5–Step Proven Process for Successful IT Projects Outsourcing

12 min read
5–Step Proven Process for Successful IT Projects Outsourcing

Software project outsourcing allows you access to a diverse pool of tech talent that can allow you to move your project quicker and in a more cost-efficient way.

In fact, 70% of companies outsource software development to save money.

But outsourcing is not without risks. Choosing the wrong outsourced development team can lead to unnecessary costs, project delays, and a poor overall product, all of which we are sure you will want to avoid.

And this is where we are here to help. Will break down all the industry knowledge you need to know and provide you with the proven process for successful IT project outsourcing.

What is software project outsourcing?

Outsourcing software development is a business strategy of delegating software development projects to an external software outsourcing company instead of executing it within in-house capabilities.

This could look like outsourcing some or part of a software development project. It could also involve continuous, direct management of the project. Or, it could involve offloading the majority of the project management to the hired company.

The benefits of software projects outsourcing

It’s important to understand why you are looking to outsource software development services. When you’re clear on your why, you can hire a team that will fit with your goals.

Let’s take a look at a few of the most common benefits that teams see when outsourcing software projects.

Benefits Of Software Projects Outsourcing

Access highly-skilled developers

Outsourcing software projects allows you to access highly-skilled software developers with the exact skills you’re after. You can avoid investing in time-consuming internal upskilling.

When you outsource a software project, you have the flexibility to source top talent from anywhere in the world. You aren’t constrained to an internal talent pool - or even a talent pool within your local area or country.

Reduce costs

Hiring developers comes with a lot of overhead. Sometimes it’s worth it, but for some projects, staffing up an in-house team is simply too expensive.

Software outsourcing companies allow you to quickly gather all necessary software development specialists and the on-demand model.

You can reduce costs by avoiding all those pesky onboarding, training, and upskilling costs. You’ll also reduce costs by outsourcing software development in more affordable global regions such as Eastern Europe.

Speed up development

Let’s face it, you want to get to market fast. You likely have a lot of internal pressure to deliver quickly.

Staffing up an in-house team can be expensive, but it can also be very time-consuming. It’s simply impractical if you want to deliver a project quickly.

With the right outsourced software development agency, you can get a project off the ground in a matter of days or weeks. Development speeds can also be adjusted based on how many full-time or part-time team members are put on the project. In many cases, you can drastically control delivery timelines by adjusting the team size.

What are the models for software outsourcing?

There are many software development outsourcing models you can use depending on your needs.

There is no right or wrong model across the board. What will work best for you will depend on things such as your project scope, project objectives, team structure, and team availability (or lack of).

The two main models for software project outsourcing are Managed team model and Project-based model.

Managed team model

In the managed team model, project ownership is shared between the client and the outsourced agency. Think about this model as part way between software team augmentation and the project-based model we’ll talk about below

Typically the hired team reports to the client’s PM, CTO, or other project owner. Exact delegation of project management will be determined by the teams early on, but the idea is to equally share ownership of the project.

This is a great model to use when:

  • You want to maintain control of the decision making.
  • You have time to be involved in the day-to-day aspects of the project.
  • You require additional technical expertise, but have some available in-house.

Project-based model

The project-based model is a more hands-off approach. The outsourced agency takes on full responsibility for the project. They own the development cycle from beginning to end.

In this model, the outsourced team will not report to you. You’ll be heavily involved upfront in defining the specifications, but after that, your involvement will be more limited.

This is a great model to use when:

  • You want to provide the developers a high degree of flexibility and ownership.
  • You have limited time to manage the project yourself.
  • You have a very clearly defined scope of work and simply need a team to execute to it.

5-step proven process for successful software project outsourcing

You might know what end product you want. You might even know what kind of skills you want a development team to have. And maybe even what model you’d like to use to work with an agency.

But what about all the other details that will inevitably come up throughout the process? Follow these 5 steps and you’ll be well on your way to a smooth outsourcing process.

Process Software Project Outsourcing

Select a working model and project leadership

It’s critical early on to agree to a working model. This will guide how you will interact with the software agency throughout the project. Depending on the model you choose, you may opt to have a project manager staffed in-house or within the agency.

Consider the following questions:

  • Will you or the software agency staff a project manager? This decision may depend on the working model you choose as well as the amount of time your team can devote to the project.
  • Who will act as the project owner? Regardless of if you will do the day-to-day project management, you’ll want to have a key person who acts as the decision maker on your side.
  • Who will be answering the development team’s questions on a day-to-day basis? This could be the project owner or someone else.
  • Who needs to be involved in approving sprints or milestones? This might be internal management, product managers, or your CTO.
  • Do you have tech support available or do you expect the software agency to provide ongoing tech support?

Follow project management methodology

Using a defined project management methodology is really important. Any professional software development outsourcing company should have an established process they use such as scrum or kanban.

Ensure your team is clear on the tool sets being used and the frequency of engagement to expect with the chosen project management methodology.

Establish a feedback loop

Providing feedback throughout the software development process is critical. Open feedback among developers, testing engineers, project managers and product owners on your side will help keep the project on task and on schedule. Early feedback will help eliminate costly fixes later.

It’s important to understand the best way to provide the software agency feedback on their work.

Set up a communication schedule and format

Early on, you should establish a consistent communication schedule with the software development company.

How often will you meet? This could be daily, weekly, or even bi-weekly depending on the working model.

What will the meeting format be and who will be invited? Try setting up recurring meetings on a video platform like Google Meet or Zoom.

How will you communicate outside of established meetings? Try an informal chat platform like Slack for regular communications.

Measure development progress

With an established working model and project management framework you should have a clear idea from the get-go of when you’ll have team check-ins, status updates, and/or demos. You should also know when to expect the team to hit project milestones.

Even if you aren’t owning day-to-day project management, it’s important to keep an eye on the established milestones and the high-level project schedule. Be sure to alert the team if you have any concerns about the project’s progress.

The more open you are about any concerns you have, the more likely everything is to remain on-schedule.

How to find the right software development team?

Liking the sound of hiring an outsourced software development team? We thought you might.

Take a look at our step-by-step guide to secure the right software development team for your next outsourced project.

Find Software Development Team

Define project objectives

You’re not going to be able to find the right developers if you’re not 100% sure what you want your end product to be. Take the time to clearly define the project’s objectives. Run your plan up the chain internally before engaging with external teams.

The more clear your project’s objectives are, the better. A clear set of objectives helps everyone stay focused throughout the project.

Prepare scope of work (SOW) documentation

After establishing project objectives, you need to develop a detailed Scope of Work (SOW). Development teams will want to know your technical and functional requirements. Need a little more help?

Check out Starting a Software Project — Complete Guide to Project Planning.

As part of your Scope of Work you should have a project budget and timeline. This will help development teams understand clearly what you’re looking for.

Research the best software development outsourcing companies

The right software development agency is going to vary from company to company and project to project based on the needs of each assignment. It’s important to take the time to find suitable software development companies. You could do this through your own personal network, through sites like Clutch.io or by simply Googling.

You may want to make a shortlist after you have done these things. Now, it’s time to filter that shortlist down and find the best one for the job. This can be done with a little more research. This research may seem a little tedious, but it will have huge implications if you get it right! The research you could try is as follows:

  • Checking the company itself. Refer to the ‘High-quality Service’ section of this article for how to do that. A key thing here is to look at their portfolio to see if any of their previous work is similar to your own.
  • TrustPilot, Google Reviews and other comparison sites
  • Contact companies who have worked with your developer of choice. Past clients will give the most honest truth

Contact software development agencies about your project

It’s crunch time. You’re about to reach out to your agency of choice. There’s no harm in approaching two or three at this stage if you’re not sold on just one.

Schedule a video or phone call with the company by reaching out to them via email. Being able to see someone or at least hear their voice will help establish a personal relationship and give you a feel for what they are like.

Before you get into that call, take a look at some of the key topics of conversation that you may wish to bring up:

  • Communicate your project objectives. This is where clear documentation comes in handy. Already knowing clearly what your project objectives are will really help at this stage. You want to give the company a picture of what you’re looking for, so they can tell you if it’s a good fit or not.
  • Understand their working model and software development outsourcing process. Ensure it works with the level of involvement you’d like to have.
  • Discover whether they have similar experiences with prior clients. Getting some work samples or case studies will help determine if it’s a good fit.
  • Find out more about their team. What are the team’s skill sets and strengths? How many team members are available to work on your project?
  • Enquire as to what they expect the delivery timeline to be. Does it fit within your expectations? What’s the schedule risk level?
  • Get a budget estimate. Depending on the scope of the conversation, you may be able to get a rough idea of the budget required.
  • Understand the contract specifics. What happens if you aren’t happy with the way the project is going? Is licensing required? Is testing support included?

    If all of these questions check out, it’s time to negotiate the budget, timeline, and project milestones. After that, you’re ready to sign the contract and kick off your project!

Software project outsourcing with SoftKraft

Need to craft an end-to-end software application with the help of a complete cross-functional team? At SoftKraft we provide Full-cycle Software Product Development. We minimize your workload by providing complete project management during the development. Project success is the only metric that really matters to us.

  • Engage quality tech professionals

    15+ years of experience in engineering custom software solutions for startups and SMEs.

  • Results-driven design thinking

    Design Workshops to clarify your business idea and build a much better product faster.

  • Business-minded engineering

    Work with engineers who understand the need for bottom-line results from tech initiatives.


There are countless benefits to outsourcing software development for your next project. Software outsourcing services allow you to access a highly-skilled software development team to get your project developed and launched faster and cheaper than with an in-house team.

With the right team, it’ll be smooth sailing from initial consultation to project launch!