Expert Interview With Michael McAuliffe: The 15 Biggest Risks for Failure in Software Development

Most software outsourcing stories begin with optimism. A stretched product team signs a contract, presents a new partner to leadership, and expects relief. 

Industry research from CISQ estimates that poor software quality cost the U.S. economy at least $2.41 trillion in 2022, which includes failed projects, outages, and security incidents. 

To unpack why so many engagements break down, we sat down with Michael McAuliffe, Senior Client Partner at Euvic US. Michael has spent decades working with technology and tech-enabled companies that rely on outsourced, nearshore, and offshore engineering teams.

He has advised C-level leaders on how to plan, source, and manage global capacity while still hitting product and revenue goals.

In this article, we’ll walk through the structured 15-point outsourcing risk assessment that some of our senior client partners use to ensure seamless software delivery.

Why Most Software Development Partnerships Fall Short

Most failed software partnerships do not collapse because of weak code. They fall apart because the relationship started on vague terms. (See how we do things differently at Euvic with our Product Solutions Manager framework)

A referral looked promising. A rate card seemed attractive. A pitch sounded convincing. 

No one stopped to ask whether both teams shared the same picture of success.

Michael McAuliffe, Senior Client Partner at Euvic US, has spent decades evaluating what makes high-functioning software teams with outsourced, nearshore, and offshore models successful.

Michael has advised technology and tech-enabled firms on how to plan, source, and manage global engineering capacity. He’s also been in leadership positions at outsourcing advisory and delivery firms, where he worked closely with C-level leaders under pressure to ship reliable software and control cost.

That background exposed him to a pattern of failure he recognized again and again.

Michael turned those patterns into a simple 15-point risk assessment that he now uses in early conversations with prospective clients.

Let’s walk through that assessment together and explore how you can implement it into your vetting process for software partners.

If you are still weighing where to build your next team, our comparison of LATAM vs. Eastern Europe for software outsourcing breaks down cost, retention, and security tradeoffs.

One of the big concerns with global outsourcing is that over 70% of the engagements fail, and it’s a very, very high rate. Why is that the case? It usually comes down to two factors: how you find the group and how you engage the group."

Michael McAuliffe

Senior Client Partner

How The 15-Point Risk Assessment Works

The assessment looks at three core areas that shape every outsourced relationship:

• Business
• Management
• Technology

At Euvic, our senior partners conduct sessions with small groups (typically a sponsor, a product leader, an engineering leader, and sometimes someone from operations or finance) who go line by line and score the likelihood or presence of risks with short comments that explain why the score landed where it did.

You and your team can apply the same structure when choosing software partners. Score your own situation first. Then use the results to guide questions for any software development company you invite into the process.

When you’re building software, it’s just not a technology problem in search of a technology solution. There are also business aspects that need to be considered and management aspects that need to be considered, as well as, of course, the technology issues."

Michael McAuliffe

Senior Client Partner

Category 1 - Business Risks: Are We Aligned On Outcomes?

Business risks focus on why the work matters. Strong engineering effort does not help if no one agrees on what success looks like or who cares about the final result. These five items shape the business case for any outsourced relationship.

Risk #1: Undefined Metrics

Many teams start with goals that sound like “launch the new platform” or “rebuild the app.” Those statements do not help anyone choose between tradeoffs, nor do they help a CFO decide whether the spend paid off.

Questions To Ask Yourself:

• What business outcomes do you expect from this work over the next 6–12 months?
• Which three to five metrics will you use to judge success?
• Can every senior leader describe those metrics in the same way?
• How will these metrics show up in your reports to the executive team or board?

How To Rate Yourself:

Give this risk a score from 1 to 5:

1. No shared metrics exist. Success is “launch the thing.”
2. A few metrics exist, yet they are vague or not shared widely.
3. Metrics exist and some leaders use them, but they are not central to decisions.
4. A clear set of metrics guides priorities, although they could be tighter.
5. Everyone can name the top metrics and uses them to make tradeoffs.

At Euvic, we ask each leader to describe success six to twelve months after launch in specific terms. The group then lists the three to five most important business measures. Any mismatch appears in real time. Together, we refine that list into a small, visible set of target metrics and connect them to the initial backlog and milestone plan.

Risk #2: Inconsistent Priorities

Some organizations never really decide what they want from a software partner. Every initiative sounds urgent. In reality, the team is spinning in circles with no clear direction.

Questions To Ask Yourself:

• Who sets priorities for this work on your side today?
• How often do you revisit and reset those priorities with all key leaders present?
• What happens when product, sales, and operations want different things at the same time?
• Which work items or themes would you cut first if budget or time shrank by thirty percent?

How To Rate Yourself:

Give this risk a score from 1 to 5:

1. Priorities change constantly and depend on who speaks loudest that week.
2. Some initiatives feel more important, yet there is no real agreement.
3. A loose priority order exists, but it gets overridden often.
4. There is a clear list of priorities and it usually guides decisions.
5. Priorities are written, shared, and used to make firm tradeoffs every sprint.

Risk #3: Unclear Stakeholders And Sponsors

Outsourced work stalls when no one owns it internally. Engineers can build features, but they cannot set direction, settle disputes, or defend budget. Without a clear sponsor and day-to-day owner, decisions drift and partners receive mixed signals.

Questions To Ask Yourself:

• Who owns this relationship inside your company today?
• Who sponsors the budget and defends it with senior leadership?
• Who has authority to make final calls on scope, timing, and tradeoffs?
• What is the plan if that person changes role or leaves the company?

How To Rate Yourself:

Give this risk a score from 1 to 5: 

1. No clear sponsor or owner. The relationship sits “between” teams.
2. A sponsor exists in name, yet decisions still require broad informal alignment.
3. A working sponsor and product owner exist, but their authority is limited.
4. A strong sponsor and empowered owner manage priorities and shield the team.
5. Sponsor, owner, and partner operate as a tight unit with crisp decision rights.

Risk #4: Vague Relationship Vision

Many outsourcing conversations stop at the first project. No one pauses to describe how the relationship should look in one or two years if things go well. That gap invites friction later, especially around ownership, communication patterns, and long-term planning.

Questions To Ask Yourself:

• How should this partnership look twelve to twenty-four months from now if it goes well?
• How integrated do you want the external team to be with your internal engineers and product staff?
• Do you view this as a single project, a multi-year relationship, or a stepping stone to a future model?
• Which aspects of the relationship matter most to you, such as continuity, communication habits, or time zone coverage?

How To Rate Yourself

Rate your current vision:

1. No stated vision. The engagement is “just a project.”
2. A loose idea exists, yet it has never been written down or shared broadly.
3. A rough vision has been discussed with some leaders, but not with the partner.
4. A shared multi-quarter vision exists and informs some planning.
5. Both sides work from a written relationship vision reviewed at least twice a year.

Risk #5: Misaligned Incentives And Contract Structure

Contracts that reward the wrong behavior damage even strong relationships. Hourly models can reward churn and overtime. Fixed-price contracts with weak scoping can reward cutting corners. Outcome-based models can push teams to chase numbers that do not match deeper goals.

Questions To Ask Yourself:

• How does your current partner earn more revenue from this engagement today?
• What behavior does the pricing and contract model encourage on both sides?
• Where do you carry the most risk right now, and where does your partner carry it?
• Which changes to the contract would give both sides a clearer path to shared outcomes?

How To Rate Yourself

Score this risk on a 1 to 5 scale:

1. Contract terms are unclear or rarely reviewed. No one connects them to outcomes.
2. The model is simple but rewards short-term activity more than long-term value.
3. Some incentives support the right behavior, yet gaps still cause friction.
4. Contract terms line up with key business goals, with a few improvements still open.
5. Both sides can explain how the model supports shared outcomes and healthy behavior.

End-to-End Services: See How We Can Help You Get Better Results.

6000+ Polish software developers and IT experts are ready to level up your business

Learn About Our Services

Category 2 - Management Risks: Can We Actually Run This Together?

Management risks cover how the work will be steered day to day. Even with a strong business case and sound technology, poor management habits drain momentum and trust. These five items look at planning, decision habits, communication, and how both sides respond when pressure rises.

If you feel stuck in “pick two” tradeoffs between scope, timeline, and budget, our article on the Iron Triangle in software development breaks down how to reset those constraints without lowering quality.

Risk #6: Weak Governance Rhythm

Many outsourced partnerships run on scattered meetings and ad hoc updates. People meet often, yet no one feels confident about scope, dates, or decisions.

Questions To Ask Yourself:

• What recurring meetings exist today around this work?
• Who attends those meetings and who actually decides?
• How often do you review scope, risks, and dependencies in a structured way?
• Where are decisions and action items recorded so no one loses the thread?

How To Rate Yourself: 

Give this risk a score from 1 to 5:

• Meetings are irregular and mostly reactive. No clear structure exists.
• Some recurring meetings exist, yet agendas and decisions are inconsistent.
• A basic rhythm exists, although many decisions still slip through the cracks.
• Governance meetings follow a pattern and usually produce clear actions.
• A consistent rhythm covers planning, delivery, and risk, with visible outcomes after each session.

Risk #7: Overloaded Product Ownership

A single product owner often carries roadmap, requirements, stakeholder alignment, and release decisions. That person becomes a bottleneck when the role is unclear or spread across several people.

Questions To Ask Yourself:

• Who owns the product vision and backlog today?
• How much of their week goes to this initiative compared with other duties?
• How quickly do they respond to questions from engineers or designers?
• What happens when that person is unavailable for a week or two?

How To Rate Yourself:

Score this risk on a 1 to 5 scale:

1. No clear product owner exists. Work arrives from many directions.
2. Someone carries the title, yet they have little time for the role.
3. A working product owner exists, although they often run at capacity.
4. A focused product owner spends consistent time with the team each week.
5. Product ownership is shared across a small, tight group with clear backup coverage.

Risk #8: Fragmented Communication Channels

Scattered tools and informal side chats erode alignment. Important decisions land in private messages or hallway conversations that never reach the full team.

Questions To Ask Yourself:

• Which tools do you use today for project communication and documentation?
• Where do final decisions live so anyone can find them later?
• How do new team members catch up on context for this work?
• How often do you see conflicting information in different channels?

How To Rate Yourself:

Give this risk a score from 1 to 5:

1. Communication sits in scattered tools with no clear source of truth.
2. One main tool exists, yet key decisions still hide in private chats.
3. People roughly know where to look, but history is incomplete or messy.
4. A primary channel and workspace hold most decisions and updates.
5. Everyone uses a small, agreed toolset with clear rules for how and where to communicate.

Risk #9: No Clear Escalation Path

Every project hits rough patches. What happens in the first forty-eight hours often defines the relationship more than the problem itself.

Questions To Ask Yourself:

• Who should the partner call first when they see a serious delivery or quality risk?
• Who steps in if that person is unavailable or part of the problem?
• How quickly do you expect a response to urgent concerns?
• What examples from past projects show how escalations actually played out?

How To Rate Yourself:

Score this risk from 1 to 5:

1. No one can describe an escalation path. Issues linger in the team.
2. Names exist, yet few people know them or feel comfortable using them.
3. Escalation works for major crises, yet smaller issues often stall.
4. A clear path exists, and teams use it without fear of blame.
5. Escalation paths and service levels are written, shared, and tested in real situations.

Risk #10: Poor Cross-Team Dependency Management

Outsourced teams rarely work in isolation. Their progress often depends on internal systems, third-party vendors, security reviews, or content that arrives from other departments.

Questions To Ask Yourself:

• Which internal or external groups must support this work for it to succeed?
• How far in advance do you plan their involvement and secure their time?
• Where do you track dependencies, owners, and dates in a single place?
• How often do you see surprises that trace back to another team’s schedule?

How To Rate Yourself:‍

Give this risk a score from 1 to 5:

1. Dependencies are handled informally. Surprises are common.
2. Some known dependencies exist on paper, yet no one reviews them often.
3. A basic list exists, although ownership and dates shift repeatedly.
4. Dependencies are tracked and reviewed in planning sessions, with named owners.
5. Cross-team dependencies are visible, updated, and tied to a shared release plan.

Category 3 - Technology Risks: Can The Stack Carry The Load?

Technology risks focus on whether the solution can stand up to real usage and change. Code quality matters, yet so do architecture choices, environments, and how teams handle security and operations. These five items look beyond features to the health of the technical foundation.

For teams that need a deeper primer, our solution architecture guide for SMBs and enterprises and system integration guide walk through patterns, methods, and real-world use cases.

Risk #11: Fragile Architecture And Design

Short-term feature demands often push teams toward quick fixes. Over time, those choices create an architecture that bends under pressure.

Questions To Ask Yourself:

• How clearly can your team describe the current architecture in simple diagrams?
• Where do people hesitate to make changes because of unknown side effects?
• How often do performance or reliability issues trace back to design choices?
• What plans exist to refactor or reshape major components over time?

How To Rate Yourself:

Score this risk from 1 to 5:

1. Architecture is unclear, undocumented, or understood by only one or two people.
2. Some diagrams exist, yet they are outdated or incomplete.
3. The main structure is known, though certain areas cause anxiety during change.
4. Architecture is documented and reviewed, with known hotspots and plans.
5. The team treats architecture as a living asset, with regular reviews and targeted improvements.

Risk #12: Immature DevOps And Release Practices

A strong team can still stumble if builds, tests, and releases are slow or unpredictable. Manual steps create human error and produce weekends filled with release drama.

Questions To Ask Yourself:

• How long does a typical change take to move from merge to production release?
• Which stages of your pipeline are automated and which ones depend on manual steps?
• How often do releases cause outages, rollbacks, or urgent patches?
• Where are build and deployment issues tracked, owned, and resolved?

How To Rate Yourself:

Give this risk a score of 1 to 5:

1. Releases are mostly manual and stressful. No standard pipeline exists.
2. Some automation exists, yet every release still feels risky.
3. A basic pipeline runs, although tests and monitoring lack depth.
4. Releases follow a repeatable pipeline with few surprises.
5. The pipeline supports frequent, low-stress releases with strong feedback loops.

Risk #13: Weak Quality Practices

Quality does not come from a single test phase. It comes from habits spread across design, coding, reviews, and testing.

Questions To Ask Yourself:

• Which types of testing are in place today, and who owns each layer?
• How early do testers or quality specialists engage with new features?
• How often do bugs repeat because root causes never receive attention?
• What metrics or patterns do you review to understand quality over time?

How To Rate Yourself:

Score this risk from 1 to 5:

1. Testing is mostly manual and happens late in the process.
2. Some automated tests exist, although coverage and ownership are unclear.
3. Quality practices exist, yet they vary strongly between teams or modules.
4. Clear quality practices and ownership exist across the lifecycle.
5. Quality is treated as a shared responsibility with strong automation and continuous improvement.

Risk #14: Fragile Environments And Infrastructure

Even the best code struggles in unstable environments. Slow, unreliable, or inconsistent infrastructure will hurt user experience and team morale.

Questions To Ask Yourself:

• How often do you see outages or environment incidents that block development or testing?
• How similar are lower environments to production in terms of configuration and data?
• Who owns environment stability and capacity planning?
• What monitoring exists today to spot issues before users complain?

How To Rate Yourself:

Give this risk a score from 1 to 5:

1. Environments often fail due to unclear ownership and slow recovery.
2. Some monitoring exists, yet many issues still surface through user reports.
3. Environments are mostly stable, although differences between them cause surprises.
4. Clear ownership, monitoring, and processes keep environments stable.
5. Environments are treated as product assets, with proactive care and continuous tuning.

Risk #15: Security And Compliance Gaps

Security often receives attention after a scare. In outsourced models, unclear responsibilities create dangerous blind spots.

Questions To Ask Yourself:

• Which security and compliance standards apply to this product or platform today?
• How are access rights granted, reviewed, and revoked for internal and external staff?
• Where are security responsibilities split between your team and your partner?
• How often do you review logs, incidents, and security posture with your partner?

How To Rate Yourself:

Score this risk from 1 to 5:

1. Security and compliance are discussed rarely and handled ad hoc.
2. Policies exist on paper, yet day-to-day practices lag behind.
3. Some controls work well, while others remain unclear or unmanaged.
4. Clear controls, reviews, and responsibilities exist and are followed.
5. Security and compliance are baked into planning, delivery, and regular joint reviews.

See Our Latest References and Client Case Studies!

Check out our portfolio of successful client cases from various industries and company sizes.

See Our Case Studies

Get In Touch With Your Perfect-Fit Software Development Team

You now have a clear lens for looking at software partners: fifteen specific risks across business, management, and technology. Score each area honestly and you will see where a partnership feels solid, where it wobbles, and what needs attention before you sign anything.

Your project deserves a perfect-fit team, not a hodgepodge of junior engineers.

That’s where Euvic US comes in. Our senior client partners use this assessment with sponsors, product leaders, and engineering teams to shape engagements before a single sprint starts.

Book a consultation with the Euvic US team to run the 15-point assessment on your roadmap and current software partners.

Learn more about Euvic US and our 6,000+ person organization with 100+ specialized team at a 92% client retention rate.

Review our case studies to see how our engineering teams have supported companies such as Swedbank, Ikea, and Deloitte in manufacturing, finance, retail, healthcare, and more.

Explore our services across custom software development, cloud, data, AI/ML, cybersecurity, and managed teams to understand where we plug into your organization.