Software Development Challenges

The development industry today is evolving at an alarming rate. This evolution has been significantly influenced by the globalization of custom software solutions and software development service offerings. The projects undertaken by the custom software development companies bear many challenges. With such a vast field and the infinite variables to consider, there are many challenges that even the best software development companies in the USA may have difficulty overcoming.

And we are not just saying this, the following statistics indicate the same.

Software Development Performance Stats

software development statistics

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Every software development project comes with several factors that can influence its outcome. Studies show that only one in three software projects undertaken by a custom software development company is successful. And that is just one statistic. Here are a few more:

  • According to Project Management Institute (PMI), organizations are wasting an average of $97 million for every $1 billion invested. This is a result of poor project performance.
  • In PMI’s survey, 14% of IT projects fail and 32% of projects lose their budget upon failure. Apart from this, 49% of the projects experience confusion about the scope of the project.

Standish Group’s Annual CHAOS Report is considered one of the best for observing the industry trends for unsuccessful projects in the past year. Here’s what it says:

  • About 52% of software development projects can be categorized as ‘challenged projects’. Meaning, these projects have either failed to meet scope-related expectations, time or budget-related expectations.
  • In the past 20 years, at least 23% of software projects have failed.

Startups are under much harsher statistics.

Over 21.5% of startups fail in the first year. 30% fail in the second year, and 50%  and 70% of projects fail in the fifth and tenth years, respectively.

Lack of expertise or research, insufficient marketing, and miscalculation of budgets are some of the most common reasons behind the failure.

Huge burdens on small businesses diminish their scope. Businesses led founders who have less or no experience struggles a lot.

Outsourced custom software solutions can be a great solution for startups. It is highly cost-effective, time optimized and it does not require micromanagement as the service providers are experts in the field. So, it helps take a major workload off the busy shoulders of the entrepreneur.

We are a reliable and qualified outsourcing software development solution provider, especially for startups. Of course, outsourcing can help ease production for all custom software development companies.

With the many challenges that accompany the software development process, it is almost necessary that companies, no matter how large, consider specialized custom solutions for production.

Also Read: Our Expert Guide on Custom Software Development Cost

Common Challenges Faced by a Custom Software Development Company are

The above-mentioned statistics prove that software development companies in the USA face recurring challenges that limit their project goals and progress.

Some of these common issues faced by custom software solutions providers are mentioned below:

  • Constant Technological Advancements

As they say, change is the only constant. Although it is a blessing that technology is evolving at a phenomenal rate today, it also leads to added pressure for software development service companies and the professionals in the field.

Software development companies are expected to leverage upcoming technology trends in their ongoing projects. To cater to the new technological specifications, such as mobile-first or mobile-only or desktop-first, valuable time is spent.

  • Time Restraints

Time Restraints

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It is no secret that software development is a time-sensitive game. Developers can deal with stringent and often difficult deadlines. This, in turn, increases the amount of pressure experienced by the developers working on the project. As a result, the efficiencies of development teams are compromised, which leads to the development of mediocre quality software products.

  • Continuously Changing Product Needs and Requirements

A major reason behind the complexity of software projects is the constant changes in requirements. The development of successful products requires developers to not only thoroughly understand the concept behind the business but also have an in-depth understanding of the target audience. Once the developers understand this, they can build products that offer the features that users will find relevant. However, with so many variables involved, it also becomes trickier to solve the equation.

  • Limited Resources and Budgeting

The amount of money you plan to spend should align with the project’s priorities. Developing an accurate time-estimation plan with optimal distribution of resources can be a huge challenge. These hindrances usually have a negative influence on the productivity, efficiency, and overall performance of software development teams.

  • Security Challenges

Knowledge is power. In today’s world, data takes precedence over any other organizational component as the most essential. One of the biggest challenges for custom software solutions providers or software development companies is protecting sensitive information. It is important to incorporate it as a strategic business issue for which you need to take many measures.

Always using the latest programming language, reviewing code, performing essential core activities to produce secure applications, and being on a constant lookout for hackers is a lot of work. This can, in turn, cause hindrances in the development process.

Also, read our related post on Software Development Outsourcing

  • Cross-Platform Integration

A seamless experience across all platforms, channels, and devices is a common expectation that the clients of a development company usually have. Interoperability standards are becoming harder to implement. They lead to unplanned expenses, delays, lowered quality, and sometimes, even the failure of the project.

  • Management Challenges

Development teams have people with different mindsets and diverse job roles, all responsible for distinct responsibilities. When such teams face high pressure and sensitive deadlines, some conflict within the team is inevitable.

If these conflicts are there, they can very well have a negative influence on the outcome of the project. To overcome this challenge you need to have a management team that is having experience in overlooking tasks, budgets, and is responsible for keeping the coordination. You can also seek help from companies offering software development services.

  • Undefined Quality Standards

The primary goal of most custom software development services & solutions providers is to solve a business problem. Developing a solution demands efficient project management and effective stakeholder-expectation management. However, it is common for clients themselves to not know exactly what they want. This lack of vision can prevent the project from moving forward. Sometimes, the constant change in requirements because the client is also not sure of their needs also proves a complexity.

This is why maintaining effective communication with the client and truly understanding their vision is a key factor in preventing projects from failing. The whole team must understand the quality expectations associated with the product under development. Failure to do this may result in a derailed project.

  • Code Development Challenges

Code Development

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Sometimes, to meet deadlines developers may overlook reviewing their code or suppressing errors. However, such practices only lead to disappointing results.

It is important to remember that for a successful launch, following a formal quality assurance process is imperative.

  • Numerous Tests For Quality and Bug Fixes

To ensure that the actual outcome of a project meets the intended outcome, various iterations of testing occur throughout the project cycle. Most products undergo multiple rounds of testing, including unit testing and functionality testing, to ensure that they perform well throughout the different phases of development.

Sometimes, this process, as critical as it is for development, becomes very tricky as it gets harder to isolate issues, requiring escalation to senior IT staff/developers. So, the testing phase can pose a great challenge for even the best software development companies.  But, it is equally important for optimum results.


Modern businesses must focus on developing, adopting, and mastering new development methods and technologies. One important step that can help with the same is outsourcing. We are an offshore software development company in the USA, since 1999. The company provides specialized custom software development solutions, next-gen technology services, and mobile app development services.

Frequently Asked Questions

The following are the obstacles that startups encounter when it comes to software development:
– Resources are not available
– Collaboration that fails to deliver results
– Prioritisation and goal-setting

A software risk management methodology enables businesses to prioritise and assess software vulnerabilities before developing a tailored remedy plan. A high-quality software security risk management tool can assist a company in avoiding costly errors.

The project’s privacy and confidentiality can be protected by signing NDAs and Confidentiality Agreements.

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Software Development Companies Challenges: INFOGRAPHIC

Software Development Companies Challenges Infographic