricing model for your requirement and type. There are three available options – Time and material model, Fixed-price model and cost-plus model.

Time and material model is best for the businesses which don’t have a clear image of the final product. It enables you to add features during the developmental process. The end product will depend on the materials, tasks and resources used in the process. Before launching the project, it’s essential that you define the upper budget limit to your web development company so as to avoid the price growth during the process.

Fixed price model is not very flexible, but it is the most transparent of all. In this everything is determined in advance – timeline, budget and scope of the project. No further changes are allowed in the project.

The cost-plus model is also called the dedicated development team. It is best suitable for large-scale and long-term projects. It gives control with which you can make necessary adjustments that are needed in the middle of the project. The cost involves service provider’s fees and the developers’ salaries.

You need to weigh all the pros and cons of each price model before deciding the best one for your project. For a risk-free process, a transparent pricing system is a must.

The risk associated with performance – You should ensure that the development team will provide you with high-quality services without any supervision. You should also make sure that the future software solution will perform in a similar way as when you would have built it in-house. The codes should be well written, and they should be optimized and tested to work in a specific environment. So choosing a reliable software development company is highly imperative. You should find out if the company has worked in a similar project in the past. This will provide you with the peace of mind that your project will be executed in a nice manner.

Read the blog- How A Business Can Succeed by Software Development Company?

Misunderstanding –The Custom software services provider that you have chosen should understand your business requirements and your audience. You need to take a few preventive measures to avoid the delay in the project and to avoid the wrong decisions.

You should explain the specific goals and preference for the company. Also, sharing your company’s processes and vision helps. You must also consider providing the Product requirement document (PRD) along with the objectives of your business model so that your project is executed according to your expectations.

To deliver the user-friendly solution and interface to your audience, mention your specific audience-centric requirement to the company. A well thought out plan which is properly structured will never fail.

Poor management – Its challenging to manage a team remotely situated but by using several tactics you can manage it in a proper manner. You can avoid the risks involved in the software development process by adopting the right management strategies.

First of all, you need to ensure that your internal and external teams are in constant touch. You can use different tools like emails, messengers and Skype to achieve it. You can use scrums and agile to manage the teams and providing them with the feedback. Always stay informed with the progress in the project and keep the communication alive with the members of the remote team.

Moreover, you need to ensure that you are conducting regular meetings with the team and visiting them regularly. This will prevent any kind of misunderstanding and will also allow great collaboration during the process.

Data security risk – It’s essential that you sign the NDA and security protocols before embarking the project with the remote team. Before selecting a partner, you should ensure that the company has security certifications along with a clear security policy. This will keep your business safe from data breaches.


It’s vital to know all the possible risks associated with the offshoring software development so that you can get the maximum benefits from it.Strong cooperation and reliable partnership with the Offshore IT services providers will ensure that the project goals are successfully achieved. For successful collaboration, you should formulate a solid management strategy. Regular communication with the development partner is essential for a successful collaboration. To mitigate the risks and hidden dangers, you should take all the preventive measures in advance.