According to the Ncube studies, there are about 21.500 software development companies. However, when it comes to selecting the right partner, they’re not all good options. Some would help save costs and provide effective tech stacks, while others only waste your time and budget. Then, how to know if your pick has gone wrong? 

In this article, I’ll lay down 8 warning signs that a software development company does not have your interest at heart. This post also walks you through how to avoid mistakes when looking for the software house in the process. Let’s dive in. 

1. 8 red flags of a software development company

Before going through the warning signs of a software partner, remember that there’s no such thing as a standard to define a good and bad one. Hiring a software development firm is all about finding the right providers to do the right thing. What didn’t work for your business can be the neat solution to others’ problems. Hence, if your first choice of software house is a total train wreck, there are still thousands of vendors out there that would mix-match with your business’s vision, objectives, and brief. 

 Hiring a software development firm is all about finding the right providers to do the right thing

That being said, it would help to understand the red flags of a software development company. Not only does steering away from danger signs save time and effort, but you can keep your head down.

Here are 8 alerting signs to keep in mind when looking for a software development company. 

1.1 Not understanding clients’ need 

There are various reasons why software projects fail, but the most common one boils down to a lack of understanding of clients’ needs. They often don’t know what the customers really want in the end product or where their pain points are. This results in failing to fulfill business objectives efficiently from the onset. 

A software house that could read your brief from the perspective of technical and business

As entrepreneurs, it would help to look for a software house that could read your brief from the perspective of technical and business. That means they could understand that it’s not all about the code and technology behind the software product – it’s about improving visitors’ experience, driving traffic, and prompting customers’ action. The first sign of a good software development company is always setting the client’s objectives as their top priority. When they haven’t, it’s time for you to leave for another one. 

1.2 Poor management model 

Most clients preferred the ability of custom web design in Singapore when looking at the partner’s tech stack. However, according to research, 25% of all software projects fail because of bad project management. Many clients get into contracts by judging the vendor’s tech stack and experience but ignore their management model.

Remember, you cannot expect great results if development services lack a management model. Why? Because poor management often results in a series of unnecessary changes within the project, not to mention wasted time and resources. You have no idea what’s the developer doing, so there’s no way of knowing if the project is going on the right path. It’s getting worse if the problems arise without you being reported. As a partner, you should have the right to know if there’s anything wrong with the project. 

Most clients preferred the ability of custom web design in Singapore when looking at the partner’s tech stack

1.3 Not updating the latest technology trends and tools

Various technology trends and tools are emerging every year in the software field. One year, a tool is considered the most innovative skit, the following year, it is outdated and replaced by another tool. In 2023, there are already more than 20 main software development trends. That’s why the most important criteria for hiring a developer are the willingness to learn and the ability to self-learning. That’s also why it is crucial that your software development company stays on top of these trends and is familiar with them. 

Imagine that your tech partner used outdated technologies, tools, and methodologies. Then what are you going to expect for the end products? The software development industry is one field that is brewing with innovations. Before putting the pen on the paper, ensure that you are shaking hands with a partner doing the hard work of updating the tech trends. 

Various technology trends and tools are emerging every year in the software field

1.4 Lack of Thorough Testing

Creating digital products is only sometimes a smooth process, even when you are working with the best software development company in the world. Every piece of software has bugs. Launching products without thorough testing costs you more in the end. Look at the example below to understand how necessary the testing step is. 

On May 3, TikTok, the entertainment platform, experienced a glitch that displayed the wrong followers. Users reported that their accounts were blocked without any explanation. After that, TikTok confirmed the issue and announced that the company was working on resolving the glitch. These types of glitches can easily be prevented with software testing. 

To bring the user the perfect product, testing is a critical step. It helps you pinpoint the defects and discover bugs. 

Launching products without thorough testing costs you more in the end

1.5 Lack of execution strategy and detailed planning

In fact, 55% of projects fail due to lacking time, as confirmed by software development project failure statistics. The reason boils down to a lack of good coordination and detailed planning. Teams must implement a bottom-up planning process that identifies dependencies between deliverables and includes estimates from the engineers themselves. To solve this problem, after the release plan is set, software development company should run daily 15-minute stand-up meetings where issues surface and new risks are identified and managed. 

Software project management is a crucial part 

1.6 Vague portfolios

A portfolio is a collection of a company’s past projects successfully built and delivered to clients. So whenever you need to hire a software development company, make sure to check its portfolio. Examine what industries the organization has served and if there are similar projects to yours. 

Website is also an example of a portfolio 

1.7 Providing ridiculously cheap options 

According to a global outsourcing survey by Deloitte, 59% of companies use outsourcing as a cost-cutting tool. But as the old saying goes, “If you pay peanuts, you get monkeys.” And it stands true that going with the cheapest option could harm your business. If you decide to offshore to the cheapest IT provider, you have to consider the high probability of communication issues, culture clash, and low-quality of work. Remember, if the quote seems too good to be true, it probably is. Choosing a partner to outsource software development too purely on price is a dangerous path. 

Choosing a partner to outsource software development too purely on price is a dangerous path

1.8 Poor communication 

Poor communication is one of the most common causes of failed projects. Poor communication here refers to the lack of experience of the offshoring/nearshoring team, poor English level, and the need for more transparency in the development process. 

Based on a report from Accenture, communication and quality of service are more important than price for customers today. Clear and persistent communication is vital in software development. It helps you stay up to date on the progress. A first-class software development company will always allow you to communicate without obstacles. 

Poor communication is one of the most common causes of failed projects

2. Why does your pick go wrong? 

Choosing a software development company takes a long time and a lot of effort to research and examine. It is the process of many steps in which none shouldn’t be skipped.  Let’s see some causes leading to the wrong choice of software vendors. 

2.1 Not Doing Background Research

Among the things, business leaders tend to do wrong when looking for good software outsourcing services is the need for more time and effort they invest in background research. Don’t focus solely on cost efficiency. The cost plays an important role, but when selecting a partner, there are several other factors to consider, including a positive brand image, a fully trackable history, customer feedback and reviews, a vast portfolio, and transparent pricing.

2.2 Limited Discovery

New product development is rarely easy and bears hefty expenses. When designing a new brand product or feature, many companies wrongly assume what their potential customers (or existing users) are looking for. That’s why it’s essential to invest in extensive research and discovery so you can validate ideas upfront before sending them to delivery.

When designing a new brand product or feature, many companies wrongly assume what their potential customers

2.3 Lack of Tech Knowledge

If you are looking for a tech partner, you want them to know more about tech than you. Just make sure you don’t lose control of the tech decisions that are being made. You should educate yourself and improve your tech knowledge to know what you are paying for. I’m not recommending you go and learn how to code – far from it! You should, however, learn the basics to have an educated position in the conversation. Remember, many tech decisions are vital business decisions. 

3. How to choose the right software development company? 

Now that you know things to avoid, here are three things to do at the outset when selecting a vendor:

1. Research your potential software outsourcing partner and their expertise in specific industries and technologies, as well as the company’s background, most recent projects, and staffing abilities.
2. Request case studies and references from previous clients/customers. Be sure to read their stories carefully.
3. Asks questions to ensure your data will be protected and secure.

Choosing a software development company is all about having the right people do the right things

Software development company in Singapore can be a great option for clients there. You just have to be careful and do it the right way. Always keep your eyes peeled for red flags. If you have any questions, why not contact us? We’d love to hear from you. 

>>> Read more: Trends Software Development Outsourcing in Singapore

Final Thought

At the end of the day, choosing a software development company is all about having the right people do the right things. There is no single approach or clear methodology to find the right match in a day. Steer away from the most common mistakes and follow use-proven practices and real-life advice, and you’re already halfway to success. What do you think are the major risks of outsourcing software development? Drop a comment below, and let’s start a conversation!