Top 5 Software Development Challenges and Suggested Solutions

Top software development challenges facing tech companies

What software development challenges are facing tech companies?

Nowadays, not only start-ups but tech giants are facing many software development challenges. After 6 years of developing hundreds of software products, we can tell you that the most common issues in software development are not as clear and visible as broken code.

Today, we will share with you top 5 challenges in software development that most tech companies have to face:

  • Human-related issues
  • Project estimation
  • Technology 
  • Quality issues 
  • Security

1. Human-related challenges in software development

“I am convinced that nothing we do is more important than hiring and developing people.

At the end of the day, you bet on people, not on strategies.”

— Lawrence Bossidy, retired CEO of Honeywell.

The biggest problems in software development, or even in whatever situations in any corporation, are often from “humans”. In case we are lacking the “right people”, we struggle with the setting, planning, executing, fixing, and realizing our goals. 

Now, let’s dig deeper into the common problems in software development from the human aspect.

High software development labor cost

If you have experience in the IT industry, you probably have known that the costs for software development labor are significantly higher than that in many other fields. Take the U.S. for example, the average salary of a software development team provided by Glassdoor is as following:

Software development challenges - Average software development salary in the U.S.
The average salary for a software development team in the U.S.

From the table, we can see that it’s around 2x higher than the average annual salary in the U.S. which is $53,290. Not to mention the time-consuming recruitment process and many employers have to raise employee compensation for competitiveness in the tech talent war. 

Solution: As hiring new software development team is expensive in terms of salary and recruitment costs, we recommend you:

  • Applying employee referral programs and see if it offers you cheaper labor costs.
  • Considering outsourcing software development. Deloitte 2020 global outsourcing survey shows that 70% of outsourcing companies outsource because of cost reduction benefits.

Software development talent shortage

The tech talent shortage has been a headache for tech companies for years. More than 50% of CEOs are showing concern over tech talent shortage. At the same time, following Talentlms survey, the “Great resignation” is threatening the IT industry with 72% of tech workers thinking of leaving their jobs in the next 12 months.

Lacking IT talent is considered a significant problem in software development, which results in lacking resources for current software solutions, and further, creates adoption barriers to 64% of emerging technologies, according to a Gartner report.

Solutions: Apart from the employee referral programs, Passive tech talent can be a great strategy for this. With 72% of potential candidates being passive job seekers, you can utilize them to increase your talent pool.

Poor communication & conflict arising

“The single biggest problem in communication is the illusion that it has taken place.”

 –  George Bernard Shaw

Software development requires clear and constant communication. Various stakeholders participate in different phases to get the software finished, resulting in lots of information needed to be conveyed. 

There’s more. Conflict can arise within your software development team. E.g. PO disagrees with tech lead about the outcome, developers argue with testers about code issues. These conflicts are nothing but slowing down the process and decreasing software quality.

Solution: A basic but useful strategy for this is to set up effective communication channels and schedule regular meetings if needed to make things clear. 

2. Project estimation challenges in software development

Project estimation, including effort estimation, time estimation, and budget estimation are common problems in software development not only for new but experienced software developers. 

Why? Because the software development process consists of many phases – product planning, development, testing, deploying, etc. – with various tech workers engaged, thus requiring a clear and detailed product plan at the beginning to predict the effort. Not to mention the fast-evolving technology nature may ask you to adjust your plan along the way.

That you can’t be uncertain about your product plan makes up a challenge in software development. Otherwise, estimates may go wrong and unwanted situations come in, such as:

  • Wrong timeline estimation can lead to pressure and low-quality software as dealing with tie deadlines is one of the biggest challenges for software developers. 
  • Mis-calculated budget and you realize that you don’t want to spend that much on this product or development costs will exceed its commercial benefits.


  • A clear product plan is key to solving software development estimation challenges. You can also refer to similar previous products to estimate the effort. 
  • Task splitting – Break it into smaller tasks according to each development phase for easier calculating. 

3. Technology challenges – Keeping pace with innovation

Technical challenges in software development are not a new concept. “Technology” is something that evolves over days and hours, resulting in better efficiency and great user experiences that outdated technology can’t provide. Still, catering to the latest technology solutions requires lots of effort and skills.  

Digital transformation has been there for years but many companies are still struggling to deal with their old technology solutions, which can’t bring them the wanted product efficiency, security level, and user satisfaction. 


Using internal resources:

  • Constantly update and train your IT team about new technologies.
  • Hiring new tech talents for new technologies.
  • Think long-term: Stay ahead of the crowd, think of what technologies you will need or will be the trend in the next few years, and prepare for them.

Or, outsourcing to a trusted IT vendor to access industry experts.

4. Quality challenges in software development

After developing hundreds of software products, we can say that quality assurance is one of the key issues in software development. There are noticeable quality issues like bugs and broken codes that you can detect and fix right away. But hidden issues like premature optimization and poor software quality can lead to long-term impact. 

Bugs and broken codes

These software development issues often result from lacking domain knowledge, technical expertise, and effort. The first two aspects are pretty obvious but the effort aspect seems diversified. What does it include?

That a developer checks in code without enough reviewing and testing is an obvious cause for code issues. What’s else? Aggressively working under unrealistic deadlines increases the chances of overlooking small aspects. Or the project wasn’t appropriately scoped at the beginning and QA tasks are under-scoping. 

Solutions: One step to avoid this problem is to determine important tasks and plan things realistically. We recommend breaking the process down into small and achievable milestones and keep checking if everything is on the right track. 

Premature optimization

Premature optimization means a developer spending effort on optimizing a piece of code for faster speed, although they’re not sure if the code will be needed, understandable, or well interoperable with the whole system.

Premature optimization not only consumes your time and energy but also slows down the development process, particularly when your team is unstable, people come and go, and new engineers can’t decipher existing code. 


  • Developers should ask themselves: What are the reasons, costs, benefits, potential risks, and opportunities costs of optimizing?
  • Set strong code reviewing processes to ensure the code is readable, usable, and interoperable.

Poor software quality

Poor software quality can be seen as a hidden risk in software development as it’s not as obvious as bugs but can stifle business growth during operation. Various functional and non-functional attributes make up software quality, featuring performance efficiency, functional suitability, operability, compatibility, maintainability, security, etc. 

The root causes of software quality issues are mainly various “shortages”: talent shortage, experience deficiency, knowledge gaps, technology shortage, and resource constraints. 

Solutions: As the root causes of poor quality are also significant problems for a corporation and not easy to solve, we recommend you:

  • Invest in a solid in-house IT team if considering software development a core and long-term business.
  • Otherwise, outsource software development to a trusted outsourcing vendor.

5. Security

Last but not least, security is also a major concern in software development, featuring cybersecurity and data leakage. 


Cybersecurity refers to the ability to defend against attacks in the internet space, typically caused by poor programmers. Unstable cybersecurity can lead to systems infected, disclosed, damaged, etc., and affect the organization’s tangible and intangible assets. As a result, cybersecurity challenges are a constant worry of any software developer.

Data leakage

Data leakage is unauthorized transmission of project’s data to external parties, intentionally or unintentionally. Its consequences range from cyberattacks, financial damage and affecting enterprise’s competitiveness to risk of legal issues regarding third-party information breaches. 

Solutions: You can implement several steps to avoid security risks, such as:

  • Raising developers’ awareness of cybersecurity and information security to promote them in producing secure code. 
  • Having strong quality assurance processes to ensure system security. 
  • Categorizing data into shareable and unshareable types and training employees on protecting data during work.
  • Encrypting data in both motion and at rest to prevent data leaks.

Tell us your problems

Above are the most common software development challenges that tech companies are facing. Despite numerous kinds of problems, the root cause of issues in software development is like anything else – it’s human. Having the right people with the right resources will help organizations overcome any problems and seize new opportunities. 

Are you facing custom software development challenges and need further detailed solutions to these? Don’t hesitate to contact us if you need consultation for the next steps.

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