It seems like more and more leading companies around the world choose to outsource their software development process either fully or partially. Why is that such a trend? The first golden rule here is to focus your productive efforts on core business processes. These will vary greatly depending on the industry you’re in, e.g. banking, healthcare, aviation or insurance. Inevitably businesses rely more and more on technology to operate, and here comes the second golden rule: outsource software development to certified experts.

From my experience working in a bespoke software development company with long-lasting client partnerships and a 95% retention rate, I learned the value of trusting a vendor partner while embarking on a new business (ad)venture. A possible scenario is that you’re just starting an ambitious new software project and need external support throughout the development process. Thankfully, there are companies that specialise in custom product development that will help you accelerate your time to market (TTM) if your in-house technical resources are limited.

1. Have a Product Vision

Every future-oriented product or groundbreaking solution starts with a burning desire to change the industry status quo, improve existing processes, or bring added value to the community and make the world a better place. All that is good, but once you have the desire, you’ll need to establish a clear vision long before looking for an outsourcing partner.

While it is true that software experts will provide you with another perspective and help you refine your product vision, as a business owner or executive, you need to have precise business requirements in advance. Start by asking yourself questions about the importance, location, resources, experts involved in the project and move your way up to the well established SMART goals method. Essentially, it breaks down complex goals into smaller and manageable chunks that help you define your goals as Specific, Measurable, Achievable, Relevant and Time-bound.

2. Types of Outsourcing Locations
   

Now that you have a clear understanding of and a rounded up product vision, it is time to start looking for the right type of vendors. Based on their location, there are three main types of software development companies that offer outsourcing services: local, nearshore or offshore outsourcing, each of them coming with distinguished pros and cons. Businesses must consider their product goals, have an approximate idea of available financial resources and keep in mind their particular pain points before deciding which type of outsourcing to choose.

Local outsourcing companies are the ones that are located in your own country. The main advantage here is that most likely, the developers will be native speakers but expect project development costs to be relatively high. On the other hand, nearshore software development outsourcing refers to partnering with a company located geographically near your country, e.g. if you are in Germany or the Netherlands, nearshore outsourcing would be to delegate software development to Eastern European specialists. Offshore outsourcing is the practice of trusting a firm located far away from your country, e.g. from the Asian region in case you are located in Western Europe.

3. What to Look for in an Outsourcing Company?
   

As a trendy professional occupation, it is not surprising that the number of software developers worldwide is rising rapidly. Just as a reference, whereas in 2018, their estimated number was 23,9 million, so if the trend continues by 2030, there will be 45 million professional developers globally, working in hundreds of IT companies. As the talent pool is getting more extensive and globalisation supporting wider access to professional around the world, it seems that it’s getting harder to find the right partners. To make the process easier for you, here is what to look for:

Do a background check by reading online testimonials from previous clients with feedback on the outsourcing company’s performance. It is essential that your future tech partner can back up his portfolio with results from successful past or ongoing projects. Also, schedule interviews as soon as possible while you shortlist potential candidate companies to get to know them better and access their English language skills as flawless business communication requires fluency.

4. The Advantages of Software Development Outsourcing

When you hire outsourcing partners, the common practice is that you sign a contract for the execution of well-described technical tasks or delegate your entire software project development. Undoubtedly, doing this open the door for many advantages coming your way. Your in-house team gets the exponential freedom to concentrate on core business tasks depending on the industry it operates in and look for investment opportunities. In contrast, an experienced team of technical specialists concentrate on the software and gives you regular updates on the progress.

Another advantage you automatically get when you outsource software development is that you lower your costs, which is always a strategically important move as saved expenses can be invested in marketing campaigns or R&D. Still, your vendor parents can bring so much additional business value besides lowering development costs such as promote innovation, increase product scalability and flexibility, giving you a solid competitive advantage.

5. The Disadvantages of Software Development Outsourcing
   

This article wouldn’t be fair if it didn’t include the downsides of outsourcing. Similar to just about every major decision in life and business, there are also some trade-offs that you make when you opt for outsourcing. One of the issues that can occur involves trouble with distance management. We’ve all survived 2020 and learned valuable lessons about how remote teams should function optimally, so this potential disadvantage should easily be avoided.

Your business runs another potential risk if your selection process is not optimal, as communication is vital for any project success. In most cases, communication between in-house IT departments and outsourced teams can take more time than offline meetings in the office. If the company you choose to trust doesn’t have smooth project management skills, poor communication is destined to slow down the development process and, ultimately, software release.

Aleksandrina is a Content Creator at Dreamix, a custom software development company, and is keen on innovative technological solutions with a positive impact on our world. Her teaching background, mixed with interests in psychology, drives her to share knowledge. She is an avid reader and enthusiastic blogger, always looking for the next inspiration.