Hidden Biases in Software Development Outsourcing
Last updated: September 05, 2024 Read in fullscreen view
Recommended for you
- 01 Aug 2024
The Standish Group report 83.9% of IT projects partially or completely fail 427/2190 - 13 Apr 2024 Lessons on Teamwork and Leadership from Chinese story book "Journey to the West" 102/1142
- 07 Jul 2024 Top Fintech Companies in Vietnam Driving Innovation Across Digital Banking & Investment 78/168
- 02 Nov 2021 What is Terms of Reference (ToR)? 67/1615
- 18 Oct 2020 How to use the "Knowns" and "Unknowns" technique to manage assumptions 55/1131
- 05 Mar 2026 Top 7 Full-Cycle Web App Development Companies for Your Business in 2026 55/65
- 19 Oct 2021 Software development life cycles 53/726
- 13 Oct 2021 Outsourcing Software Development: MVP, Proof of Concept (POC) and Prototyping. Which is better? 53/510
- 03 Apr 2022 Microsoft Solutions Framework (MSF) 53/1335
- 17 Mar 2026 How Much Does it Cost to Build an AI Agent in 2026 50/93
- 02 Feb 2026 What Is the Total Cost of Web Development for Small & Medium Businesses? 50/69
- 06 Feb 2026 How Much Does a CPA Cost for a Small Business? 50/59
- 08 Oct 2024 Vietnam: The Rising Star in Global Outsourcing – Trends and Costs for 2025 48/400
- 21 Aug 2025 Top 30 Oldest IT Outsourcing Companies in Vietnam 47/150
- 31 Aug 2022 What are the best practices for software contract negotiations? 46/301
- 17 Mar 2026 Top 10 Product Development Companies in Chennai 2026 (Updated) 46/52
- 12 Oct 2022 14 Common Reasons Software Projects Fail (And How To Avoid Them) 45/596
- 13 Dec 2020 Move fast, fail fast, fail-safe 45/354
- 12 May 2021 The Real Cost Between Outsourcing IT vs In-House: A Quick Comparison 42/477
- 11 Mar 2026 OEM, ODM, and OBM in Software Development: Choosing the Right Growth Path 40/43
- 03 Oct 2020 Outsourcing Your MVP Development - Streamlined Solutions for future 39/460
- 01 Oct 2020 Fail fast, learn faster with Agile methodology 38/1073
- 11 Mar 2024 Why You Should Hire Odoo Developers from Vietnam to Customize Your ERP System 38/141
- 24 Nov 2025 Top Blockchain Companies in Vietnam 37/80
- 06 Feb 2021 Why fail fast and learn fast? 36/485
- 14 Oct 2021 Advantages and Disadvantages of Time and Material Contract (T&M) 35/897
- 09 Sep 2022 Close Collaboration and Communication Can Overcome the Challenges of Distributed Teams 34/229
- 05 Aug 2025 Why Doesn’t South Korea Outsource Its IT Projects Like Other Developed Countries? 34/126
- 05 Jan 2022 What Outsourcing Engagement Model is Right For You? 34/344
- 01 Jan 2023 4 New IT Outsourcing Pricing Models to consider in 2023 33/394
- 02 May 2022 What Is RAID in Project Management? (With Pros and Cons) 33/852
- 24 Nov 2021 What is the Actual Cost of Hiring Cheap Developers? 32/415
- 21 Oct 2021 Advantages and Disadvantages of IT Outsourcing 32/379
- 18 Aug 2022 What are the consequences of poor requirements with software development projects? 31/288
- 01 Mar 2022 Top 5 reasons why outsourcing to Vietnam is a smart move 30/307
- 12 Aug 2022 What is End-to-end project management? 30/479
- 05 Sep 2023 The Cold Start Problem: How to Start and Scale Network Effects 30/219
- 04 Apr 2024 Unlock Vietnamese-Japanese outsourcing potential 29/258
- 18 Dec 2023 The Cone of Uncertainty in Scrum & Requirement Definition 29/729
- 03 Dec 2025 IT Outsourcing Solutions Explained: What, How, Why, When 28/53
- 15 Oct 2022 Project-based team model for one-off and pilot software development projects 28/834
- 04 Oct 2021 Product Validation: The Key to Developing the Best Product Possible 27/330
- 07 Jul 2022 Managing Project Execution Terms 27/431
- 07 Oct 2025 Case Study: Using the “Messaging House” Framework to Build a Digital Transformation Roadmap 27/98
- 01 Mar 2023 Bug Prioritization - What are the 5 levels of priority? 27/247
- 31 Oct 2025 The True ROI of Software Development Outsourcing for Tech Startups 26/101
- 03 Jan 2023 IT Outsourcing Costs: Is outsourcing really cost-effective? 26/231
- 03 Jan 2023 Organizing your agile teams? Think about M.A.T (Mastery, Autonomy, Purpose) 26/405
- 02 Mar 2021 Estimate the Cost of Software Development 26/360
- 11 Mar 2023 Common Pain Points in Software Development Outsourcing 26/277
- 16 Dec 2021 Why outsource Python development of your project? 26/510
- 22 Mar 2022 8 Mistakes Marketing Agencies or Consulting Firms Make When Outsourcing Web Development 25/364
- 19 Oct 2020 The hidden costs of outsourcing software development 25/476
- 16 Oct 2024 Building a Software Outsourcing Startup: Strategy Through Two Canvases 25/56
- 23 Jun 2024 Best Practices for Managing Project Escalations 25/225
- 05 Jun 2023 Fractional, Part-Time (virtual) or Interim CTO: Who Will Cover Your Business Needs? 24/160
- 26 Sep 2024 Successful Project Management Techniques You Need to Look Out For 24/414
- 10 Dec 2023 Pain points of User Acceptance Testing (UAT) 24/472
- 11 Jan 2024 What are the Benefits and Limitations of Augmented Intelligence? 24/497
- 03 Nov 2021 7 phases of Odoo Implementation and Development: Can they be outsourced? 24/428
- 19 Mar 2021 Selective Outsourcing of IT Functions - a new trend in business outsourcing 24/562
- 08 Oct 2022 KPI - The New Leadership 24/616
- 10 May 2021 What are things you should look for in a good IT outsourcing company? 24/453
- 14 Dec 2021 The Top 10 Problems with Outsourcing Implementation and How to Solve Them 23/416
- 04 Oct 2022 Which ERP implementation strategy is right for your business? 23/339
- 12 Jan 2023 Top 10 Trustworthy IT Outsourcing Companies in Vietnam 23/300
- 18 Oct 2021 Key Elements to Ramping Up a Large Team 23/1236
- 28 Dec 2021 8 types of pricing models in software development outsourcing 23/454
- 28 Oct 2022 Build Operate Transfer (B.O.T) Model in Software Outsourcing 23/419
- 10 Apr 2024 The Parking Lot Method: Unlocking a Simple Secret to Supercharge Your Productivity 23/506
- 07 Nov 2024 Outsourcing Crisis Looming: Will Trump's Policies Transform the Global IT Landscape? 23/192
- 01 Jun 2025 10 Sustainable & Unique IT Outsourcing Companies in Vietnam 22/97
- 05 Jan 2024 Easy ASANA tips & tricks for you and your team 22/217
- 23 Sep 2021 INFOGRAPHIC: Top 9 Software Outsourcing Mistakes 22/444
- 15 Aug 2021 TIGO Rate Formula - Things the partners should know 22/509
- 13 Jan 2020 Quiz: Test your understanding project cost management 22/635
- 01 Sep 2019 Outsourcing Software To Vietnam: Facts, benefits and limitations 22/469
- 10 Nov 2022 Poor Code Indicators and How to Improve Your Code? 22/238
- 03 Nov 2022 Top questions and answers you must know before ask for software outsourcing 22/303
- 17 Feb 2022 Prioritizing Software Requirements with Kano Analysis 22/325
- 12 Dec 2021 Zero Sum Games Agile vs. Waterfall Project Management Methods 22/429
- 09 May 2022 Build one to throw away vs Second-system effect: What are differences? 21/331
- 28 Jul 2022 POC, Prototypes, Pilots and MVP: What Are the Differences? 21/732
- 19 Oct 2021 Is gold plating good or bad in project management? 21/839
- 09 Jan 2021 How can outsourcing enable business agility? 21/210
- 17 Oct 2021 Does Fast Tracking increase project cost? 21/387
- 05 Mar 2021 How do you minimize risks when you outsource software development? 21/341
- 01 Jan 2024 Software Outsourcing Questions for 2024 21/170
- 25 Sep 2025 A Practical Guide to Secure Online Work for Outsourced Teams 20/105
- 07 Dec 2023 12 project management myths to avoid 20/206
- 02 Nov 2022 Difference between Change Management and Project Management 20/244
- 01 Jan 2023 Top 5 IT outsourcing countries in 2023 20/287
- 13 Oct 2021 Why Outsourcing Software Development Services Is Gaining Traction With Non-Technical Leaders? 20/327
- 14 Jun 2022 Example and Excel template of a RACI chart in Software Development 20/848
- 20 Jul 2022 Software Myths and Realities 20/926
- 08 Aug 2021 Why Nearshore Software Development is better than In-House Development? 20/211
- 10 May 2021 Project Audit and Second Opinion Services 20/264
- 16 Feb 2026 Education App Development Cost in 2026: Benchmarks and Key Cost Drivers 20/46
- 18 Feb 2026 "Hit and Run" Project Management: Balancing Speed with Sustainability 20/32
- 02 May 2021 Outsourcing Software Development: Avoid 8 Mistakes 19/123
- 22 May 2022 What are common mistakes that new or inexperienced managers make? 19/296
- 01 Oct 2022 Vietnam is a favorite supply of IT outsourcing services to Japan 19/253
- 04 Jan 2021 VIETNAM AS A BIG ATTRACTIVE DESTINATION IN THE FIELD OF OUTSOURCING 19/326
- 01 Jan 2023 Why is Vietnam the Top IT Outsourcing Destination of 2023? 19/252
- 19 Apr 2021 7 Most Common Time-Wasters For Software Development 19/561
- 28 Oct 2022 Expect the unexpected in 2023 - How Outsourcing Can Help? 19/218
- 24 Nov 2023 The project management paradox: Achieving MORE by doing LESS 19/236
- 06 Mar 2024 [SemRush] What Are LSI Keywords & Why They Don‘t Matter 19/197
- 06 Jun 2022 Change Management at the Project Level 18/320
- 01 Jan 2023 Software Development Outsourcing Trends to Watch Out for in 2023 18/334
- 16 Mar 2021 Outsource Data Engineering Services - TIGO Streamlined Solutions 18/265
- 27 Jan 2020 Should a project manager push developers to work more hours due to mistakes of manager schedule setting? 18/446
- 02 Dec 2021 3 Ways to Avoid Scope Creep in IT Consulting 18/221
- 25 Nov 2021 Low-Cost Software Development: Buy Nice or Buy Twice? 18/357
- 21 Aug 2022 Forbes: IT Outsourcing Hotspot: Vietnam, A Small But Mighty Powerhouse 17/269
- 13 Jan 2023 What are the Hourly Rates in Offshore Software Development? 17/252
- 18 Jul 2021 How To Ramp Up An Offshore Software Development Team Quickly 17/601
- 31 Oct 2021 Tips to Fail Fast With Outsourcing 17/400
- 15 Nov 2023 IT Staff Augmentation Types and the Best Choice for Your Business 17/207
- 01 Jan 2024 12 reasons for software development outsourcing 17/183
- 26 Dec 2023 Improving Meeting Effectiveness Through the Six Thinking Hats 17/274
- 01 Jan 2024 Tech Partnerships: Choosing the Right Software Outsourcing Firm in Vietnam 17/188
- 12 Mar 2024 How do you create FOMO in software prospects? 16/181
- 01 May 2023 Streamline Your Business with Outsourcing 16/207
- 01 Dec 2023 Laws of Project Management 16/320
- 06 Oct 2021 Intellectual property issues with outsourcing software development 16/397
- 08 Feb 2022 Software Development: Fixed Cost or Opportunity Cost? 16/476
- 02 Nov 2023 What are the pros and cons of iIT outsourcing? 15/202
- 30 Nov 2023 Project Managers, Focus on Outcomes — Not Deliverables 15/173
- 10 Jan 2024 Facts Chart: Reasons for outsourcing 15/165
- 17 Jan 2024 What are the benefits and challenges of using multi-sourcing or single-sourcing strategies? 15/201
- 01 Feb 2023 [InfoWorld] Is your outsourcer agile enough? 15/206
- 01 Aug 2022 Is planning "set it and forget it" or "set it and check it"? 15/292
- 01 Apr 2021 IT Outsourcing to vietnam: Why It Is A Good Choice? 14/307
- 10 Mar 2021 The 7 Biggest Mistakes to Avoid Before Outsourcing a Web Development Project 14/246
- 17 Oct 2020 How Outsourcing can Improve Time Management for Better Business 14/284
- 06 Nov 2019 How to Access Software Project Size? 13/259
- 01 Jan 2023 Top Software Development Challenges in 2023 13/314
- 12 Aug 2024 Understanding Google Analytics in Mumbai: A Beginner's Guide 13/106
- 01 Mar 2024 10 Project Management Myths 13/156
- 14 Mar 2024 Why should you opt for software localization from a professional agency? 13/149
- 02 Jun 2024 Reviving Ancient Wisdom: The Spiritual Side of Project Management 12/245
- 01 Jan 2024 What The World Is Flat Means to IT Outsourcing 12/178
- 08 Jan 2024 Outsourcing on an As-Needed Basis 11/168
- 12 Oct 2021 Vietnam outsourcing path - the silk road connecting ASEAN with the developed countries (EU, US, Japan...) 11/309
- 15 May 2022 20 Common Mistakes Made by New or Inexperienced Project Managers 10/290
- 21 Oct 2022 Outsourcing Billable Rate 10/274
- 01 Jan 2024 Hiring Tech Talents in Asia: An Overview of Skills, Costs, and Potential 10/168
- 10 May 2022 Levels of Teamwork 9/202
- 21 Jun 2024 Dead Horses and the Escalation of Commitment 8/145
- 01 May 2024 Warren Buffett’s Golden Rule for Digital Transformation: Avoiding Tech Overload 7/211
- 31 Dec 2021 Outsourcing Software Development to mitigate the impact of COVID-19 4/323
Apparently, cognitive bias is a good thing, as it’s kept us alive for thousands of years. Making decisions based on previous experience can carry some prejudices, but it seems to have worked so far and saved us from dangerous situations, be it a wild beast attack or taking a shortcut. However, is being biased recommendable when it comes to software development?
We’ll get to the bottom of this by listing the most common biases in the software development cycle while trying to understand them. So, let’s get started!
The anchoring bias
We’ve probably all fallen prey to the anchoring bias traps. This happens when we face a situation in which we may overlook the “real” situation based on our previous experience with similar situations. It takes a shorter or longer time to realize the (serious) consequences.
For example, let’s say you’re negotiating a deal with a reputable outsourcing company. They offer you one price for an expert team and their services, yet you find it too high. As a replacement, they offer you another team with a negligently smaller scope of services and a slightly lower price. Judging from your previous experience, this seems like a bargain — you’re still getting what you want at a lower price.
However, once you sign the contract, you realize that maybe you’ve overpaid them for the services. The only reason you hadn’t noticed that before was that you first rejected a more costly offer! This one is still pretty expensive, but it seemed like the next best thing at the time. Well, perhaps you should’ve skipped that deal altogether.
Anchoring bias examples abound as they aren’t focused solely on the above decisions. You may give orders to your in-house team based on previous experiences. Yet, if the times have changed too much, you may get stuck in the middle of the development process.
To avoid the anchoring bias, you can do a couple of things:
- Get down to terms that you or other decision-makers in your team are prone to the anchoring bias. Once you acknowledge that fact, it will be easier to recognize and deal with.
- Don’t rush with your software development outsourcing decisions. Take some time and consult with the managers or developers about outsourcing.
- Try to think how you would act if you didn’t use your anchor as an argument for or against outsourcing.
Sunk cost biases
One of the hardest-to-beat biases is the sunk cost bias. That’s because it’s difficult to recognize and even more challenging to deal with. What’s worse, it can appear at any time during the software development life cycle.
In an outsourcing context, the sunk cost bias happens when you continue investing in the outsourcing team despite having negative outcomes over and over. You keep spending on outsourcing tools that clearly aren’t working for you, yet you think the circumstances are going to change (no, they won’t) or the outsourcing team behind it will be different (not unless you break the contract).
This type of bias can become very serious since it can push you into making one costly mistake after another. So, what can and should you do?
- First of all, acknowledge the error. Admit that you’ve already made a mistake and don’t want to make a new one by investing more money.
- Inform your team members about this kind of bias and try to encourage different perspectives.
- Rotate your team. It’s a good idea for team members to have different responsibilities at different times. That way, they won’t be inclined to keep pushing the wrong outsourcing strategy.
- Ask for advice about the outsourcing issue from someone without much experience with it. They may provide you with a fresh perspective.
The status quo bias
Maybe this scenario sounds familiar to you: you’re pretty much content with outsourcing your software development to one popular company, so much so that you don’t want to look any further or enquire about other alternatives.
If that rings a bell, you’re probably dealing with a well-hidden status quo bias.The status quo cognitive bias can get very tricky since it doesn’t clearly point out that you’ve got a problem with outsourcing your business. If anything, things are going pretty great.
The problem is, you shouldn’t just stick to one good old outsourcing partner but explore the vast market. The business process outsourcing services industry is currently worth $67.6 billion, and it’s constantly expanding. In other words, outsourcing is highly competitive, and companies continually update and develop their teams and services. You should always be on the lookout for a new outsourcing company or expert, while feeling free to negotiate better deals or ask for new tools or services for your project.
Naturally, one of the biggest challenges with ending the status quo bias is having proper evaluation techniques. You can achieve that by working closely with your team and imagining exaggerating costs. Would the engagement still work for you if it were pricier? If yes, then you’re probably on the right path.
Final words
Perhaps the above prejudices weren’t exactly what you expected, as we haven’t mentioned the situations when one thinks outsourcing is always the cheaper option or that certain countries have better outsourcing teams than others. Still, these are nothing but examples of the above bias types (anchoring bias in particular).
Our main aim is for you to identify these processes or trains of thought. Once you realize the hidden mechanics between your business decisions, you’ll be able to apply them not only to software development outsourcing but also to other projects and actions.
Explore more on these topics
Guest Blogging: The Definitive Guide
Top Trending Topics
Share This
Link copied!
Recently Updated News