How to Outsource Software Development: 10 Simple Steps

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How to Outsource Software Development: 10 Simple Steps

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These numbers were used to illustrate the base salary that XYZ Inc. would need to pay each of their 18 Java developers had they chose to insource their e-learning application. Insourcing is advantageous if you look at it from a “convenience” perspective. Insourcing team members simply means that you keep them in-house without having to extract outside help from other areas, hence outsourcing. However, there are far more important aspects of business processes than the distance or convenience factor. In December of 2017, we had a client (let’s call them XYZ, Inc.) come to us with a fairly complex application request that was tied to a series of very tight deadlines. The client had just acquired a large, e-learning platform, and they were hoping to spearhead the acquisition with a mathematics testing application that they could bring to market by mid-summer of 2018.

Nearshore outsourcing is choosing a third-party vendor in a zone with time and geographical proximity to your country suitable for both long-term and short-term projects. Simply put, onshore outsourcing is hiring professionals within your country. Usually, it’s chosen by companies that already have an in-house team involved in the project. The main advantage of this approach is the ability to communicate in person and the absence of language and cultural differences which results in a smooth and fast development process.


You can definitely find software developers whose prices seem too good to be true, but who give you exactly what you paid for in the end. As a general rule, you should avoid companies that offer very low prices. Those that don’t have a track record that can be checked are also risky. In the next section, we will talk more in-depth about risks related to outsourcing software development. Effective communication and collaboration are crucial for successful outsourcing.

How to choose an outsourcing software development company?

Even if they do there’s nothing that will cure the pain of doubling the time to market. Services Column 01 Product Scope 7-day process to align the product with your business goals. Here, you’ll want to check if your interviewee has target clients with characteristics similar to your own, including your vision and the size of the project. If they do, it increases the probability that you will have a positive experience with them.

Loosely formulated contracts, or even worse, oral agreements can lead to sizable monetary losses. All the deliverables, timeframes, payment and communication schedule, intellectual property issues, and confidentiality must be outlined in the contract. Choosing the right cooperation model will help you not only omit extra expenses but also get the product developed in a timely manner.

The company has helped many brands with their digitalization & app development. By following these five steps, you can streamline your software project outsourcing process and ensure a successful result. Many Software Outsourcing Companies in India, like ValueCoders, mitigate risks while ensuring success in all your digital transformation and SAAS development efforts. All you need to do is connect with their consultants, who will manage everything for you. After determining your specific needs, you can start researching potential vendors who specialize in delivering software solutions that meet those needs. You can use online resources or contact software outsourcing companies in India or elsewhere for assistance in finding suitable vendors for your project.

A meeting with them can give you an idea of how well they use their time and how well they get along with you. Check to see how quickly and correctly they answer your questions, how well they can adapt to your needs, how clear they are when explaining their processes, and how confident they feel when doing so. We wrote another blog post where you can learn more about staff augmentation and the benefits it provides. Our managers are responsible for giving customers daily insights on the scope of the project and keep them updated about all the challenges.

Difficulties with the delegation of authority can arise for any leader, particularly one who craves control. It is difficult to adjust to the fact that an unknown employee is performing work for your company, and it is tempting to contact the contractor every minute to check on the progress of the work. Every day, we face a new set of problems, such as infrastructure vulnerabilities, phishing attacks, data loss, and IT systems that are overloaded. The fact that these cybersecurity risks could put your data at risk makes them very important. Offshore outsourcing is the practice of sending work to a company in another country or region. We recommend a business that has been around for at least five years because you don’t want them to fold in the middle of your project.


Working with successfully outsource software developmentd developers who understand the principles of your project can accelerate your product’s time to market. As the fastest growing outsourcing company, at BairesDev we strive to drive the software development industry forward. Both parties must sign the MOU or contract in writing to guarantee it is legitimate and may refer back to the agreement if required. The parties’ complete legal names, addresses, and contact information must be included, as well as a method for resolving issues.

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Conduct detailed interviews and coding exercises, if possible, to ensure that the developer is capable of performing the needed tasks. Asymm has put a lot of time and effort into building a talented development team and a network of developers looking to drive project success for our future clients. Schedule a call with us, to talk about potential solutions, our pricing model, and other operational details about our nearshore software development and nearshore staff augmentation operations. You can hardly start a project and think it will be successful if you don’t know what your goals are from the start.

The 3 Main Models of Software Outsourcing

If you can’t quite define the task, describe what qualities the perfect resource would possess. You may also want to map out your budget, as it may be time to put the brakes on until your vision crystalizes. Acceptance testing is a test conducted to determine whether contract requirements are met. This section states which party is responsible for the testing, how long it takes, and how the results are communicated. Identify what you need (an app type, platforms to run your app, tech stack, estimated deadlines, etc.). As the backbone of the SDLC, this stage is all about ‘translating’ the product’s design into the actual software.


IT leaders find capacity the main challenge in software development. Communication with your outsourcing vendor and transparency of the project’s progress helps you with higher visibility. It also enables better project management and tracking of vital metrics.

Human-Centered Design: How, When, and Why Your Business Needs It

The offshore outsourcing model is where you outsource the software development to a service provider in foreign countries or outside your home country. One of the most significant reasons for offshore outsourcing is cost reduction. According to Deloitte, cost is one of the most critical factors for organizations to opt for an offshore team. You can choose an outsourcing model to delegate projects based on the scope, size, location, complexity, and project budget.

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Tell the company what your budget is, what timeline you are working with, and what kind of results you are expecting. If the company is not able to meet your needs, it is probably not the right fit for your project. Through our centers of excellence we recruit, train and profesionally manage talent to ensure expertise from discovery to delivery.

Software development outsourcing contracts and pricing

If your company is based in the U.S., then Mexico is always a sound choice for outsourcing. There are 3 principal software outsourcing models that companies can choose from. The outsourcing model that suits your project will depend on its level of complexity, your budget, timescale, and level of involvement. Once you have picked the outsourcing company that better fits your needs, it’s time to kickstart your project. In other words, you need to meet with the outsourcing team, explain your goals, and devise the roadmap ahead.

Here, you should specify hourly rates, development phases, milestones and their deadlines, responsibility for delays, payment schedules, and the like. The company that has met all the evaluation criteria listed above is likely to be a reliable outsourcing vendor. To learn more details on each of the steps, please read our blog post.

The daily plan is quite detailed, the iteration plan is less precise, and the release planning is the least precise of all, containing merely a prioritized list of desired project features. The development process is not amorphous; it is loaded with planning throughout each phase and level. The client or client representative in the form of Product Owner should be involved during the whole project. If you have already outsourced the development then you definitely know what to avoid and what works well. Consider your previous experience with outsourcing no matter good or bad it was to set up the process with a new IT provider. For example, in cases when the project is complex and requires precise documentation, but the client wants to keep track of progress and save some flexibility in requirements.

Outsourcing software development services can be a real game-changer for fast-growing small and medium-sized businesses. Not only can it have the effect of saving money and get you working software delivered faster. XYZ Inc. defined their parameters, vetted software development partners, and hired 18 Java developers from Chetu. Chetu developers come in to attack a predefined, niche task, and once that task is complete, clients put our development services on pause until their next project. This, amongst many other reasons , is why outsourcing software development is the smartest business decision for companies requiring IT-related assistance.

Contact the, or its representative, and discuss your idea, requirements, and goals. Feel free to ask for a cost estimate for your project and pick the outsourcing pricing model. It is a great way to check their communication skills, flexibility, transparency, and the ability to speak with you in the same language. Another risk of software development outsourcing is losing your confidential data.

  • We’re led by an Agile mentality, powered by technology and driven by talent.
  • Remote development teams, giving you the tools and knowledge to stay ahead of the curve.
  • Asymm has put a lot of time and effort into building a talented development team and a network of developers looking to drive project success for our future clients.
  • A meeting with them can give you an idea of how well they use their time and how well they get along with you.

Software Outsourcing has become a viable way for companies to access the best talent at the most affordable cost. However, finding, evaluating, and engaging Software Outsourcing Services and software outsourcing companies in India is complex and time-consuming. It is essential for companies to have a backup plan in case the vendor fails to meet their expectations or if the project does not come out as desired. Thus, even if everything seems perfect, be prepared with your plan B to protect your project from unforeseen conditions. Read industry publications or reviews related to digital transformation, SAAS development, or offshore software development. The experienced developers from offshore companies have the expertise to deliver projects on time, as they understand the importance of meeting deadlines.

In fact, the selection process is similar to choosing any other service provider — with a few industry-specific amendments, of course. When you outsource your software development project to an agency or organization, they assign a dedicated project manager who handles day-to-day tasks. The project manager brings the dedicated development team and the product owner to the same page about expected outcomes and timelines. After you approve the project plan and estimate, the PM takes care of the entire execution process.

Dedicated Teams Build your product with a dedicated team of developers. Software development outsourcing allows you access to a diverse pool of tech talent that can allow you to move your project quicker and in a more cost-efficient way. We take project ownership and responsibility for decisions that were taken during the development. Success of the project is the only metric that really matters to us. Managed teamIn this model responsibility and ownership are shared by the client and the outsourcing provider determining on which responsibilities belong to whom. Your managed team operates independently of your in-house team, with an outsourced Project Manager overseeing daily operations and workflows.

  • It can be especially burdensome to complete a one-off project with a static stop-start date.
  • It is also essential for the organization to provide regular feedback to the outsourced team so that they address challenges quickly and efficiently.
  • It’s best for you to understand the differences between them and make the choice that works best for your purposes.
  • You can fill gaps in your teams with the help of the talent you can find in key outsourcing destinations.

In this model, the outsourcing company is assigned to complete a particular project within a specified schedule and budget. By outsourcing non-core services such as software development, you can concentrate on the core capabilities and strategic objectives of your organization. Since Waterfall assumes developing software in a sequential, linear process, the proper planning step is a critical success component for the entire project.

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After finishing the development phase, it’s time for the QA team to conduct quality assurance by analyzing the source code and checking if there are any bugs, errors, or security gaps. At this point, the product goes through rigorous testing of various types such as functional, performance, regression, unit, integration, security, usability, black box, white box, etc. Make sure that the code developed during this phase aligns with the initial project requirements. The development phase will take the most time, but if other teams have arrived at appropriate outcomes during the planning and designing stages, you won’t have to face too many challenges. At the end of this phase, you will have a working product with a source code repository.