How your company can overcome the 5 biggest challenges in software outsourcing projects – Updated 2023 

Mar 10, 2022 | Automation, Development, Nearshoring

What if you could achieve scalability and expand the software development capability of your business, getting maximum return on investment? First, is very important to understand the biggest challenges in software outsourcing projects an how to deal with it 

Promises; every outsourcing company you know must have made you several. So, how do you choose the ideal tech partner? The secret is finding the one that has a culture aligned with your organizations and is willing to deliver more than allocated professionals: augmenting your software team is not a success metric – achieving business goals is. 

In 2021, 61% of US recruiters cited hiring developers as their biggest challenge, a process characterized as difficult, long and expensive¹. Yes, it doesn’t sound like an easy task to find the right IT partner who will solve your software demands, especially when there are simply not enough professionals in the market. And even when you find them, prices are high and competition is fierce. In the end, reality does not change: meeting the demand for digital products and innovation is no longer a competitive differentiator – it is a matter of survival. 

That’s why, in this article, we’ve separated 5 of the main challenges in software outsourcing projects found in large companies in North America, and we’ll show you the approach your ideal IT partner should use to overcome each of them in 2022. If your tech partner is not helping you to overcome these challenges efficiently, it may be time for you to rethink the relationship. 

IT Nearshoring

Challenge 1 – Quickly filling critical high-demand positions 

This is by far one of the main challenges – and one of the hardest to overcome. It’s very common for organizations to urgently need to replace or expand their digital product development teams, however, as it’s hard to hire IT specialists, even outsourcing companies can end up taking a few days to be able to allocate the new team members to the projects that need them, and this ends up becoming a bottleneck. The consequences are obvious: delayed product launches, lost clients to competitors, lower revenue generation, and so on. Among the positions in greatest demand, full stack, back-end and front-end engineers stand out, but this reality can also apply to any other specialty within the area of software development. 

The solution: your tech partner must meet at least three requirements here. The first one is to have an agile, careful recruitment process focused on high-performance professionals, applied by recruiters specialized in the software market. This will ensure that the vacancy on your team is filled quickly and your project will not suffer from a lack of specialized resources. 

The second one is to offer different engagement models, that is, to present you more than one option on how you can hire the service that will solve your problem. This way you guarantee not only the financial health of your project by hiring only those team members that can fit your budget, but also the contractual form that best suits the reality of your business, providing you with more security and flexibility to change the size of the hired squads at the moment you prefer. 

The third one is to have internal training processes for employees. At first glance it may seem that this has no impact on you, but this is a misguided view. Your outsourcing partner must have a culture of continuous training capable of forming high-performance professionals quickly. This not only increases their delivery capacity, but also strengthens the company’s internal expertise and guarantees a differentiated performance in relation to competitors that do not adopt such a culture. 

Read our article to understand how to overcome the difficulty of finding IT professionals.

Challenge 2 – Capacity to absorb economic shocks and find opportunities to thrive (nearshore is the best choice) 

Companies that only have in-house IT teams suffered the most when the covid-19 pandemic forced organizations to readapt. There is no demerit in that, but it was at that moment that many companies realized that the digital world has changed how business is done forever, and today, more than ever, the customer will prefer to acquire their products through a cell phone or computer than going to a physical store. In addition, outsourcing companies that had a fully face-to-face work model also suffered from the readaptation, delaying the delivery of needed professionals. Not to mention that the vast majority of IT specialists in North American are considerably expensive. 

The solution: your tech partner must have a business model based on a remote and dispersed work environment, with development teams managed in multiple locations. Companies that have adopted this practice are among those that best supported their clients and helped them not only to absorb the economic shock and deal with the high digital demand during the pandemic, but also to use this context as an opportunity to take growth leaps. Within almost every business model, the mantra will be to optimize distributed collaboration to achieve business goals while driving down costs, ensuring business continuity, creating redundancy and increasing flexibility and agility.  

That’s why finding a tech partner that is a nearshore company can be the right fit for your business (especially if you choose nearshore companies based in Latin America). Those tech organizations have pools of skilled, affordable talent (which means high quality professionals using very competitive pricing model). They also  have time-zone alignment with US operations, tend to be fluent in English, and a solid cultural fit with companies in North America. 

Challenge 3 – Getting the maximum performance and results from outsourcing and staff augmentation 

Assembling your project team doesn’t mean that it will perform as expected. Often you go through a reasonable period of negotiation with your outsourcing partner until you manage to assemble the team that will finally make your project take off. But days, weeks and months go by, and the project does not go at the expected pace. Deadlines are extended, customers are lost. Who never faced this? 

The solution: there are at least two points to consider here. The first and most obvious one is the level of IT professionals on your team. When it comes to digital products, as harsh as it may sound, you can’t choose the cheapest investment over quality. How many customers are lost because the user gave up on buying due to the slowness of the system? How much revenue is lost when customers abandon your service for lack of a proper support channel, or for navigating a confusing and unfriendly platform? 

>> Read our business case to understand how a change in customer facing technology increased customer satisfaction and double sales! <<

High-performance professionals are essential for digital product projects. Of course, that doesn’t mean you always have to choose the most expensive partners. You need to know where to look and who to trust. There is a sweet spot between cost and quality, and it can only be achieved when you find a technology partner that goes far beyond team members delivery. We are talking about the second point of the solution to this challenge. 

The ability to ensure high-performance management. The management process of the professionals delivered by your outsourcing partner must be agile, secure and very transparent. In addition, they must have fast and clear communication with the teams that already work in your business, whether internal or from other companies. However, none of this is possible without an intelligent consultancy that, besides being able to deliver resources, knows how to manage them in an agile way. Therefore, this is a crucial differential that your tech partner must have: high management skills! This is what “Next-Level Partnership Management” actually means; when you find your ideal technological partner, you go to the next level and position yourself ahead of the competition, growing faster and spending less. 

Which brings us to the fourth challenge. 

Challenge 4 – Make outsourcing more than just resource allocation / staff augmentation 

Assuming you have the necessary team members at your disposal, does this guarantee the success of your project? The answer is obviously no. What good are the most talented minds if they are focused on the technology instead of your business too? In the midst of this digital revolution that we are living in, sometimes people forget that IT is a way to obtain business results, not the other way around! If your business wants to be able to offer better services in more efficient ways, in order to grow exponentially, every tech resource must be 100% aligned to the goals of your business. Even the most talented tech specialists will not be able to deliver the best digital product to you, if there is not a strong emphasis placed on your business being carried out in parallel, capable of translating the nuances of your company’s challenges to those who will actually solve these problems through digital solutions. Then you think: “Okay, but how do I solve this? Are you telling me that I will have to hire a business-focused consultancy as well? Oh, I get it now, this article is trying to make me go bankrupt…” 

Nope! We are actually telling you how to save money and get better results through technology. Let’s see how. 

The solution: how about a software outsourcing company that is also specialized in business objectives? Yes, they exist, and they don’t necessarily charge more to work with you. Of course, competitors don’t want you to find out about this, but the truth is, it’s a cultural matter. Some companies were built with this guideline at their core and are organizations that are highly capable of studying and understanding their clients’ businesses, in order to deliver and apply IT resources assertively, ensuring the long-desired ROI and success of digital products. It can be hard to find these companies in the big ocean that is the tech industry, but they are in the market (and many of they are nearshore companies). In other words: stop desiring only the allocation of IT specialists, and start working with partners who are really interested in the success of your business. It’s that thing: it’s not about allocating a bunch of resources; it’s about allocating the right resources in the right place and in the right way. How will your partner be able to do that, if they don’t fully understand your business? 

And now the last challenge on this list. 

Challenge 5 – Finding the best professionals in the best technologies 

There is a specific demand for certain types of technologies and platforms in the market right now. Developers who are proficient in these programming languages are in high demand, so they tend to be more expensive and difficult to find. According to a recent study by Accelerance² (one of the largest authorities in the outsourcing market in the world), Java, Python, C# and others are among the most demanded technologies. If we go to the world of hyperautomation, we can also include the high demand for professionals capable of working with high-performance tools in process automation, such as Camunda BPM, for example. 

The solution: your tech partner must have pools of experts in all the major technologies and be able to quickly deliver them as you need them. If your outsourcing partner is failing in this regard, maybe it doesn’t fit even in the first point addressed in this article (agility in delivering demanded professionals). 

Now tell me, have you ever faced any of these challenges in software outsourcing projects? Even better: do you need a tech partner that is able to overcome all these barriers for your business?

NTConsult is a global company with headquarters in the US and Brazil and development centers throughout Latin America. Within our almost 20 years of experience in the market, we have gathered the necessary expertise to deliver every solution mentioned in this article. And, as a nearshore organization, we can show you how all of that is possible for an affordable price. 

Leave your message at the end of this page and we’ll be in touch shortly to present solutions that will help your company to overcome any challenge through technology and the most talented specialists in the tech market. 

If you liked the content of this article, you might as well want to know more about us: 

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References 1 and 2: that information were gathered in a study performed by Accelerance:   

Philippe Alencar - NTConsult

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