As technology advances at a breakneck pace and businesses become more competitive than ever, software outsourcing has become one of the most talked-about business strategies. Actually, more and more businesses are discovering that outsourcing is a valuable tool for avoiding operational minutiae and focusing on the most important aspects of their organization.
If you want to outsource a development project to a remote technical partner but do not know where to start, here’s a step-by-step guide.
What Is Outsourcing Software Development?
Outsourcing is the practice of delegating specific activities to an external vendor rather than using in-house resources. Software outsourcing, on the other hand, is the process of enlisting the help of a third party to develop software. Software application development is the most widely outsourced IT job in the tech industry. According to Statista, the revenue in the application outsourcing industry is expected to reach US$116.00 billion in 2022. By 2027, it is predicted to expand at a rate of 4.66 per cent per year, culminating in a market volume of US$145.70 billion.
Advantages Of Outsourcing Software Development Project
The most prevalent motivation for organizations to outsource development projects is the significant cost savings. In fact, cutting costs and maintaining under budget allows enterprises to grow and scale their businesses more effectively, as well as keep up with market demand.
Customers can work with the software agency “on-demand”, just when they need them. Unlike permanent employment, there is no legal requirement to maintain a long-term contract. As such, consumers have the flexibility to pay for outsourcing just when the project is being completed.
Providing a Targeted Approach
Hiring a dedicated software team opens up new possibilities as companies approach a variety of new and disruptive technologies such as Blockchain, Artificial Intelligence, etc. Furthermore, having immediate access to a huge pool of IT talent on a broad scale allows clients to complete projects quickly while focusing on their core skills.
Increased development speed
There is no need for extra time spent on training and onboarding because the software agency is already experienced in the technologies and tools required for the development process. This helps customers save a significant amount of time and speeds up the development process.
Disadvantages Of Outsourcing Software
Intellectual property and security problems
Data is a new asset in today’s world, and entrusting corporate data to a third-party software outsourcing vendor could put firms at risk. However, this danger can be easily mitigated by signing non-disclosure agreements (NDAs), which is now a common practice in such businesses.
Language and cultural barriers
Due to language and cultural hurdles, working with IT professionals in a remote location might be difficult at times. Furthermore, time zone variations might make firms unable to efficiently schedule discussions with the outsourcing team, posing a challenge to project progress updates.
Finding a software agency is hard but finding a qualified developer who can match your exact needs is much harder. In fact, the success of your project will primarily depend on its complexity. However, experienced IT software agencies can usually be accounted for that and assist with the selection of qualified expertise.
Control and manoeuvrability
For any manager, especially someone who craves control, working with a remote team can be difficult. In reality, not being able to directly oversee the development project’s staff makes it difficult to have complete visibility into the process, as well as to solve issues and provide support.
Weekly reports, skilled project management, right communication channels and processes reduce the risk of things becoming out of control.
Steps To Outsource A Bespoke software development project
Step 1: Define your objectives
Firstly, be clear about what you want your products to look like and discuss about business’s objectives internally, within your organization. One reliable technique to determine and define your goals is to use the SMART acronym (Specific, Measurable, Achievable, Realistic, and Time-bound). This is the most important step to bound the scope of your project.
Step 2: Evaluate your requirements
The objectives you specify will determine which outsourcing model is best for your company. Outsourcing is typically divided into two types: project-based and specialty models.
- Project-based: This type of outsourcing is contracted when a firm lacks the technical competence to complete the project so they decide to hire a specialized development team. In this case, the development agency is in charge of management and quality assurance.
- Specialty models: In this type, the firm client usually has a project manager or even an in-house software team. Outside specialists are hired to fill in certain gaps in the company’s knowledge for a certain period of time.
Step 3: Establish a budget and timeline
Setting deadlines and targets, as well as KPIs, will aid providers in putting together and sticking to sprints. As such, you will know the actual deployment date. Besides, you also need to determine your budget at this stage. In fact, the price will be based on the model of outsourcing (smaller budget – offshoring or nearshoring, larger budget – onshoring, or hybrid) as well as the number of developers.
Step 4: Look at outsourcing to other countries
The next stage is to look for countries with a strong outsourcing culture. Research companies and freelancing professionals that best meet your plans and budget. The location is one of the most crucial considerations. Additionally, pay attention to differences in culture, languages, hourly rates, time zones, etc to ensure smooth communication.
Step 5: Select a software services provider
After you have selected a few provider locations that fit your needs and budget, the following step is to assess them. Bespoke software services providers can be assessed by the following factors: their portfolio, the reviews from their previous clients, their team members, previous projects, etc. Make contact with 3-5 agencies that sound a good fit, schedule a meeting and debate your project requirements. You’re bound to have some favourites after the selection process, so go ahead and write them down. This allows you to assess their communication, culture, and proposals for your business task. The following checklist should be completed:
- 1: Make a list of companies to partner with on software development services
Research and establish a list of all potential partners who can deliver a dedicated software development team, then send out the request for proposal. As a result, you can check to see if the provider can meet your needs and expectations. Clutch.io is a good source of software agencies.
- 2: Ensure that you can communicate effectively with the outsourcing firm
Request a phone conversation or a meeting to learn more about their communication style and see if you’re a good fit. In fact, quality is improved via effective communication.
- 3: Inquire about previous clients’ references
Before hiring a dedicated software team, you can investigate the software outsourcing company’s reference portfolio and contact their previous clients.
- 4: Check vendor’s security and privacy policies
Check with the software agency to see how they protect your data. A competent vendor will usually have rigorous security standards in place to protect clients’ sensitive information.
- 5: Check vendor’s accreditation and certification
Verifying a software outsourcing company’s accreditation and certification is an important element of the vetting process since it ensures quality, security, and confidentiality.
- 6: Check vendor’s insurance for professional liability
Verify that the vendor is covered by professional liability insurance. This is because professional liability insurance can help protect your company from damages caused by errors or omissions.
Step 6: Sign a contract and get started on the development.
After considering all the factors above, you must have found the best-fit technical partner with the best software services. It is time to contact them, begin discussing terms in person or by video conference and structure the Statement of Work.
Advantages Of Partnering With Small Software Agencies
Here are the most important reasons why small software development organizations can be more successful technology partners than large ones.
1. Rapid work execution
Smaller businesses frequently offer greater flexibility while working and are significantly more proactive and collaborative with their customers.
2. Customized strategy
Small software development firms, which are more customer-oriented, are not known for producing large amounts of code. So, they can often step outside of the project and propose a better overall customized solution.
3. Reduction in the cost of high-quality resources
It is clear that top software development firms bill their clients not only for the work but also for their reputation. When working on a short project, partners will establish fewer goals but work harder.
4. Increased flexibility in the allocation of human resources
Boutique software development firms can approach resource projects with more dynamism and flexibility. They can shift developers from other projects to yours if necessary.
5. Top-level management engagement
When working with a small software development company, you may typically work directly with top management. As such, you will gain useful insight and insightful advice.
6. Specialization in-depth
Smaller software development companies can typically provide greater in-depth experience within their core technical and executive teams.
7. A stronger sense of accountability
Small businesses will give your project more attention and treat you with greater respect. Large organizations, on the other hand, are unlikely to view your project as an important or strategic account, and your project may be overlooked.
Outsourcing software development for your next project has numerous advantages. In fact, saving time and money is only the tip of the iceberg, there are various other advantages when you outsource a development project. Learning how to outsource software development is simple. However, you have to remember that outsourcing is not a shortcut in any manner. It still necessitates the same level of rigor and efficiency as software development in general. Additionally, it also needs a strong working relationship between the two parties.