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10 Essential Tips to Remember when Outsourcing Software Development


Today, many business operations are automated. Others are managed through mobile or web applications or business software. And many businesses offer mobile apps or desktop softwares to their customers. These things make software development a crucial part of many businesses. Efficient IT solutions are beneficial in many ways. They increase productivity and help enterprises save costs in the long run. 

However, recruiting an in-house software development team is often very costly, which may not be practical for many businesses. In that case, outsourcing software development is a better option. Nonetheless, many companies are concerned about taking the leap to outsource software development projects due to technical risks, financial risks, cultural difference, or language barriers

In this article, we will share some valuable tips to follow when selecting software development outsourcing partners. These will help you get more projects done successfully!

Determine Which Type of Outsourcing Is Right for Your Business 

The right outsourcing partner can help you build your business’s competitive edge and set it up for long-term success. Software development outsourcing comes in many shapes and sizes, so before you undertake the endeavor, you will need to decide which service offering will best help you achieve your outsourcing goals. You can start by studying which pricing model is more suitable: project-based or hourly.  

After deciding on a pricing model, carefully evaluate the types of outsourcing available, such as staff augmentation outsourcing, managed team outsourcing, nearshore, onshore or offshore outsourcing, before making a decision. For more information about the differences between nearshore and offshore outsourcing, see here.

If you’re concerned that your outsourced team won’t be able to align with your company culture, nearshoring might be right for you. Asking questions like “how close are we, culturally?” and “how well do you speak English (or your language of business)?” won’t hurt. But it’s best to do your own research, because a potential outsourcing partner might feel the urge to stretch the truth. Here’s a good resource for assessing regional English proficiency.

Vet The Record and Experience of The Company 

Before committing yourself to a software development outsourcing partner, you have to be sure about its capabilities to deliver the results. Hence, you need to perform due diligence on your side by checking the company’s background. Their previous services provided to other enterprises will give you insight into what they can actually deliver. 

Request starting with a test software development project. You can then decide whether or not to proceed with working with them based on their project performance. 

These are several criteria to consider when assessing the company through the test project.

  • Expertise level: One of the advantages of outsourcing is accessing a high level of expertise that your in-house team does not presently possess. Through the test project, you will be able to evaluate the company’s expertise adequately. 
  • Reliability: You can gauge the company’s trustworthiness based on its openness about its processes and delivering what it has promised. 
  • Time Handling: Does your outsourcing partner manage to adhere to the project timeline and deliver on time? This is one of the most important factors to consider.  

Set Realistic Milestones and Goals

Establishing milestones and goals is key to measuring outsourcing success, but it’s also standard practice. Clearly defined and realistic milestones should be set for the project’s total lifecycle to enable you to track KPIs, control the budget, and keep an eye on the overall progress. 

Also, milestones allow you to evaluate the various functional parts of your application and identify potential issues, which helps you and your outsourcing partner solve problems proactively and systematically.

Communicate Effectively and Consistently 

Communication can make or break your outsourcing project. It’s not hyperbole. Lack of understanding between parties involved is the most common failure for outsourcing projects. Good communication is even more critical if your software development team is offsite or offshore. 

Some typical communication challenges include: 

  • Time Zone Differences: When your outsourcing software development partner is in a different time zone, it’s hard to communicate anytime you want. 
  • Language Barriers: When you and the outsourced team have different native languages, miscommunication is more likely to happen, leading to misunderstandings, mistakes, and errors. 

To prevent communication fumbles, make sure you choose an outsourcing partner with whom you are able to communicate well. Establish communication channels early on to ensure both parties can reach one another easily. Use project management tools such as Trello or Asana to keep track of the work in progress. For team chat, try Slack or Flock. Make sure to do regular check-ins and give constructive feedback to your outsourcing partner, and provide sufficient time for them to perform amendments.

Consider Nearshoring 

Sometimes it’s helpful when your outsourcing partners share similar etiquette, style of communication, and even a similar time zone. And this is when nearshore software development outsourcing comes into play. The nearshore engagement model has the best of both worlds between onshore and offshore development and can save a lot of money.

Some of the major benefits of nearshore outsourcing are that your outsourcing partner is located in a neighboring country or one with a similar time zone, which means there’s a reasonable cross-over period during the working day where teams can get in touch with each other. It’s often possible to partner with companies that are in the same time zone, too. Another added benefit is cultural similarities and local language skills, which help smoothen the collaborative process. Many US-based employers are looking for outsourcing destinations closer to home, particularly in the LATAM region

Protect Your Intellectual Property Rights 

Safeguarding your company’s intellectual property rights from misuse and theft is one of the trickiest legal parts of software development outsourcing. The intellectual property rights include patents, trade secrets, copyrights, trademarks, etc. Many companies avoid sharing critical information with their outsourcing partner for fear of leaking sensitive data or having their ideas stolen. 

To protect your company’s intellectual property rights, engage legal professionals to draft software development contracts and non-disclosure agreements. Make sure you own all intellectual property rights in the software program/application created by the partner throughout the outsourcing relationship. You can review the US Patent and Trademark Office’s regulations for any queries about intellectual property rights protection and how to handle potential infringement.

Actively Participate in The Process 

An outsourcing partnership means having a partner, a helping hand to help you through your software development journeypointing you down the path to achieving your goals. And in order for the partnership to work seamlessly and effectively, you should actively participate in the development process. A detached and hands-off approach can derail your team.

Consider hiring a dedicated project manager to oversee projects. A project manager can help set and push deadlines and evaluate milestones on a regular basis. They can also review the project budget periodically to make sure there’s no overrun and analyze and isolate the risks to minimize the possibility of a breakdown. 

Set A Clear Budget for Your Project 

The budget is typically the most crucial aspect that affects outsourcing decisions. A best practice is to develop a total project budget as early as possible. Then your outsourcing partner can tender a proposal on what they can offer you in terms of product technologies, functionalities, and post-deployment support.

Shop around and negotiate with your potential outsourcing partner for the best deal that is fair for both parties. But do keep in mind that the more you are willing to invest, the better quality your partnership can be

Discuss Post-Development or Post-Deployment Support 

A good software development outsourcing company should offer continuous post-development technical support for a specific period of time to help you mitigate potential issues. No matter how flawless a product you receive is, it will still need regular updates and maintenance to keep things running as smoothly as possible during its lifetime.

Have a discussion early on about the scope of the potential outsourcing partner’s post-development support. The support can range from calls and emails to training your employees in solving issues that might arise in the future. You can also add this requirement explicitly in the outsourcing contract to guarantee you’ll be able to receive the support needed. 

Maintaining a good relationship with your outsourcing partner is always a good idea. Anytime you need assistance with updating or maintaining the software or application in the future, you don’t want it to feel like a reboot. 

Build a System and Maintain Documentation

It will help your development process tremendously if you build a system to manage your outsourcing team. The system’s primary function is to maintain all the team activity logs and communications. As a business owner, you’ll be aware of all the daily, weekly, and monthly updates and reports about the development progress of your software.

The system should consist of a reporting schedule to follow your outsourcing team’s progress and provide timely feedback. It should also include a practical approach to project documentation to avoid confusion and unnecessary time drains. A practical documentation approach helps preserve records and knowledge about critical development decisions for future reference, as well as keeps your project on-budget and on-time.

Time to Expand Your Team?

Finding a suitable software development outsourcing partner is not a walk in the park, and it might take you a while before finding the one that suits your needs perfectly. By using these tips, you should be able to expedite finding your perfect match.

If you are thinking of outsourcing your software development, contact us here at WeDevelop. We are a software development company that helps businesses hire dedicated teams and augment their staff, so businesses can focus on their core functions.

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