November 13, 2020

How to Outsource Software Development. A Detailed Guide

how to outsource software development

When a company wants to create an application, or perhaps add new features and integrations to it, modernize existing design of the web app or website, finding out how to outsource software development is a natural way to go.

Collaboration with a remote software development team opens up new opportunities for retailers, allowing them to implement an omnichannel approach, where customers might purchase goods from the website or from an application, which is always at hand and connects the brand with its audience.

But first things should come first. Let’s initially find out what software development outsource means.

It denotes a process, in which an organization hires a third-party vendor to perform various software development projects. Businesses can hire top-quality technical experts from different countries: Quality Assurance Engineers, Project Managers, Front-End and Back-End Web Developers, UX/UI Designers, blockchain architecture experts, VR/AR developers, etc.

This approach turned out to be successful for major companies, as over the past few decades, software development outsource market reached the amount of 66 billion dollars in 2019. Now the growth is expected to reach 98 billion dollars in 2020-2024. Large corporations obtain a lot of benefits by working with professionals worldwide on a remote basis. That’s no wonder that so many companies worldwide are interested how to outsource software development.

Which software development outsource model to choose

While outsourcing means your project is handled by the staff that doesn’t directly work for your company, the way outsourcing services are provided might differ depending on the model you choose.

In general, we can distinct 3 different software outsourcing models. Keep reading to learn how they are different.

A dedicated team works on your project

This model lets the software development outsource team work on providing estimates for the project (like ETA and costs estimates). Besides, who knows better how long will it take to develop a feature or even an application, if not the team who does it on a regular basis and knows the drill?

where to outsource software development

Sometimes business owner or CTO is not well-versed in the specifics of a particular development process or technology implementation, so naturally it’s better to ask the oursource team to provide an estimate.

However, in order to make a secure decision, it is necessary to check if the estimate is set correctly.

Every team might have its own specifics of work and scope of technologies they use. Thus, the estimated time and price may vary.

A good practice is to contact several teams providing outsource services and ask for project estimation. Then you’ll be able to compare several offers and settle with the one you feel most satisfied with.

Another good thing you can do before signing a contract is to check how the outsource development team handles the development process, do they follow Agile methodologies, etc.

This will grant the correct delivery estimates and will provide a better understanding of the time spent on development and QA. The data will let you make an informed decision on how to outsource software development team in order for it to deal with your project.

Speaking of this model’s benefits, they are:

  • independence of the team’s decision, which leads to better product quality and a deeper involvement of the whole team into the work, as there are no limitations set by the client other than the estimates that are listed in an agreement;
  • in case you plan on creating a set of products and your business has the specifics that takes time to get to know, and are looking for a long-term relationship, this model will suit better, as it’s a perfect chance to let someone work on projects when he already knows the details of your business and can generate solutions that are best for your particular case;
  • in case you want your product to be maintained or scaled with time.

Project-based model for outsource development

The second model of work demands from the business owner or CTO to estimate the costs and set the deadlines. The client has to monitor the process of project development from the starting point, while a developer has full control over the project to a final stage. It is a project-based model.

In relation to a dedicated team, a price for a project will depend on the number of hours and involved team members. A project manager, for example, can communicate with the outsourced team and report failures to a client.

software development outsourcing

This model is a great solution in case you exactly know what’s needed, have already developed clear project requirements, and know how long it takes to perform the job.

It is also important to understand that the requirements should be attached to an agreement, and any changes to them should be previously discussed because this might affect the cost and time estimates making the project more complex than it was expected at the beginning.

Yet, it’s always better to change the requirements (even if it’s late and the work already has started) than to get something that won’t work as expected in the end.

The model based on staff augmentation

This means, an outsourcing partner builds himself a software development outsource team for a company, and he is responsible for the team’s productivity and the way they will handle the project.

However, CTO or project manager from the client’s side defines the responsibilities of every team member, and defines requirements and tasks. He doesn’t decide on how to outsource software development team, he only works with them side by side, generating ideas and looking into implementation.

software development team outsourcing

The most essential benefit of this model is that it allows flexibility and you’ll be able as a client to make changes in the project and see to it that in the end, you get exactly what you want.

The “nuts and bolts” of how to outsource software development team

When you know what outsource model you need, you start looking for the right people to do the job. Here is a problem: some companies provide outsource services, as well as there are lots of freelancers that can also handle outsourcing.

It’s always up to client, whether to choose individual specialists or turn to a company that has not only a vast portfolio but invaluable expertise as well.

When making this decision, you should check:

Portfolio of the company or studio which will work on your project

You have to like the designs created by the team. Also you might as well want to check the applications to see if they work smoothly, and is UX clear enough to you. If you don’t like the portfolio, it’s a good chance you won’t be satisfied with the results as well.

outsourcing models

In short, take into consideration UX, general design, functionality, and software loading time before you agree to anything permanent. By the way, you can check Coreteka’s software development projects portfolio to see if the cases are to your liking.

The reviews from trusted sources

Some companies eagerly share reviews, and some not. Also, there’s always a possibility of fake reviews, so make sure to check them out. Ask for a contact that might confirm the company or studio worked for them and did the job. Don’t go into any decision blindly, and don’t be too trusting.

The delivery process specifics

Some companies don’t work with iterations, and won’t provide you with an MVP version. This is a really worrisome sign, because if the company can’t describe how they work with your project, provide clear timelines and project cycles, most likely, something already has gone very wrong.

Privacy matters

A security breach can harm any company. That’s why it’s better to take care of an NDA (Non-disclosure agreement) before you share any valuable data with the team.

Cultural differences and language barriers

Make sure the team, or at least its representative who you’ll be dealing with, understands you correctly in order to avoid any mistakes because the requirements or specifications you’ve provided weren’t clear to him.

Performance monitoring

While you’re working with the oursource team, you are not able to monitor how much time they actually spend on your project. However, performance monitoring tools provide a clear way to check which tasks the team worked on.

nda oursourcing

The key factors you might want to monitor are:

  • Timesheet Reports and Inactivity Timer (to measure how much time an employee works during a given time);
  • Detailed Project Reports;
  • Websites Usage Report (to identify what websites were accessed during work hours.

At Coreteka the time spent on outsource projects is tracked with both activity timer and project reports, which helps the team always stay on track and perform better compared to product studios which neglect to implement time tracking.

The reasons for software development outsource

Software development outsource saves a company’s resources, as there’s no need to hire a full-time development team, which could take months. The development process of software starts right away after the outsource team has received a technical task.

Additional reasons to choose outsourcing are:

  • Effective development cost usage;
  • Reduced risks and operating expenses;
  • Customer support 24/7;
  • No need to waste time on onboarding for specialized staff;
  • Lower tax rates;
  • No investments in office interior.

By entrusting software development projects to a partner, customer companies can center attention on other goals and leave development to a skilled team.

Another advantage is that software development outsource teams often can share their expertise and have various innovative ideas of existing software improvement. They duly select development tools and follow the principles of Agile methodology in short deadlines.

Software development outsource is a powerful tool, which improves the productivity of a business, using the remote operation models. To have an IT department on-site can be inefficient due to high payment rates and short-termed tasks.

You will also have to upgrade development tools, pay taxes, get licenses, provide training for employees to keep up with the technological approaches. In case of software development outsource, all of the above will fall on the outsource software development team’s shoulders.

If you’re currently looking for a team that is ready to handle your projects, and is ready to help you create a web or mobile application, provide a project manager or professional quality assessment, contact Coreteka.

We’ll assist you in your bravest projects, providing outsource development and ensuring the high quality of the work done.