In today’s competitive world, software development is no longer just a technical endeavour, it’s a strategic one. While building your own team can be costly and time-consuming, software outsourcing offers an attractive alternative. But navigating the world of outsourcing can feel like sailing uncharted waters. This guide is your compass, packed with practical tips and insights to help your software outsourcing project reach its full potential.
From selecting the right partner to fostering a collaborative environment, we’ll equip you with the knowledge and strategies to navigate every step of the journey. Whether you’re a seasoned pro or just dipping your toes in, this guide will ensure your outsourcing experience is smooth, successful, and ultimately, a catalyst for your business growth. So, raise the anchor and set sail for software outsourcing success!
Table of contents
1. Introduction to software outsourcing services
To imagine, instead of building an in-house team of programmers, you choose to partner with a skilled tech company abroad. This team takes on your software development needs, from coding and design to testing and deployment. It’s like having a dedicated development wing, except it’s located across the globe, potentially offering benefits like:
- Cost reduction: Access to lower labour costs in certain regions can significantly bring down development expenses
- Wider talent pool: Tap into a global pool of skilled developers with expertise in specific technologies or niches
- Faster time to market: Leverage agile development methodologies and quicker turnaround times offered by outsourcing partners
- Focus on core business: Free up your internal resources to concentrate on your core competencies and strategic initiatives
However, outsourcing isn’t a magic bullet. Challenges like communication barriers, cultural differences, and intellectual property concerns can arise. So, before diving headfirst, we will introduce our three main different outsourcing models: IT Staff Augmentation, Dedicated Teams and Outsourced Development Services.
IT Staff Augmentation Model
IT Staff Augmentation services can help you staff up with specialised talent on an as-needed basis. This model allows you to fill specific skill gaps within your existing team by hiring individual developers from an outsourcing pool. With this service, you can find specialised talent that might not be readily available locally and only pay for the hours or skills you utilise. This service is ideal for short-term projects requiring specific skills unavailable internally and companies with established development teams seeking to supplement their expertise.
Dedicated Team Model
This service can help you build a remote office stocked with talented developers, working exclusively on your projects. This model creates a dedicated team of outsourced professionals who become an extension of your own. The service allows you to manage the team, set priorities and directly influence the development process, building strong relationships with your team, as well as fostering understanding of your needs. Moreover, you can cultivate lasting relationships, benefit from team continuity and knowledge building. Dedicated team service is ideal for ongoing projects or long-term development needs and companies seeking close collaboration and control over the development process.
Think of this model as a neatly wrapped package. You hand over your entire project, from inception to completion to an external team. They handle everything: planning, development, testing, deployment and even maintenance. You just simply define the project and let the experts handle the execution, leveraging a wider talent pool to tackle specialised requirements. It also has fixed fee agreements providing budget certainty. This service is suitable for well-defined, short-term projects with clear requirements and companies seeking one-stop solution with minimal internal involvement.
2. The importance of effective management for successful outsourced projects
Effective management is the engine that powers successful outsourcing projects. It’s like the captain on a ship, navigating the course amidst potential storms and ensuring everyone reaches the destination safely and efficiently. Here’s why effective management is so crucial:
Minimise risks and avoid common pitfalls
- Communication breakdowns: Clear and consistent communication across time zones and cultures prevents misunderstandings, delays, and rework.
- Quality control lapses: Proactive monitoring and feedback loops guarantee your project meets defined standards.
- Scope creep and budget overruns: Effective project management keeps everything on track, avoiding scope creep and ensuring budget adherence.
- Intellectual property concerns: Well-defined contracts and communication protect your valuable IP.
Optimise results and enhance value
- Efficient resource allocation: Matching the right skills to specific tasks maximises talent utilisation and project outputs.
- Enhanced collaboration and knowledge transfer: Fostering strong working relationships builds trust, promotes knowledge sharing, and improves long-term success.
- Faster time to market: Effective management streamlines processes, cuts unnecessary delays, and accelerates project completion.
- Increased ROI: By mitigating risks and optimising results, you maximise the return on your outsourcing investment.
Build strong partnerships and sustainable relationships
- Transparency and trust: Open communication and clear expectations lay the foundation for a lasting and fruitful partnership.
- Mutual respect and understanding: Recognizing cultural differences and fostering collaboration builds trust and fosters long-term success.
- Continuous improvement: Implementing feedback loops and actively seeking improvement opportunities strengthens the partnership and ensures sustained success.
3. Tips for Businesses in Software Outsourcing
3.1. Pre-outsourcing preparation
Define clear project requirements
Having a clear definition of the project is one of the most crucial steps for ensuring a successful project. It comes with a lot of benefits, such as setting expectations and avoiding misunderstandings. With well-defined requirements, you can attract outsourcing partners who have the specific skills and expertise needed. Clear requirements create a common reference point for communication and collaboration, you also can effectively track progress, measure performance and identify any potential issues early on.
Here are some steps your business can take:
Internal brainstorming and goal setting
- Gather key stakeholders: Involve project managers, team leads, and anyone directly involved in the project to ensure a comprehensive understanding of goals and needs.
- Outline project objectives: Clearly define what you want to achieve with this outsourcing project.
- Identify target audience and users: Understand who will be using the final product or service.
- Define success metrics: Determine how you will measure the success of the project.
Requirement gathering and documentation
- Analyse existing resources: Review any relevant documentation, market research, or competitor analysis to build on existing knowledge.
- Create functional and technical specifications: Clearly define the features, functionalities, and technical requirements of the project.
- Prioritise requirements: Categorise requirements by importance and urgency.
Visualisation and communication
- Develop user stories and use cases: Illustrate how users will interact with the final product or service.
- Create mockups and wireframes: Provide visual representations of the desired user interface and functionality.
- Document communication protocols: Establish clear channels and methods for communication with the outsourcing partner.
- Obtain internal buy-in and feedback: Share the defined requirements with all stakeholders and ensure their understanding and agreement.
These are some additional tips for you. Firstly, you can use project management tools like Jira or Trello to organise and track project requirements. The second tip is to break down large requirements into smaller, more manageable tasks. Moreover, you should maintain a single source of truth for all project requirements and be flexible and open to adapting requirements.
Choose the right software outsourcing partner
In the pre-outsourcing preparation step, picking the right partner is crucial for a smooth and successful project. Your long journey needs those who complement your skills, share your goals and navigate the challenges with you. Here are some key activities to help you find the ideal match:
- Define your ideal partner profile: The profile needs to include skills and experience, cultural compatibility, cost and value proposition, company reputation and track record, security and compliance.
- Shortlist potential partners: To do this, you can utilise online platforms and directories, such as Clutch, GoodFirm… You can also seek recommendations and referrals from colleagues, industry peers or professional associations.
- Conduct through due diligence: At this step, you need to review proposals and portfolios carefully and schedule interviews and meetings with them. In addition, you can request their preferences and case studies, as well as test technical capabilities through coding challenges or project simulations.
Remember, don’t just focus on the lowest price, you need to consider the overall value proposition and potential long-term benefits.
3.2. Building relationship with chosen outsourcing partner
Once you’ve chosen the perfect outsourcing partner, nurturing a strong relationship is key to unlocking the full potential of your collaboration. Here are some activities businesses can do to build a strong relationship with their outsourcing partner:
Establish open and transparent communication
Open and transparent communication forms the bedrock of any successful relationship, and it’s even more crucial in an outsourcing partnership where teams might be physically distant and cultural differences can arise. By maintaining regular communication channels, sharing feedback readily, and addressing concerns openly, you build trust, prevent misunderstandings, and ensure everyone is on the same page.
Foster a sense of partnership
This activity goes beyond mere communication. It’s about treating your outsourcing partner as an extension of your own team, collaborating towards shared goals, and valuing their contributions. This can be achieved through joint initiatives, such as knowledge sharing sessions. By fostering a sense of camaraderie and mutual respect, you can create a foundation for a long-term and mutually beneficial partnership.
It’s important to remember that these two main activities are intertwined and reinforce each other. Open communication builds trust and a sense of partnership, while a strong sense of partnership encourages even more open and transparent communication. By focusing on both, you create a dynamic and thriving relationship that sets your outsourcing projects up for success.
3.3. Effective project management
Set expectation and timelines
Setting clear expectations and realistic timelines is crucial for a smooth and successful outsourced software project. Before outsourcing, you need to be upfront about your desired quality standards, communication frequency and project completion timeframe. Discussing estimated timeframes for each phase and agreeing on deadlines in a formal contract is also a crucial step. Be willing to adapt your approach or timeline if needed, while clearly communicating the reasons to your partner. An additional tip for you is accepting your partner to be involved in setting timelines.
During project execution, you should have frequent check-ins with your partner to discuss progress, address concerns, and adjust timelines if necessary. However, unexpected issues can arise. Be willing to adapt your approach or timeline if needed, while clearly communicating the reasons to your partner.
Focus on outcome
While timelines are important, prioritise delivery of high-quality results over rigid adherence to specific dates.
Firstly, businesses should focus on business goals. What problems are you trying to solve with the software? How will it impact your overall business objectives? You need to define these clearly before even looking for an outsourcing partner. When choosing a partner, businesses should look beyond technical skills, prioritising partners with experience in understanding and delivering your desired outcomes.
Another tip for businesses is using Agile development methodologies. It promotes flexibility and adaptation, allowing projects to adjust to changing needs and feedback. This iterative approach minimises risks, ensures alignment with evolving goals, and delivers value in smaller, quicker bursts, boosting collaboration and communication between your team and the outsourcing partner.
QA & Testing
Don’t wait until development is complete, you need to involve testers throughout the development lifecycle for continuous feedback and improvement. Before diving in, businesses should outline the types of testing needs (functional, non-functional…) to clearly define their testing needs and requirements. As testing becomes a crucial part of software development, choosing a partner with robust QA expertise in your specific development technologies and testing methodologies is a good choice.
Moreover, you can also utilise collaborative testing tools, sharing test plans, bug reports and results on platforms used by both teams for real-time tracking and transparency. Automated testing is also a good choice for repetitive tasks to save time and improve efficiency.
Be open to feedback and suggestions, and consider a blended testing approach to leverage both internal and outsourced expertise. Remember, quality is a shared responsibility.
4. Vietnam – A promising destination for software outsourcing services
According to a report published in early 2021 by consulting firm Kearney on The Global Services Location Index (GSLI) software outsourcing locations, Vietnam ranked among the Top 6 best locations for IT outsourcing in terms of financial attractiveness, people skills and availability, business environment, and digital resonance.
- Talent pool: Boasting over 430,000 software developers and a booming ICT sector, Vietnam offers a readily available and growing pool of talent. The government, recognizing this potential, heavily invests in IT education, with universities churning out skilled graduates every year.
- Cost-effectiveness: Compared to traditional outsourcing hubs like India or China, Vietnam offers 20-30% lower development costs. This lower cost often translates to significant savings for businesses.
- Technical expertise: Vietnamese developers are adept in a wide range of technologies, whether they are popular frameworks like Python and Java or cutting-edge AI and cloud computing. Their expertise spans various industry sectors, from healthcare and fintech to e-commerce and gaming.
- Cultural compatibility: Time zone overlap with Europe and North America facilitates smooth communication and collaboration. Additionally, the Vietnamese workforce shares a strong work ethic and a focus on customer satisfaction, aligning well with Western business expectations.
- Government support: The Vietnamese government actively encourages foreign investment in the IT sector, offering tax breaks, simplified regulations, and dedicated IT parks. This pro-business environment further strengthens Vietnam’s appeal as an outsourcing destination.
>>> Read more: 10 Great Advantages of Software Outsourcing to Vietnam
In conclusion, by embracing the tips and strategies in this guide, you’ve equipped yourself to navigate the exciting world of software outsourcing. Remember, a successful partnership is built on clear communication, mutual respect, and a shared commitment to excellence. Trust your instincts, leverage the expertise of your outsourcing partner, and celebrate your achievements along the way.
AgileTech is an excellent choice if you want to work with a trustworthy partner who knows how to create a popular mobile app with a high return on investment, as one of top software outsourcing companies in Vietnam with detailed evaluations, ratings, and scores based on our portfolios of work and clients, as well as reviews from Tech Reviewer, The Vietnam Software Association, Goodfirms, and Clutch. We have experience in software development and a professional team that will be delighted to assist you in bringing your idea to life.