An In-Depth Guide to Successfully Outsourcing Software Development

Outsourcing - MAR 2023
Victor James Profile Picture
Software Engineer & Technical Writer
Victor James is a highly skilled content writer with a focus on producing technical and educational content for tech, IT, and SaaS companies. He uses a mix of creativity and technical expertise to break down complex topics into simple terms, helping readers understand them easily.
An in Depth Guide to Successfully Outsourcing Software Development

The software market is an ever-evolving field that continually introduces new technologies and innovations. With consumerism at its peak, the software market infrastructure is experiencing ongoing changes. 

Software infrastructures rely heavily on application software interfaces and other building tools to help developers create new and improved products. Improved software development processes dictate industry and market trends. The increased scope of options raises the bar for corporations requiring software development services. It can be challenging for a company with limited resources to keep up with such a rapidly changing environment.

For this reason, many businesses have turned to outsourcing as it is an effective way to stay competitive. Software development has come a long way, offering new technologies and programming languages that help develop better products. Stay with us as we cover everything -  selection criteria and interview processes to tips for forming successful partnerships - about outsourcing software development.

What is Software Development Outsourcing?

Outsourcing software development is when a business delegates some or all of its IT projects to a third-party provider. Companies can draw on specialized knowledge, technical expertise, and cost savings. On the other hand, outsourcing brings unique risks and challenges that team leads should manage cautiously to ensure success.

Also, outsourcing software development can be daunting if not done correctly. So, your company must choose the right platform, tech stack, vendor, and price while maintaining top-tier quality standards throughout the project lifecycle.

The Global Software Market Size

The market size depends on the scale of the market and the number of vendors. The larger the market, the more options are available to companies. It is vital to research and compare different vendors before you decide.

The global software market is an interconnected system of organizations producing and selling various software products. In 2023 it is estimated to rise to $650.7 billion, with a 70% increase through remote work utilization. It consists of large, established companies, smaller startups, and private individuals who develop their applications for sale.

The market is divided into several segments, according to Statista: 

  • Productivity,
  • Application, 
  • System infrastructure, and 
  • Enterprise.

Every brand can have different requirements for the type of software development services, and each may fall under any of the categories mentioned above.


Is Outsourcing Software Development A Good Choice?

Changes in the post-pandemic times have significantly impacted the software development market on a global level. As remote work is shaping a new hybrid work environment, the need for software development has increased. Companies are looking for ways to reduce costs and increase efficiency.

Companies can consider hiring software developers from abroad for a plethora of reasons. The demand for software development services has increased due to the rise of digital transformation initiatives as businesses leverage technology to improve customer experience and optimize operations. Additionally, companies may benefit from access to emerging technologies not available domestically.


What are the Best Practices for Outsourcing Software Development?

1. Preparation

Preparing questions to ask when outsourcing software development should be the first step to take as a company manager or business owner. As you prepare, clearly define your company's end goals' estimated budget. Also, include other segments to help narrow down the potential service providers list. 

The time you take to prepare for this process can significantly impact the outcome/success of your project. Note that hasty decisions and first-come-first-served work policies can result in many untold failures behind the corporate curtain. So, ensure to research, understand, and draft the stages of each project before sharing it with colleagues and potential software development company partners.

2. Establish Your Objectives

A clear goal will help you decide which web development service best suits your needs. It will also help you determine which features are necessary for your website and which ones to include. 

Knowing what you want from your website will make it easier for developers to create something that meets your expectations. Additionally, having a written description of your web application will enable developers to provide accurate estimates of how long it will take them to complete the project.

3. Research Vendors

Once you clearly understand your goals, it’s time to research potential vendors. Look for vendors with experience in the type of software development you need. Ask for references and read reviews to understand the vendor’s capabilities better. The easiest way to outsource software development is to use platforms that provide services of linking businesses with software development companies, as they have already researched for you.

It is essential to remember that there are three types of outsourcing - onshore, offshore, nearshore -  for research purposes. By outsourcing software development, companies can entrust certain operations to an outside organization instead of managing them internally. 

However, like with any international collaboration, success depends on both partners' compatibility, proficiency in English or another familiar language, and technical skills. Common language and equal ability will help avoid miscommunications and accurately and effectively transmit instructions. 

4. Assess Service Suppliers

Once you have identified potential vendors, it’s time to assess them. Ask for a portfolio of their previous work and read customer reviews. Make sure the vendor has experience in the type of software development you need and that they can provide references from past clients.

Learning about the company size, location, price range, and area of expertise can help you narrow the list of potential software developers. One major factor to pay attention to when assessing your supplier is its strategies and levels of software development practices.

The level of software development practices is divided into three categories:

  • Agile Methodology: This focuses on delivering projects in short cycles, allowing quick feedback and changes as needed.
  • Waterfall Methodology: This methodology follows a linear process. It completes each step before moving on to the next.
  • Hybrid Methodology: It combines agile and waterfall methodologies, allowing more flexibility and faster delivery times.

Understanding the methods and processes that service providers use to ensure successful software development is essential. By taking the time to research potential vendors and assess their capabilities and business policies, companies can ensure they are selecting the right partner for their software development needs.

5. Establish Terms of Agreement

Once you have chosen a vendor, establish clear terms of agreement. This includes setting expectations for communication, timelines, and deliverables. Consider requesting free consultations, as some companies will provide them to help you determine your project's scope.

Discussing payment terms and any additional services you may need is also essential. This includes support and maintenance after the project is complete.

Also, establish a contract that outlines all of the agreement's details. This should include a timeline for completion, payment terms, and other requirements or expectations from both parties. By taking the time to establish clear terms of agreement, you and your vendor will be on the same page while your expectations are met.

6. Monitor Progress and Quality Assurance

Once the project is underway, monitoring progress and ensuring quality assurance are vital. This includes regularly checking in with vendors to ensure they meet deadlines and deliver high-quality work.

It is also important to have a system for tracking progress and providing feedback. You can do these through regular meetings, email updates, project management tools, or other methods of communication. A quality assurance process ensures that the software meets your company's standards and requirements. 

By monitoring progress and ensuring quality assurance, companies can ensure that the software development project is successful, including testing the software before it is released and addressing any bugs or issues.


Benefits of Outsourcing Software Development

There are many advantages to using remote companies for software development. We examine them below;

1. Deep Technical Expertise and Experience

Companies can benefit from the expertise and experience of remote teams. Having ‘the best of the best’ on the team can ensure that the software is high quality and meets all the intended requirements.

2. Faster Delivery Times

Outsourcing software development can lead to faster delivery times. Remote teams are often able to work more quickly than local teams. This allows faster completion of projects (mainly because the time difference is an advantage, so the team works even when your company is unavailable).

3. Cost Savings

One of the most significant advantages of outsourcing software development is cost savings. Your company saves money by hiring remote teams, which are less expensive than local teams. This can help your business stay within its budget and still get the quality work they need.

4. Increased Flexibility

Outsourcing software development also provides increased flexibility. Companies can outsource specific tasks or entire projects, allowing them to tailor the project to their needs. This can be especially beneficial for companies that need to adjust their software development plans quickly due to changing market conditions.

5. No Extra Oversight Needed

Outsourcing software development can help your company save time and money. Also, it doesn't require providing extra direction or micromanagement. Remote teams are often self-sufficient and can work independently, allowing your company to focus on other aspects of its business.


To Sum Up

Software development has evolved to require new technologies, posing a challenge for companies with limited resources. As a result, many businesses have outsourced their software development to stay competitive. 

In the 21st century, outsourcing software development has become easier through technology. It helps create connections instead of being limited by physical distance. Platforms like GSC can help find the best software development companies for outsourcing from around the globe and only within minutes.

GSC can also help you find the best software development companies for software development outsourcing from around the globe and only within minutes. By doing the research for you, your company will minimize time and save money. It'll also help you focus on improving and supervising other brand aspects. Ready? Let's get started.

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Victor James
Software Engineer & Technical Writer
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Victor James is a highly skilled content writer with a focus on producing technical and educational content for tech, IT, and SaaS companies. He uses a mix of creativity and technical expertise to break down complex topics into simple terms, helping readers understand them easily.
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