A Guide on How to Outsource Software Development  How do you outsource custom software development?

how to outsource software development
Jul 20
Read 6 Min

Both tech companies and non-tech businesses embraced outsourcing as an efficient practice. In fact, more than 300,000 roles were outsourced to third-party providers and BPO companies, according to 2018 data. And if you’re looking for help in the IT domain, these external tech specialists could be your perfect match. So, how to outsource software development, and why is this path highly beneficial for you? 

There are countless perks of hiring external teams and individuals to boost your outcomes. Read this article to learn how you can spot the right vendor and acquire the best services. 

What Does Software Outsourcing Mean? 

The market size of outsourcing tech roles reached nearly $67 billion in 2019. And as for the prognosis and the future of outsourcing – these figures will unquestionably keep on growing. So, what does this practice entail, and how do we define it?

The simplest and most straightforward definition suggests that it represents an arrangement that determines how one company lets another one handle parts of its business. In this particular case, one organization picks a reliable BPO company dedicated to software development, whose team takes charge of specific tasks. 

Careful selection is the key to making outsourcing work well. By choosing the best outsourcing company, you can gain quick access to essential skills and knowledge while saving a lot of time and cutting some costs

Should I Outsource My Software Development?

Practically every business owner has faced the same dilemma at some point. If you’re planning to grow and scale your company, there comes the time when you’ll have to choose between building an in-house team or hiring a BPO provider. Sometimes, relying on a third-party organization offers more perks. But you must learn whether that would be the wisest choice for you. 

Recognize the key factors before making the decision to outsource software development: 

  • If your in-house team lacks some tech skills that are quickly becoming crucial for the project, it would be best to find external help,
  • When you must reduce time-to-market, finding a BPO company is usually the best alternative,
  • If you’re short on staff (and you can’t dedicate enough time to hiring internally), be sure to find a reliable third-party dev team.

Although some risks and challenges are commonly related to outsourcing, this practice drives the optimal results when done correctly. That is why you must look carefully into your internal state of affairs before making a final decision. If you spot the signs that you need some qualified staff working shoulder to shoulder with you (and you need them now), the moment is right, and you should start canvassing the market. However, you have to take this step seriously and be very meticulous about the search. 

Know What You’ll Get: Pros of Software Development Outsourcing

You only want the best for your company. Contemplating different approaches and practices comes as a normal part of growth and success. Will you hire a third-party dev team? What are the advantages of software outsourcing? Here’s what it will bring to the table:

  • Focusing on core competencies,
  • Gaining control of your finances,
  • Cutting various costs,
  • Obtaining results faster,
  • Increasing quality,
  • Having quick access to particular tech skills,
  • Collaborating with a team that’s already used to working together,
  • Boosting productivity. 

These are some of the main benefits of outsourcing software development. However, in order to enjoy them fully, be careful with who you choose to work with. 

Why You Shouldn’t Outsource Software Development: Cons to Keep in Mind

Every method and business practice has some upper hands, but it also comes with drawbacks. Although outsourcing is evolving quickly and many of the major obstacles are being overcome, there are still some disadvantages to it. Watch out for these stumbling blocks:

  • Lack of quality communication,
  • The negative impact on the company culture,
  • Security risks,
  • The inability to monitor the team, 
  • Hidden costs,
  • Potential decrease in quality. 

Although some businesses have faced an unfavorability or two, the whole industry is unstoppably progressing. And because of that, it’s becoming easier to spot the warning signs and diminish the chances of encountering these complications and impediments. 

New outsourcing trends are changing the game. Nowadays, we all recognize the importance of ongoing and clear communication, especially during the times called the new normal. Companies around the globe have been jumping through hoops to maintain their old ways while enriching them with innovative strategies and a variety of tech tools. These particular tools that ease the remote work will help you out with basically all of the cons mentioned above – from communication issues to security risks. 

How to Outsource Custom Software Development?

Now that we have defined some terms and mentioned the main pros and cons of outsourcing, it’s time to mention the essential steps you’ll need to take if you choose to go for this practice. How to outsource software development? Start small and cover everything that matters: 

  • Explore your needs and do a thorough internal analysis to be in the clear regarding your expectations and possibilities,
  • Research the market and get familiar with all the trends, requirements, and possible gaps,
  • Learn about tech talents and relevant skills you’ll want on board,
  • Get to know your competition and see what they have to offer,
  • Understand your target audience and grasp the steps toward gaining their attention, 
  • Start exploring various BPO companies and shortlist the ones that seem to match your needs, 
  • Give it some time to think and choose the best outsourcing company. 

Now, all of these steps come down to a single conclusion – you will be researching a lot. Get ready to inspect your business inside and out, see how it currently ranks compared to your competitors, and set yourself clear goals. Then, hire a team of skilled and experienced developers that will help you out with reaching them. 

Explore BPO Companies

The quality of your software hugely relies on the knowledge and attitude presented by your outsourcing provider.

A top software company can build a great product that promotes your company’s efficiency and gives it a competitive edge. Nonetheless, working with a vendor that has a bad reputation may push your operations off their course and set your progress backward.

While looking for a BPO company, reading their reviews and recommendations is paramount, but it’s not always sufficient.

Take a glance at some of their past projects, which will indicate their quality, experiences, and technical skills.

Explore the apps, websites, and other software that they’ve built by minding these features and aspects:

  • User Experience 
  • Mobile-friendliness  
  • Design and aesthetics
  • Time to load 

Finding a suitable BPO company determines whether your company will move toward long-term success

Get in Touch and Choose the Best Outsourcing Company

Aside from looking carefully into technical skills and previous experience, you will have to focus on other factors when choosing an outsourcing partner. Keep these in mind:

  • Establish a scope of work precisely before making a final arrangement,
  • Ask the right questions related to technical experience and non-tech matters,
  • Look into the BPO company’s market reputation,
  • Be transparent regarding finances and have a discussion early in the negotiation process,
  • Find a team that shares your core values and work ethics. 

That way, not only will you boost your products and conquer the competition, but you will also preserve (and strengthen) your company culture, reputation, and brand. In the meantime, your financial status will only improve if you have straightforward communication about this aspect from the very beginning. 

Bonus Tip: Start With a Test Project

Prior to selecting a software company, you must be certain about its skills and capacities.

Begin by asking their development team to work on a test project. The team’s achievements on this brief project can help you judge whether you’d like to proceed with working with them.

Focus on these crucial things during the trial project:

  • Communication skills
  • Punctuality and time management
  • Team’s genuine interest and attitude
  • The questions the developers ask
  • How well the team reacts to feedback
  • Whether they deliver what they have promised

A test project may demand investing some time and resources. Nevertheless, it helps you avoid many serious problems in the long run. 

How Much Does it Cost to Outsource Software Development? 

The costs of outsourcing development vary due to multiple factors. For starters, there’s a matter of the region you will outsource to. Then, developers’ salaries also fluctuate based on their experience, background, and technologies they use. The tech stack’s complexity usually raises the cost. Another thing that determines the expenses is the company’s size. For that matter, larger companies offer more than software engineering, which adds to the cost. Services like consulting will add to the fee you’d be paying. 

However, when we break down the factors and expenses based on the areas, these are the conclusions that can be drawn: 

  • The European talent market is becoming more prominent and appealing than ever, especially in the Eastern and Southern parts of the old continent. Ukraine has the largest number of tech specialists in the region, 
  • Asia offers the lowest fees, but the quality of the code is usually lower compared to Europe, 
  • Latin America offers a few perks, such as convenience due to proximity and flexibility regarding schedule and time zones, 
  • Africa’s outsourcing market is on the rise, but the number of tech specialists there is still quite low. 

Now, these are the figures collected throughout 2020/21 and the expected hourly rates across Eastern and Southern Europe:

  • Intermediate Software Developers in the Ukraine and Romania make from $25 to $45 per hour,
  • A developer with the same experience from Poland or Hungary charges between $40 and $55,
  • Medior Software engineers from Bulgaria expect to be paid from $35 to $50 hourly. 

Learn more about the salary ranges and plan your budget by using PayScale to calculate the costs and find out about the popular regions for outsourcing. 

Learn How to Outsource Software Development and Reach Your Business Objectives

Assigning parts of your business to a reliable third-party provider always seems at least a bit tempting. In many cases, it is the wisest option, too. But still, look carefully into the signs and start by answering the main question – when should you outsource development? Once your priorities, goals, budget, and aspirations are aligned, start your search. Be ready for a full-scale quest and get profoundly familiar with the market. Explore the best outsourcing companies and find one that meets your needs. 

And this is the right place to start

 

Former tech recruiter, devoted to content writing. Focused on creating unique articles and helping companies showcase their culture.

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Tatjana Zotovic