Outsourcing can offer access to global talent, cost savings, and the ability to focus on your core business operations.
If you’re considering outsourcing your software development, you’re moving towards a flexible and efficient way for your project.
We’ll help you find and work with a complete outsourcing partner. The key takeaway in this article you will learn:
- Understanding what to look for in a software outsourcing partner
- Outsourcing software development successfully
- Mistakes to avoid
We’ll cover the simple to make sure you maximize when outsourcing. Keep reading!
What is outsourcing software development?
Outsourcing software development is when you hire another company to do your software work. It’s useful if you need help with creating apps or managing computer systems but don’t want to do it yourself. This way, you can save money, get help from tech experts, and focus on running your business while they take care of the technical stuff.
Advantages of Outsourcing Software Development
Outsourcing software development brings a lot of benefits, you can optimize resources and focus on your core activities. Here are some key advantages:
- Cost efficiency: Outsourcing can significantly reduce costs compared to maintaining an in-house development team (including salaries, training, and infrastructure).
- Access to global talent: If outsourcing, you will work with potential programmers globally, from which you will understand the working style, culture as well as professional knowledge of your countries.
- Scalability and flexibility: Outsourcing offers the flexibility to scale your development team up or down based on project requirements, without the long-term commitments associated with hiring full-time staff.
- Innovative solutions: External teams often bring fresh perspectives and innovative approaches to projects, which can lead to more creative and effective software solutions.
- Time-saving: Outsourcing can accelerate the development process, as these companies often have streamlined workflows and can mobilize teams quickly to start on new projects.
- Risk mitigation: Established outsourcing firms usually have robust project management systems and protocols to mitigate risks associated with software development.
How to Successfully Outsource Software Development
Identifying True Project Needs
The first step for you is to determine the exact requirements of the project. This step is important for both you and your partner to achieve the desired outcomes of the project. So, you need to do it.
From our experience: In the beginning, We saw many projects struggle because their requirements weren’t clear or kept changing. We remember one project where the client gave us only a basic idea without any detailed instructions. Our team, wanting to do a good job, started working right away without asking for more details. In the end, we created something that technically did what the client asked, but it wasn’t what they really wanted. This taught me a big lesson: being successful in outsourcing isn’t just about ticking off tasks. It’s about really getting what the client is aiming for and what they want to achieve.
Key takeaways for clients:
- Make sure to communicate clearly: It’s important to explain your project needs and what you expect clearly to the team you’re outsourcing to.
- Seek understanding, not just execution: Encourage the team to ask questions and understand the “why” behind your project, not just the “what”.
- Work together as a team: Think of the outsourcing team as your partner in reaching your goals. Be ready to listen to their ideas and benefit from their skills.
- Regularly review progress: Stay involved and regularly check how the project is doing to make sure it’s going the way you want.
Choosing the Right Outsourcing Model
When you’re looking into outsourcing for software development, you’ll come across different models like onshore, offshore, and nearshore. Each has its own benefits and challenges to consider.
| Model | Pros | Cons | Typical Timeframe |
| Onshore | Proximity, ease of communication, cultural alignment | Higher costs | Short to medium-term projects (3-12 months) |
| Offshore | Cost-effective, access to diverse talent | Time zone differences, cultural barriers | Medium to long-term projects (6-24 months) |
| Nearshore | Balance of cost and convenience, easier collaboration | Slightly higher costs than offshore, limited talent pool compared to offshore | Flexible, suitable for both short and long-term projects (3-18 months) |
Onshore Outsourcing: Close and Clear Communication
With onshore outsourcing, you work with teams in your own country. This is great for clear communication and easy alignment on projects. For instance, if you’re working with a local team, you can have face-to-face meetings, which can make working together smoother. The downside? It can be more expensive, so it might not be the best choice if you’re watching your budget closely.
Offshore Outsourcing: Save Money and Access Global Talent
Offshore outsourcing means working with teams in different countries, often where costs are lower. This can be a great way to save money and tap into a wide range of talents. For example, partnering with a team in India could cut costs significantly for a tech project. But remember, working across time zones and different cultures might require some extra effort in communication and understanding each other’s work styles.
Nearshore Outsourcing: A Middle Ground
Nearshore outsourcing is like a mix of onshore and offshore. You work with teams in nearby countries. This can give you some cost savings while also making communication and meetings easier because of similar time zones. For example, if you’re in the US and work with a team in Mexico, you can enjoy the benefits of lower costs and easier coordination compared to working with a team much further away.
Identify and Shortlist Potential Outsourcing Partners
Finding the right partner is important when outsourcing. Here’s a simple way to do it:
Start with Research
Begin by looking up potential outsourcing companies. Check what kind of tech they specialize in, their reputation in the industry, what their previous clients say about them, and examples of their past work. Websites like Software Outsourcing Journal, Clutch, GoodFirms, and LinkedIn are great places to find this information.
What to Look For
Once you’ve got a list of companies, compare them based on what’s important for your project. Look at their technology skills, how they manage projects, how well they communicate, and how much they charge. Also, see if they have experience in your industry or with projects similar to yours.
A Quick Comparison
Here’s an example of how you might compare some top outsourcing companies:
| Company | Specialization | Location | Notable Clients |
| EZtek | Custom software development | Vietnam | Various international clients |
| Accenture | Comprehensive IT services | Ireland | Global Fortune 500 companies |
| Cognizant | IT, digital, and consulting | USA | Large enterprises worldwide |
| Infosys | IT solutions and services | India | Global corporations |
| Wipro | Information technology | India | Diverse international clients |
| Capgemini | Consulting and technology | France | Multinational corporations |
| Tata Consultancy Services | IT services and consulting | India | Various global clients |
| HCL Technologies | IT services and consulting | India | Large global enterprises |
| EPAM Systems | Product development, consulting | USA | Tech and Fortune 1000 companies |
| Tech Mahindra | Digital transformation | India | Various international clients |
Are you looking for a leading software development company in Vietnam? Consider EZtek.
Our company is known for delivering creative and reliable services, making sure your project is handled with expertise and care.
Evaluate and Select the Right Outsourcing Partner
Next, you need to choose the right outsourcing partner for your project or business. Based on our experience consulting with our clients, here are three key criteria and practical advice for evaluating and selecting the best partner.
Check Their Tech Skills and Past Work
Look at their technical abilities and the kind of projects they’ve handled.
Go through their portfolio on their website. Find projects that are similar to what you need, both in complexity and industry. Don’t shy away from asking for references or specific examples of their work.
Communication and Cultural Compatibility
It’s important that they can communicate well and fit in with your company’s culture for smooth teamwork.
Have a chat or an interview to get a feel for how they communicate. Pay attention to how well they speak your language and their approach to solving problems. You can also check out reviews on sites for more insights.
Pricing and What You Get for Your Money
Understand how they price their services and make sure it matches the value they offer.
Ask for detailed price quotes and compare them to what’s usual in the industry. Be cautious of very low prices, as this might mean lower quality.
Extra help
- Use RFP (Request for Proposal) templates online to help you ask the right questions when reaching out to potential partners.
- Websites like Upwork and Toptal are also great for more insights and feedback on different outsourcing companies.
Negotiate Terms and Finalize the Contract
When you’re ready to finalize the deal with your chosen outsourcing partner, there are a few things to keep in mind.
What to include in the contract
- Define the work: Make sure you both agree on what the project involves, what needs to be delivered, and when. It’s important that everyone’s on the same page about what’s expected.
- Payment details: Lay out how and when payments will be made. This includes any initial deposits, payments after reaching certain milestones, and the final payment. Also, talk about how any extra work, not in the original plan, will be handled.
- Keep your ideas safe: Include terms that protect your intellectual property and keep your information confidential. Be clear about who owns the software and any data related to it once it’s made.
- Quality and standards: Spell out the quality you expect and any specific standards the work needs to meet.
- Ending the contract: Agree on how and under what conditions either of you can end the contract.
Monitor and Manage the Project Progress
When you outsource your software development project, closely monitor project progress to ensure it stays on schedule. You can ask your partner to hold regular weekly or bi-weekly meetings to discuss what has been achieved, address any challenges that arise, and plan next steps. This will help your project go more smoothly.
You can also use project management tools like Trello, Asana, or Jira to monitor project progress.
Another key is to set clear milestones. Breaking the project into smaller, more manageable parts makes it easier to track progress and quickly identify problems. You will have time to intervene and make timely adjustments to avoid the project going too far.
Also, maintain a friendly and comfortable communication style with your partner, this will make it easier for them to share the difficulties they are facing.
What Does Outsourcing Software Development Cost?
Typically, the price will depend on factors such as the complexity of the project, the location of the outsourcing company, their expertise, and the duration of the project. In general, outsourcing software development is low cost and saves resources. For example, companies in Southeast Asia or Eastern Europe might charge less than those in Western Europe or North America.
Here’s a summary table of the estimated average costs for outsourcing software development in 2023:
| Region | Average Hourly Rate |
| United States | $100 – $150 |
| Eastern Europe | $35 – $75 |
| India | $20 – $35 |
| Western Europe | $50 – $100 |
| Southeast Asia | $25 – $45 |
| Vietnam | $18 – $40 |
For a basic software project, prices might start from a few thousand dollars and can go up to hundreds of thousands for more complex, long-term projects. You can see the pricing model the outsourcing company uses like fixed price for the entire project, hourly rates, or based on specific milestones.
To get a clear idea of the costs, it’s best to discuss your specific project needs with potential outsourcing partners and request detailed quotes.
Mistakes to Avoid When Outsourcing Development
You doing something new, you probably cannot avoid making a few mistakes. Therefore, when working with outsourcing software partners, you need to avoid the following:
- Not defining clear goals: Without clear objectives, your project can lack direction. Make sure you know exactly what you want.
- Choosing based only on cost: While budget is important, don’t compromise on quality. Consider the balance between cost and the expertise you need.
- Poor communication: Regular and clear communication is vital. Misunderstandings can lead to project delays and unsatisfactory results.
- Ignoring cultural differences: Be mindful of cultural and time zone differences, as they can impact work dynamics and communication.
- Lack of involvement: Stay involved in the project. Outsourcing doesn’t mean you should hand off everything and not check in regularly.
By avoiding these mistakes, you can build a more effective and productive outsourcing relationship.
Final Thoughts
In conclusion, choose a partner that can bring short- and long-term benefits to your business. Pick a partner that aligns with your goals and values, communicates clearly, and stays involved throughout the process to ensure a successful outcome for your project.
Remember, the right partnership not only saves you time and money, but also brings innovation and expertise to your business.
FAQs
Can I outsource only part of my project?
Yes, outsourcing can be flexible to cover specific tasks or project phases.
How long does an outsourced software development project typically take?
The duration varies based on project complexity and scope, ranging from a few weeks to several months or more.
How do I protect my IP in outsourcing?
To protect your intellectual property (IP) when outsourcing software development, look for companies that are reputable and have legal protections in place. Start by signing a Non-Disclosure Agreement (NDA) to ensure confidentiality. In your contract, include specific intellectual property clauses stating ownership of all developed materials. Limit access to sensitive information to only those directly involved in the project.
