How to Choose a Software Development Company in 10 Steps

9 min read
How to Choose a Software Development Company in 10 Steps

The stakes are high when you’re investing significant capital, resources, and time into an outsourced software development project.

You want to choose the right vendor, but with over 23,000 companies offering custom development services on alone, the sheer number of options can be overwhelming.

With the 10 steps we’ll walk through below, you’ll learn how to choose a software development company that’s right for your project. This due-diligence will take time, but it’ll pay off when you achieve your outsourcing goals.

Define project objectives and timeframe

Before you hit send on an email to a custom software development company, define your project objectives and timeframe requirements. You need to have a clear idea of what you want to build. Without this, you risk a lot of wasted time on both sides.

Now, don’t think you need to have _everything _defined at this stage, but you should have a decent plan laid out before you get any further. A simple list of requirements along with basic mockups, diagrams and/or workflows is a good place to start. It can also be helpful to assess the general technical skills that will be needed.

This work will help you avoid trying to describe an abstract concept to the development teams. You do not want to have teams misinterpret your vision. This will likely lead to inaccurate budget and timeline estimates.

Take the necessary time in this stage before moving on!

PRO TIP: Hire a technology expert or interim CTO locally or remotely. This person can help you manage the project from your end. Check out CTO as a Service for on-demand technical leadership services.

Find software development companies

You have defined your project objectives, timeline and the skills required to complete your project. Now it’s time to build a list of potential software development companies.

There are plenty of resources where you can find software development companies:

  • Use Google to search for software development companies. Both paid and organic results can be helpful. From individual company websites you can get information on their software development services, industries they work with, their previous clients and their work processes.
  • Browse software development review and rankings websites. One of the most popular of them is Clutch. You can view the search results by location, minimum project size, average hourly rate, industry focus, and more.

While surfing company websites, gather as much information as possible. Some things you’ll want to look for:

  1. Company size and structure
  2. Company focus and strategy
  3. Experience with similar projects
  4. Average hourly rate + any overhead required
  5. Workflows and business practices
  6. Technology expertise
  7. Services available

You likely won’t find all of this information on company websites, but you can get a good head start even before you reach out. When you find a company that feels like a good fit, add it to your long-list.

Key Elements Of Software Company

Once you have your long-list, start reaching out via email. You should request a portfolio from developers as well as brochures or information packs.

PRO TIP: Large firms often have multiple layers of management, which can leave a lot of room for miscommunication and unnecessary overhead. Smaller firms often avoid these issues.

Check their portfolio and experience in your domain

This is where you start your comparison of software development companies on your long-list. You can utilize the portfolio provided by the software development firm itself as well as customer reviews. Reviewing a project portfolio serves several purposes:

  • It allows you to see if the software company has done something similar to what you require.
  • It gauges the level of experience the company has.
  • It lets you understand the scale of jobs the company has done and if they are able to handle your task.

You should focus on if the company has relevant experience. An outsourcing partner should clearly understand your industry, market, and/or business process. Be cautious if a software development company claims to have experience doing something similar but they can’t share any information.

It’s true that outsourcing companies may not always be able to share their previous projects due to non-disclosure agreements. However, they should at least be able to give you a broad outline of their previous projects, how they were developed, and how they benefit the clients.

Make sure they act as a true partner

Expertise in specific technologies, tools, and programming languages is necessary to create a decent product especially in the software development industry. But this is never enough to create a great product. The best software development company will act as a true partner rather than simply an external agency.

Any decent outsourced company should really understand your business needs. Simply understanding the desired product functionality is not enough. During the course of development, you want them to be in true alignment with your end goals, so they can make better decisions on the fly.

True Software Partner

Ideally, they should invite business analysts to assist in developing requirements to guarantee a successful software product. If your potential software development partner doesn’t take the time to really understand your needs during the sales process, we advise you to move on.

PRO TIP: the more questions they ask, the better. Pay attention if your partner wants to make sure that they’re on the same page as you on the business requirements.

See if they specialize in what you need

Oftentimes, a software development company will be comfortable using certain technologies and specialize in creating applications/solutions with them. We recommend you:

  • Choose a software development company that keeps up with the latest technological advancements. New ideas and innovations are a must. The software development company you select should have a strong desire to stay in front of any new updates and changes to their technology stack.
  • Pay attention to their software developers’ expertise. As you ask technical questions, you’ll get a sense for their technical knowledge and competency.
  • Find a company that specializes in what you need. This also means avoiding companies that have a multitude of specializations because no one is an expert on everything.If you need your solution built on Node.js, then review companies that focus on Node.js.

PRO TIP: Start with a small project. See what you think of the working process and final result. If things don’t go the way you envisioned, then move on.

Assess the partner communication style

Software development is a complex process. Communication challenges will make it difficult every step of the way, from defining requirements to working out stakeholders and users feedback.

Good communication skills are key to a good working relationship and a satisfactory end software product. It is always helpful to be able to discuss, share, and clarify different ideas over the course of the development process. This way, you know that both you and the dev team are always on the same page.

Be very aware of how the team communicates over email as well as during the first phone or video calls. This will likely give you a sense of if their communication style fits with your expectations.

PRO TIP: Poland has one of the largest IT talent pools in the world and serves as a research and development hub.

See Why choose Team Augmentation in Poland?

Check their development methodology

Does the company use Scrum or another Agile approach? Do they use a totally different development methodology? Having a well-documented and well-executed project development process in place will improve efficiency and help the team tackle challenges that pop up along the way.

Good Development Methodology

The development methodology should be based in adaptive planning, early delivery, frequent project updates, and modern communication tools. This will help you stay informed at every stage of project development.

PRO TIP: Every company understands agile methods a little differently, so you should have everything clarified early.

Learn more Custom Software Development Process and 7 Mistakes to Avoid

Request their security practices

Having a partnership with a right software development company means there will be a transfer of sensitive information. You will need to know how the company handles this and what measures are in place to make sure both your idea, product, solutions and confidential materials are not handled inappropriately.

You should also consider how to secure the solution being developed. Does the development team have appropriate security practices in place? What security level needs to be adopted? Not all development agencies will handle security concerns equally, so make sure you ask detailed questions.

Learn more Secure Software Development Lifecycle [Practical Guide]

Examine company structure and team dynamics

It’s important to understand a company’s business structure and development team dynamics. You should have a sense of how a company is organized, what roles different team members hold, and how team members work together.

Company Structure And Team Dynamics

It’s advised to avoid doing business with custom software development companies that don’t have formal team structure. When an organization has clearly defined roles, working dynamics will be more efficient. It’s really all about avoiding any unnecessary overhead that can come from a disorganized team.

See also How To Manage Offshore Software Development

Ask about testing and software maintenance

Before you sign a contract with any software development company, you should have a sit-down and understand what their policy is on testing. You want to understand how they conduct testing throughout all stages of development.

You should also consider if backup services, support and maintenance will be included in the original contract. And if so, how long will these services be handled by the development team?

You do not want to be told down the line that there will be no support or left with a huge maintenance bill for your project. It’s best to have all these details worked out before you commit to using any one company.


Every software development company is a little different. What’s most important is that you find a team that is a good match for your custom software development project. You should consider not only the technical skill sets but also cultural and project management aspects to the team.

Take the time to compare and evaluate your options. If none of them is a fit, don’t be afraid to toss out the list and start over. It’s going to take time, but the work you put into vetting software development companies up front will pay off in eliminating stress and resulting in a quality end product.