How To Outsource Software Development? Complete Guide For Outsourcing!

Outsource software development is becoming more and more popular nowadays. Does your company have business ideas, but yet no clue on how to outsource? Let’s follow these step by step to achieve successful outsourcing!

Software outsourcing is hiring a third-party software contractor to do technology-related work. With that being stated, outsourcing will help businesses minimize costs, enhance customer service, and effectively maintain product quality. It also focuses on your core competencies, given a limited budget.

Software development outsourcing, thus, provides businesses with a competitive advantage by minimizing costs, enhancing customer service and maintaining product quality with narrow sources.

So, outsourcing software development can be a fantastic way to improve your company’s performance. These guidelines will bring you tips for the decision-making process on how to make outsourcing work.

In the past few decades, this sensation has brought many opportunities for outsourcing companies in Asia (India, China, Vietnam, etc.). Many view outsourcing as an ongoing major trend in the business world.

In today’s economy, you can outsource software development for nearly any part of your software products. But should you? To help you get started, here’s our handy guide to outsourcing everything.

1. Outsourcing or not?

Today, outsourcing is no longer only a buzzword for low-cost labor; it has become a key business strategy for both small and large business enterprises.

Outsourcing software development is one of the most effective strategies to stay competitive, offering not only economic sense but also a promise of better efficiency.

In fact, a successful outsourcing strategy will reduce time-to-market, access to world-class technology and cost-savings for your company! Despite that, an offshore strategy without carefully defined business objectives can lead to higher IT costs. Moreover, unfocused outsource software support can waste resources or even cause loss for business.

After all, the first step worth taking is a paper with your breaking into four columns: What is outsourcing? Why is there a need for outsourcing? How to outsource in easy steps? Where can I find outsourcing firms? 

For example, you need to upgrade your website, but don’t have enough time to develop or hire web developers. The best task is to contact the software outsourcing company.

There are many advantages of outsourcing software development:

• Reduce Cost – You can access quality outsource companies at a lower cost.
• Increase Productivity – Outsourcing shows an increase in your productivity, customer loyalty, level of quality, business value, profits, and much more.
• Improve Work Quality – You can focus on primary business tasks with the help of outsourcing software development.
• Access To Skilled Expertise – As described, one of the primary reasons why a business should outsource is skilled expertise.
• Delight Your Customers – Outsourcing can help you get benefits from increased customer satisfaction and thus creating a stream of loyal customers.

2. How to choose an outsourcing company – Step by step

Once you decide to outsource software development, the next step is to ensure you find the right outsourcing partner. If you choose the wrong outsourcing company, the results could be harmful to your business. That’s why this step is regarded as one of the hardest parts, yet crucial in the process.

Before making the final decision, you also need to consider certain factors. In this article, AgileTech Vietnam would like to introduce you to the necessary steps you should take when choosing an outsourcing partner. Hope this will help you find the right outsourcing solution and develop a successful project.

2.1. Identify the best approach to outsource

A successful outsourcing strategy is a desirable yet measurable goal. It’s your responsibility to define business objectives in the first place. Hardly a project reaches success if you don’t know where you are going, right?

Firstly, break down your goals and discuss these within sectors in your company, then externally with the outsourced software development you choose to hire. You can start by answering some simple questions like:

• What is your business need?
• What is your target when outsourcing, such as cost/timeline target?
• Why should you use software outsourcing services?
• How to find the best solution to achieve your desired outcomes?

Once you have identified the tasks you want to outsource, it becomes easier to find the right outsourcing software company. Selecting which activities to outsource and evaluating the benefits that you can leverage is what a beginning quite takes.

2.2. Research the best countries to outsource

Determining which country has qualified individuals to work and maintain its values on products and services is no less important. The main things you should care about are a lower-cost yet developed IT market, backed by a high-quality educational infrastructure. In addition, their ability to communicate in your native language is also noteworthy.

• Ideally, you should choose the outsourced software development with English capability. These countries create large skilled developers for you to choose from.
• Another factor for outsourcing to consider is time zone. Find ways to best collaborate with workers given a huge gap of time difference.

There are many software outsourcing companies in Asia, and that number continuously grows through years. Some of the major countries for outsourcing are India and China. However, we also recommend the top IT outsourcing destinations in emerging and developing Asian countries.

When it comes to outsourcing software development, the similarities between Asian countries are low labor costs and a large pool of IT talent. Besides, some factors differentiate some countries from others and make them stand out.

2.3. Locate an outsourced company

You can start with Google search and gather information of possible partners. Don’t forget to put companies that seemingly offers the best quality outsourcing solutions on a shortlist.

Project experience

First thing first, you need to look up what kind of projects that outsourcing software development company has done. Scroll through the rating of the best partners they meet your quality standards. They have done projects that share similarities with yours? Great start!

Communication

Secondly, other options for an ideal outsourcing partner include maintaining a good level of communication. Although with the help of Slack, Skype, and G Suite, no software can truly overcome a language barrier. It’s better to request conference calls with all the involved employees to ensure they are the right fit for you.

Flexibility support

It is very important concerning how flexible your outsource partner is. If any urgent support requirement arises, even in different time zones, you need to be very serious in this aspect. Similarly, support should include any future bug fixes and software updates.

Budget

Don’t look for the cheap. Avoid software outsourcing companies that apply hidden costs or additional costs. Keep the size of the project and budget factor in mind.

Now that you have a list in hand. Let’s make the calls. Talk to the outsourcing partner and discuss your requirements. Choose those who respond to you clearly and understand your needs!

2.4. Outsource the contract and start outsourcing

Now, the hardest part is choosing which outsource software development company is the most suitable. You need more than spoken words to know if one IT outsourcing is the right fit for your project.

The next step you should take is to contact the agency you previously reviewed for past work and clients. Ask them about their work process, the technology, IT solutions or management experience…

One more important thing you must ensure is that pricing and key components in the contract with information clearly stated. Your contract will specify the services that will be provided, the timeline for the provision of those services, and payment for the services. Once you are done with this, you can sign and start outsourcing.

Read more: Software Development Contract: 8 Mistakes To Avoid In Outsourcing Agreement!

3. How to set up a dedicated development team?

It is a challenge most clients face when building the dedicated development team. If you are considering working with one, this guide will give you some useful information and tips.

3.1. Choose the right outsourcing model

Fixed cost model 

With this model, you must have a clear and detailed project plan in advance since the budget for the project will be fixed. A fixed price model will work best with small trial projects and protect the customer from any budget fluctuation.

You also don’t need much supervision for this project, as the plan is communicated transparently right from the start. However, there are also drawbacks. If you underestimate the budget, the project may come out poorly as the vendor can severely cut down costs to meet the established.

Dedicated team model

Here we come to the ideal model. This model is the most flexible and scalable among the three. You will have full control over the operation process and the team.

Not only follow the product to its finish but also assure the maintenance and regular update of the project. The model suits long-term projects the best.

3.2. Choose reliable partners

Have a look at their work history

You surely don’t want to work with partners with bad reviews from their customers. Search for the most honest feedback on websites like Good Firms or check their portfolio and ranking. You can also have a check on their employees to have a better picture of who you will work with: their recognition, awards, qualifications, years of experience, etc.

Effective Communication

Be sure that your team has a good command of English to prevent misunderstanding. You should discuss with your potential partners thoroughly about your concern and worries to avoid conflicts later.

3.3. Get started with your team

The whole hiring process is all about finding a trustworthy outsourced software development company. And there are more ways you can further do that:

• Check websites that provide the company category ranking, rating, and reviews like Clutch.co
• Check out their work progress on sites like GitHub, Quora,… to fulfill your expectations and product requirements.

4. Outsourcing mistakes you need to avoid

4.1. Don’t need management

Big mistake. Set up regular chats with the outsource team over Skype or weekly email. Make sure that everything is running smoothly and on schedule.

When outsourcing, a time tracking solution is always a good idea to keep an eye on the costs and how freelancers are spending their time. Don’t hesitate to provide feedback on what you like and don’t like.

4.2. Looking for cheap

Though, many small businesses will take a look at finding outsource software development. But cheap is never a good deal! In another word, you get what you pay for. Always working with the partner that can provide the best quality for outsourcing. Don’t just search for the lowest price.

4.3. Misunderstanding the cost

Outsourcing isn’t always the cheapest way to grow the business. Sometimes, it costs more to hire employees from abroad rather than employing full-time workers. Make sure the outsourced team is on track and performing effectively.

4.4. Considering cultural factors

When working with cultures different from yours, there are some issues to consider. For example, the time zone sometimes presents some troubles in contacting your outsourced software development.

Further, success depends to a great extent on your overall attitude toward outsourced team members. Adaptation also goes both ways. You must also understand their culture and embrace their differences.

5. Is it better to choose a small or a large outsourced software company?

Once starting new projects, there is a question: Who can provide you with good development service? Big corporation or small business outsourcing? Usually, everyone looks for not just perfect communication but fast, reliable, and high-quality outsourced software development. There are pros and cons to both of them.

Firstly, in small companies, there are fewer than 50 staff, and large ones include 100 or more workers. In each kind of outsourced company, cost, location, previous experience, and more aspects the key which can influence your choice.

How do you choose your software outsourcing company? It all depends on the project or just the idea you have in mind. After that, the question “Is it better to outsource payroll?” could be considered.

Read more: 10 Great Advantages of Software Outsourcing to Vietnam

Let’s Go!

Finally! The step-by-step process for the outsourcing plan will help you create systems for your employees and motivate them to be productive with or without you. But remember, the first time outsourcing can seem a little overwhelming.

While many businesses find it difficult to outsource, many popular global companies like GitHub, Skype, and Slack have done it before. Outsourcing can boost business growth and efficiency. You will earn more, work less, and be able to contribute more to the world with your unique abilities. Are you ready to outsource software development?

If you have any questions about outsourcing, please ask them below! We’ll do our best to answer each one, and may even write another post on the most frequently asked questions about outsourcing.