Software Development Outsourcing – Thumb Rules From First-Hand Experience

Last updated on August 3rd, 2023 at 07:55 am

Summary: Do you often find yourself torn between focusing on your core business functions and solving the innumerable concerns of your in-house IT teams? The most common being hardware glitches and lagging internet access. Add to it a speck of additional facilities that you need to provide to your on-premise team.

Let me tell you, Outsourcing Software Development can be a swift solution to your entrepreneurial concerns. In case you are flinching at the thought of outsourcing software developers, you must know that the internet is filled with odd reviews because those enterprises were farsighted about their own projects or partnered with the wrong IT solution provider.

Trust my experience as a technocrat, outsourcing when done right, can prove to be a systematic disruption!

Let’s first describe Software Development Outsourcing for you. To put it in simple words, outsourcing is hiring an external team of experts to help you with your software development needs. In-house IT teams are often too caught up in maintenance of regular business processes to take up more load or at times do not possess specific skills sets required to develop a certain kind of software solution. That’s when enterprises generally consider outsourcing software developers.

A Businesswire forecast for 2020-2025 says that the global IT outsourcing market is estimated to reach USD 397.6 billion by 2025 with a CAGR of 4.5%. Modern enterprises are extremely dependent on innovative applications and with the advent of cloud services, IT outsourcing is more driven by the perspective of a competitive edge through amplified customer experience and seamless services. Also, COVID has laid bare the vulnerability of supply chains6 since most IT service organizations deal with mission-critical enterprises that require to boost the general efficacy of services.

Perks of Software Development Outsourcing

Deloitte’s Global Survey mentions that around 93% of its respondents already have, or are planning to adopt cloud solutions for outsourcing, which clearly means that all of these enterprises have a certain outsourcing strategy in place.

Consider hiring outsourced software developers for the following reasons:

1. Access to Global Talent Pool: While your in-house team has to be localised to serve the purpose, outsourcing opens to you the gate for a worldwide talentpool with a varied field of expertise.
2. Cost Optimization: While your internal teams require you to make investments on hardware, software and ancillary facilities, outsourcing software developers will require you to choose your model as per your requirement. Trust me, you save a lot!
3. Flexibility Quotient: Outsourcing models are extremely flexible and can easily scaled up and down from time to time. In case your project needs more time and resources, ask for more experts in the team. You will also have the flexibility to scale down when you down.
4. Global Reach: The right outsourcing partner will always train their resources as per global standards. With a team experienced in operating with the global metrics, it is often witnessed that enterprises too expand to the highly-grossing international markets and gain access to foreign stakeholders.

Should you outsource if you have the expertise?

You must have asked yourself this question an n number of times! The answer is yes, and no it is not weird. Say you are a tech company whose core functioning is to create, optimize and maintain software solutions, outsourcing is not what you would essentially consider, but you should.

1. If you are working on a strict time-budget and need to hasten a product’s time-to-market
2. If your in-house teams lack the required tech and design expertise
3. If your in-house team is extremely consumed in core business process and has no time for new projects
4. If you do not want to make a fresh full-time hire

You can always hire permanent staff if your engineering demands are going to increase permanently or can even consider hiring contractual developers on project basis; outsourcing will always be a wise choice for it will bring in speed, efficiency and flexibility.

Kinds of Outsourcing & Collaboration Models

Considering that you are giving software development outsourcing a thought, let’s give you a breakdown of the kinds of outsourcing you can choose from. The cheat key here is to be aware of the software development expenses in your region. Typically, software developers from the west come with hefty packages, so enterprises hailing from the west always look at outsourcing teams from the lesser developed nations.

You can take your pick from:

1. Onshoring – hiring developers from the same region
2. Offshoring- hiring developers from a country faraway
3. Nearshoring- hiring developers from a nearby country

Again, you must base your choice depending upon your location and the prevalent development costs.

Most of the software firms will offer you these models:

1. Fixed Price Contracts: The easiest and the most trickiest method allows you to fix a flat project fee and a delivery timeline. Although it makes budgeting easy, a lot of outsourcing firms lose on development time and rush to meet deadlines with a hurried approach. Something a good project manager can easily remedy!
2. Time & Material: The deal is fixed on the number of resources used or man hours employed and leaves the outsourcing firm with a lot of flexibility. The fixed time based fee can be a per-hour or a per-day one. However, ensure that you clearly define the scope of the project when opting for this model.

Thumb-rule of outsourcing: The Time & Material works best for projects using Agile methodology and the Fixed Price Model is best suited for waterfall. Also, chose Fixed Pricing in case of small scale projects.

How to choose the right outsourcing partner?

All software development companies have a niche. You need to select yours as per your core requirements. There are, however, certain basics on which you consider outsourcing firms. Let’s decode them for you:

1. Check out independent ratings: Look up potential outsourcing firms on B2B Ratings & Reviews and GoodFirms – Research & Reviews of IT Companies & Software

• Look up the overall rating
• Scan through the portfolio and case studies
• Consider their team expertise
• Check client reviews

2. Once you have shortlisted a few firms, take a closer look for:

• Their previous work – their work experience will speak volumes about the viability of their demands. Specifically, look for their development quality, scan their code quality through the git repository.
• Their technology and infrastructure – look at the range of services they offer, which will give you a clear picture of their infrastructure and abilities. You don’t want to be stuck with a partner who lacks the right resources.
• Their pricing structure – Software solutions are not single time deals. Your requirements are bound to change with time. The right outsourcing partner will provide you scalable software solutions but they will not come cheap. You won’t want to burn a hole in your pockets nor can you afford to go for an amateur. Quality comes with experience, be prepared to pay a balanced price for it.
• Their ability to customize solutions – Every business has different needs. You cannot copy the codes from a competitor’s framework and still expect to excel. Your outsourcing partner should, therefore, be adept at customizing software solutions to suit your business strategies.

Brief Your Outsourcing Partner

I can recall innumerable examples where software projects failed because of communication gaps. The key to a successful project is defining your scope and requirements in detail. Remember, there will always be a scope for miscommunication, but a right partner will take documentation seriously, form a transparent strategy and adhere to goals and milestones.

Define these points clearly:

• The purpose of the project and the vision behind it
• Clearly state the features you want to build
• Give them an idea about the target user base
• Explain how the software solution will benefit users
• List all dependencies, usability requirements and system requirements

Get your partner’s nod on:

• Assigning a one-point contact for development concerns
• Accessibility to language experts in case of offshore outsourcing
• Fix a regular update model to know about development progress
• Ensure your outsourcing partner incorporates feedbacks and new concepts (if you have opted for agile)
• Make sure your outsourcing partner conducts extensive testing & quality analysis