What to Consider Before Software Development Outsourcing

Why Companies Outsource Software Development

The outsourcing of software development work isn’t a new practice by any means. As technology continues to advance at an incredibly rapid pace, it’s becoming even more common for busy companies to partner with third-party development firms to accomplish their goals.

There are many reasons why companies choose to outsource their software development needs. Hiring and maintaining an in-house team of developers is expensive – and not just in terms of salary. There are many costs associated with in-house employees, including taxes, benefits, health insurance, vacation time, as well as the hardware and software tools required to get the job done. Software development outsourcing eliminates these extra costs so that businesses need only pay a single rate on a monthly or weekly basis.

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What are the Benefits of Software Outsourcing?

The outsourcing of software development offers many other benefits for organizations as well. Outsourcing allows for on-demand scalability when large projects come up that may require more team members to get the job done on-time and within budget. It also connects companies with unique or niche skill sets that they may otherwise have been unable to access due to cost, hiring constraints, or the general talent shortage in the world of information technology. 

Partnering with an experienced and trustworthy outsourcing partner also helps mitigate company risk. As cybersecurity is a top priority in today’s technology landscape, companies must ensure that they put the most secure and trustworthy products out for their own internal use or for their end-clients. 

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What to Think About Before Hiring an Outsourcing Partner

There are obviously many benefits that come with working with a third-party outsourcing development for software development. However, there are a few things that companies must consider and decide on before searching for and hiring an outsourcing company.

Decide on the Skills Required for the Project

Before a company begins searching for the ideal development partner, it’s important to know the requirements for the job. A detailed project outline or set of specifications that defines how the software should function will help avoid any misunderstandings in initial meetings with outsourcing providers and beyond.

With a detailed project outline in place, the next step is to decide on any necessary key competencies required to complete the project. Key competencies are the qualities deemed important by the company that an outsourced employee needs to possess. For example, an internal team may have a lot of experience in mobile development but lacks experience in complex integrations. Once the company decides on the skills they are missing, it’s easier to find the right outsourced employees without redundant skill sets.

Choose the Right Type of Outsourcing

There are three ways to outsource projects: offshore, nearshore, and local. Each type comes with its own advantages to the process.

Offshore outsourcing is the process of hiring an external development team in a totally different region or continent than the hiring company. This method of outsourcing is popular as it not only provides companies with access to a wide range of skills from around the world but also reduces costs much further as the cost of living is commonly lower than in the hiring country.

When organizations partner with a company in a neighboring or nearby country, it’s called nearshore outsourcing. This is typically more affordable than local outsourcing, offers compatible time zones, and is generally compatible in terms of culture and communication style with the hiring company.

Figure Out a Budget

Cost is a crucial consideration when it comes to outsourcing successfully. Outsourcing is a great way to reduce the cost of completing a software development project. Although it’s important to have a clear idea of a general budget when beginning the process of finding an outsourcing provider, it’s not the full definition of the project. Cost shouldn’t mean a compromise in quality by any means.

By going into initial meetings with outsourcing providers with an initial budget in mind, companies can get a better idea of whether a partnership with a particular provider will work or not.

Figure Out a Way to Protect Intellectual Property

A non-disclosure agreement or legal contract of some sort needs to be in place before a company proceeds with a partnership with a software development outsourcing provider. This contract needs to detail who has access, the storage location of the source code, specific task responsibility, and any confidentiality requirements. This is especially important for brand new software products that have not yet hit the market as it is easy for intellectual property to be leaked.

Map out a realistic growth strategy and milestones. – With a defined growth strategy in place before hiring an outsourcing company, organizations better define the roadmap for development. This helps refine the project scope and identifies the functionality the software may require in the future. A clear growth strategy enables the outsourcing team to know not only what they’re building in the present, but where it will go in the future.

Companies also tend to generally underestimate the amount of time it takes to fully develop a software product. Therefore, organizations should take the time to decide on achievable project milestones ahead of time. They should be realistic, measurable, and attainable while allowing for any necessary testing or debugging time.

Getting Started with Software Outsourcing

Outsourcing software development projects is a great way for companies to achieve their goals while staying within budget and time confinements. It also gives organizations access to a larger talent pool, the ability to scale up or down on command, and risk mitigation for security threats. Before any company begins the search for the right outsourcing provider, internal teams should take the time to consider the items mentioned above to help better guarantee a successful long-term partnership and projects.

At BairesDev, our team of the top 1% of IT talent helps companies develop their products from start to finish. Our world-class software development team is an experienced partner that delivers cost-effective and reliable solutions on-time and on-budget. To learn more, contact us here.

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