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Choosing software outsourcing services has become an important strategy that helps businesses optimize operations, save costs, and enhance technological capabilities in today’s modern business environment. However, the process of selecting a partner is not simple. Many businesses may make mistakes that cause projects to fall short of expected outcomes. The article below will highlight five common mistakes and how to avoid them.
What are software outsourcing services? Why are they increasingly preferred by businesses?
Definition of software outsourcing services
Software outsourcing services refer to a business collaborating with external partners to develop, maintain, or upgrade software applications instead of building an in-house team. The scope of services may include custom software development, management systems, CRM, ERP, portals, mobile applications, etc., tailored to the needs and scale of each business.
>> See more: Common types of software outsourcing services for businesses
Benefits of using software outsourcing services
- Optimizing operating costs: Reduce costs for recruiting, training, and maintaining an in-house development team; budgets can be allocated more flexibly to other core activities.
- Improving work efficiency: Expert partners with experience and standardized processes help shorten analysis, design, and development time.
- Accessing advanced technologies: Businesses benefit from the technology capabilities and diverse implementation experience of software outsourcing service providers.
- Shortening deployment time: With readily available teams and well-structured processes, deployment timelines are often faster than building a team from scratch.
5 common mistakes when choosing software outsourcing services
Not clearly defining requirements, scope, and acceptance criteria
Many software outsourcing projects are launched while functional requirements, business processes, and implementation scope remain unclear and lack well-documented specifications. As a result, each party may have a different understanding of “what the system needs to do”.
During implementation, the scope can easily creep, items may be added or removed continuously, leading to extended timelines and additional costs. By the time delivery comes, the product may no longer meet the original needs, forcing the business to make multiple adjustments.
Businesses should prepare sufficiently detailed requirement/business documents and align internally before working with a partner. Scope, acceptance criteria, and the definition of “done” need to be clearly stated in the contract so both parties share the same reference standard.
Choosing a contractor lacking experience with the specific system and domain
A common mistake is selecting a contractor primarily based on price or first impressions, without carefully reviewing their hands-on experience with similar systems and industries. In such cases, the capability of the software outsourcing provider may not match the complexity of the problem.
As a result, system architecture may be suboptimal, proposed solutions may not fit the business, and integration or scalability can become difficult. The project may fall into a repetitive fix-and-redo cycle, wasting budget and reducing internal confidence in the technology solution.
Before deciding, businesses should request case studies, demos of projects implemented in closely related fields, and introductions to key project team members. Evaluating real projects helps businesses choose the right-fit partner.
Lacking a mechanism for progress, quality, and communication management
Many projects start with strong collaboration spirit but lack a clear management framework: no fixed progress reporting schedule, no designated business-side owner, and no agreed approach to testing and phased acceptance. Coordination therefore depends largely on fragmented communication.
Without such a mechanism, businesses struggle to understand the real project status, while functional or quality gaps may only surface near the end. Adjustments at that stage often take more time and can delay the official go-live plan.
From the time the software outsourcing contract is signed, both parties should align on the project management model, use shared task management tools, and set regular meetings. Intermediate testing and acceptance milestones should be clearly defined to better control both schedule and quality.
Overlooking long-term operation, maintenance, and scalability planning
Many businesses focus almost entirely on initial implementation costs and scope, but spend little time discussing operation, maintenance, and upgrades after the system goes live. These topics are often mentioned only in general terms.
When the system runs in real conditions, the lack of long-term planning can lead to performance degradation, emerging issues without a clear support mechanism, and difficulties in adding new features or scaling users. This makes the business more reactive and potentially more costly in the long run.
From the partner selection stage, businesses should ask for a clear maintenance approach, incident handling method, and upgrade roadmap. Including these elements in the agreement helps businesses stay proactive in both operations and budgeting.
Neglecting security, legal terms, and source code ownership
During negotiations, clauses on data security, legal compliance, and source code ownership are sometimes treated as less important than price and functional scope. These gaps can become vulnerabilities for the business later.
If it is not clearly defined who owns the source code, the code and technical documentation handover conditions, third-party library usage scope, and confidentiality commitments, the business may become dependent on the contractor or face major risks in case of data incidents. Migrating the system to another partner also becomes difficult.
Businesses should clarify these items directly in the software outsourcing contract: source code ownership and usage rights, required security standards, responsibilities, and penalties for violations. This approach helps protect business interests throughout the project lifecycle.
>> See more: Software outsourcing risks businesses need to know!
Criteria for choosing the right software outsourcing service for businesses
Define project goals and scope clearly from the start
Businesses need to clearly identify business objectives, functional scope, and the primary user groups of the system before searching for a partner. This helps avoid the risk of “building while figuring it out”, which can cause continuous project changes.
When goals, scope, and priorities are clear, businesses can more easily evaluate solution proposals, compare quotations, and control progress and quality throughout implementation.
Evaluate software outsourcing partners using clear criteria
Choosing a software outsourcing service provider should not be based on price alone. Businesses must also assess key factors such as proven industry experience, technologies used, development team capability, and post-deployment support capacity.
A reputable partner will deliver a suitable solution that helps businesses not only address technology challenges but also achieve long-term goals in quality and operational efficiency.
Plan implementation in phases (MVP – scaling)
One effective approach when working with software outsourcing partners is to implement the project in phases, starting with a minimum viable product (MVP). This approach helps businesses save time and costs while minimizing development risks.
After the MVP is deployed and validated, features can be gradually expanded to meet future growth needs, thereby maximizing the value that software outsourcing services bring to the business.
>> Learn more: Why choose professional software outsourcing instead of building an in-house dev team?
Checklist for businesses before signing a software outsourcing contract
- Prepare clear processes, functions, and project objectives before sending them to the outsourcing provider.
- Define the scope of work, phase-by-phase timelines, and acceptance criteria in specific terms, and document them in writing/contract.
- Align on terms for confidentiality, data storage, data access, and source code ownership after handover.
- Appoint a single key contact to communicate, approve, and coordinate with the outsourcing team throughout implementation.
- Estimate costs for maintenance, technical support, and post-deployment upgrades to avoid being unprepared when scaling is needed.
Choosing software outsourcing services is an important strategy that helps businesses optimize costs and improve efficiency. However, to achieve the expected results, businesses need to clearly define requirements, select an experienced partner, and ensure key factors related to security, source code ownership, and long-term maintenance. Thorough preparation from the outset will help businesses maximize value and minimize risks during implementation.
>> You may be interested in: Comparing software outsourcing costs across regions worldwide?
To optimize software development processes and enhance technology effectiveness, NLT Group is a reliable software outsourcing partner that businesses can trust with confidence. Contact us for free consultation and start building a software solution tailored to your needs.
Nam Long Technology Investment Group (NLT Group)
- Hotline: 0911 379 581
- Email: kinhdoanh@nlt-group.com
- Tax code: 0313339640
- Address: 43T Ho Van Hue, Đuc Nhuan Ward, Ho Chi Minh City
Frequently asked questions about software outsourcing services
Are software outsourcing services suitable for small and medium-sized businesses?
Yes. This is a suitable option for SMEs that want to implement technology solutions but are not yet ready to make a large investment in an in-house team.
Should we choose a domestic or overseas software outsourcing partner?
Each option has its own advantages. Domestic partners are convenient for communication, time zones, and faster support; overseas partners may offer advantages in cost or deep technological expertise. Businesses should consider their budget, security requirements, and collaboration approach.
How long does a software outsourcing project typically take?
The implementation time for a software outsourcing project usually ranges from a few months to one year, depending on the scope and complexity of the requirements.
How much does software outsourcing cost?
The cost depends on the functional scope, technologies, implementation timeline, and quality requirements. Businesses should request a detailed quotation by item and phase to make comparisons easier and plan the budget effectively.
How can we ensure the quality of software outsourcing services?
Businesses should choose a partner with proven experience, a clear project portfolio, a robust quality management process, reputable certifications (such as ISO, CMMI), and align on quality criteria, testing procedures, and acceptance processes from the outset.
Can the business continue developing the system after handover?
If source code ownership and maintenance terms are clearly agreed from the beginning, the business can continue developing the software system after handover.
