What is software development outsourcing?
Software development outsourcing is increasingly popular across a wide spectrum of businesses, from innovative startups to established multinational corporations. The approach allows these organizations to tap into a vast global pool of talent, accessing specialized skills and knowledge that might not be readily available within their local area or in-house teams.
Outsourcing is often viewed as a strategic move that can enhance operational efficiency. It enables companies to better focus on their core business activities by delegating technical software development tasks to dedicated software outsourcing companies. Furthermore, it offers flexibility in scaling operations based on fluctuating business needs without significant investment in infrastructure or workforce management. These reasons, among others, make outsourcing software development an attractive choice for companies seeking to scale their business.
Examples of common software development outsourcing services include:
- Custom software development: Work with an outsourcing software development company to build tailor-made software solutions to meet specific business requirements. Typically it implies fully outsourcing the software development from end to end.
- Web application development: This service includes building web-based applications, ranging from simple websites to complex platforms like content management systems. In this case, you should expect web or mobile app development services.
- QA and Software Testing: Outsourcing can go beyond just software development services. Many software outsourcing companies also offer QA and testing services to ensure the reliability and stability of software. You can expect teams to use various testing methods to help to identify and rectify any flaws or bugs.
- IT Consulting: Software development outsourcing companies provide guidance on technology strategy, digital transformation, and IT infrastructure, aiding businesses in leveraging technology effectively for growth and competitiveness.
Read More: 5–Step Proven Process How to Outsource Software Development
Why do companies choose software outsourcing?
Companies today are increasingly turning towards software outsourcing as a strategic business decision, driven by a host of compelling benefits that working with an experienced software outsourcing company provides. This approach not only accelerates the development process but also opens up a broader pool of talent and expertise, often resulting in superior quality outputs. When you work with outsourcing software development companies, you can expect to:
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 utilize outsourcing services, 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.
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 working with an outsourcing software development company 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.
Read More: 7 Key Reasons Why Companies Outsource Software Development
What should I do to prepare to outsource software development?
Increased productivity, improved product quality, and cost savings are just a few of the advantages of outsourcing software development. However, you cannot effectively outsource software development without careful preparation, and developing a sound outsourcing strategy is the first step in hiring a software outsourcing company to meet your demands. We recommend you follow this process to ensure your team is in the best state to successfully prepare for outsourcing software development:
Define your goals: When preparing to outsource software development, it's crucial to specify the outcomes you want the project to achieve, which could range from developing a new application, improving an existing system, or solving a particular business problem. Project stakeholders play a significant role in this process. These stakeholders include your company's leadership, end-users, customers, and anyone else who will use or be directly impacted by the final product. In certain cases, depending on the nature of the outsourced project, you might even have stakeholders outside of your organization.
Prepare scope of work documentation: There’s no point trying to reach out to a custom software development company if you have not prepared the plan. They’re going to want to know your budget and your requirements, and good documentation is the best way for this. Take the time to work with your stakeholders and put together a thorough SOW document that you can share with potential software outsourcing companies.
Consider your technology stack: If you're augmenting an existing system, you need to consider the current technology stack. Can it support the new project, or do you need to introduce new technologies? Also, ensure the new technologies will be compatible with your existing stack. Taking a look at your technology stack can also help you find the best software outsourcing companies who have experience working with your particular platforms or services.
Know your priorities: Before you embark on the journey of software outsourcing, it's crucial to understand and define your priorities. What aspects are most important to you? This could include factors such as budget, quality, development speed, the specific experience or expertise of the outsourcing partner, the geographical location of the partner, their time zone compatibility, or their capacity to scale. Defining your priorities will guide your decision-making process and help you identify the best outsourcing partner that aligns with your needs and business goals.
Create an evaluation matrix: This is a systematic approach to assessing potential vendors. The matrix should contain all the critical factors you've identified as part of knowing your priorities. You could include factors like cost, technical expertise, portfolio, communication efficiency, project management style, client reviews, and availability. Score each vendor on these parameters. This matrix will provide a visual and numerical guide that makes it easier to compare different vendors, helping you make an informed decision. Remember, this matrix should be tailored to fit your unique needs and priorities.
Assemble a vendor selection team: Forming a dedicated team to handle the vendor selection process is beneficial, particularly for larger projects. This team can include members from different departments, such as project management, finance, legal, and IT. Each team member will bring a unique perspective to the process. For instance, a project manager will look at a vendor's ability to meet deadlines, while the legal department will ensure the vendor meets compliance requirements. The team can work together to evaluate vendors using the evaluation matrix and select the best fit. This cross-functional collaboration ensures all aspects of vendor selection are covered and leads to a well-rounded decision.
Remember, clear communication within your selection team is key to a successful vendor selection process. Ensure that all team members are aligned on the priorities, evaluation matrix, and the final goal of selecting the best outsourcing partner.
Read More: Software Development Planning - Perfect Project Plan in 10 Steps
How to choose the right software development company?
Once you’re done the work to prepare to work with a software development company, you might be wondering how to find the right one. Choosing the right software outsourcing company is a critical business decision, given the considerable time, capital, and resources at stake.
With a plethora of choices available - over 23,000 custom development services listed on Clutch.co alone - making the right choice can be daunting. However, after you've determined your project's objectives, timeline, and the specific skill set necessary for its successful completion, it becomes easier to filter and select suitable software development outsourcing companies.
A leading software outsourcing company will have the following attributes:
- Comprehensive portfolio: Look for a company with a comprehensive portfolio that displays their proficiency and experience in providing custom software development services across a wide range of projects.
- Deep industry insight: Choose a firm that not only has technical expertise but also in-depth knowledge of your industry, understanding your business requirements and the market landscape.
- Collaborative mindset: It's important that the outsourcing company that you choose sees themselves as an extension of your team, prioritizing your business objectives, instead of just acting as a service provider.
- Excellent communication skills: Strong communication abilities are essential to ensure seamless collaboration and successful project execution. The software development company’s in-house project managers should be prepared to provide the level of communication you desire. When in doubt, ask detailed questions about the level, type, and frequency of communication that they can provide.
- Strict security measures: The ideal partner should not just provide software development services, but should also maintain stringent security protocols to protect sensitive project data and ensure the security of the final software product.
- Structured organization and efficient team: A company with a well-organized structure and efficient team dynamics is more likely to prevent miscommunication and project delays. Look for a software development outsourcing company that is forthcoming about their team dynamics and overall company structure.
Remember, choosing the right software development outsourcing partner can also be a strategic move to overcome common outsourcing challenges such as cultural differences, time-zone issues, and quality control. By finding a firm that fits these criteria, you are taking a significant step towards the successful realization of your project.
Read More: How to Choose a Software Development Company in 10 Steps
Why do companies outsource software development to Eastern Europe?
One of the most sought-after destinations for top software outsourcing companies is Eastern Europe. If you are looking for quality over quantity, then Eastern Europe provides world-class software development and consulting services that are on par with other outsourcing destinations such as Asia, South America, and Southeast Asian nations. Some of the key benefits you can expect when working with a software outsourcing company in Eastern Europe are:
Skilled and Competent Workforce
Eastern Europe has a highly skilled and competent workforce who can work on innovative projects. The software engineers from Eastern Europe have the experience and knowledge to provide IT solutions on par with the rest of the world. The empowerment of Technical and IT Education in Eastern Europe has drawn people from around the world for access to world-class quality education.
Strategic Geographical Location and Smaller Time Zone Gap
The advantageous geographical positioning of Eastern Europe results in smaller time zone differences, facilitating smoother collaboration with clients from all around the world. Thus, when you outsource your software development projects to a company in this region, you can anticipate a more manageable time zone disparity, leading to more convenient working hours.
Adaptability to Cultural Differences and Language Barriers
Teams in Eastern Europe are able to collaborate with remote teams in other countries due to their ability to communicate in English and accommodate cultural differences.
Dynamic IT Community
Several top-tier software development companies have established their international offices in Eastern Europe, attracted by the region's rich talent pool, cost-effective operations, and strategic geographical placement. Additionally, Eastern Europe has emerged as a powerhouse for IT and web development research and development (R&D) centers. Presently, the region serves as a gateway to over a million IT professionals.
Cost-Effective IT Solutions
In comparison to Western Europe, the USA, and Canada, the cost to outsource software development to Eastern Europe is much lesser given the economic conditions of the nations in this region. This is cost-effective for the customer and even the vendor outsourcing the IT solutions.
Eastern European countries conform to the same regulatory standards as the broader European region. This compliance extends to observing copyright laws, honoring non-disclosure agreements, and enforcing established policies like the General Data Protection Regulation (GDPR).
Read More: Software Development in Poland - Hire Team in 4 Simple Steps
What are the common engagement models software outsourcing companies offer?
The complexity and diversity of software development projects mean there isn't a one-size-fits-all approach to outsourcing. The ideal model for you will be contingent on several factors, such as the scope of your project, your objectives, team structure, and available resources. Generally, there are two predominant models utilized in software project outsourcing:
Managed Team Model: In the Managed Team Model, responsibility for the project is a shared endeavor between your company and the outsourcing agency. The outsourced team usually reports to your company's Project Manager (PM), Chief Technology Officer (CTO), or another designated project leader. The specific division of project management duties is established in the early stages of the collaboration, with the aim to distribute ownership of the project equally.
Project-Based Model: The Project-Based Model takes a more hands-off stance for your company. In this model, the outsourcing agency assumes total responsibility for the project, overseeing the entire development cycle from start to finish. The outsourced team operates independently and does not report directly to you. While you'll be integral in outlining the specifications at the outset, your engagement will lessen after this initial phase, allowing the agency to manage the subsequent stages autonomously.
Our team at SoftKraft would be happy to review your outsourcing needs and suggest the model that will serve your business best. You can reach out to us directly.
Read More: Software Development Outsourcing Models — Which Is Best?
How much time do you need to deliver a custom software solution?
The entire software development process can take anywhere from a few weeks to 24 months. It really depends on the complexity of the software solution that needs to be built, or in the case of an integration project, the complexity of the integration work. To give you a better idea, here are a few examples:
Simple data integration project will take about 2 to 4 weeks. Our development team tracks their time worked using 3rd party work-logging applications. To streamline project billing, we have built a custom application in less than 1 week using Active Admin and implementing two API integrations. It connects the data and allows us to issue error-free invoices to all clients faster. It was later extended to have more functionality.
And a complex custom web application project will take anywhere from 4 to 24 months - see example here.
The precise cost to outsource software development services is determined by the complexity of the services we render and the experience level of the involved team members. Acknowledging the importance of a well-defined project scope and budget, we offer our clients the following as part of our software development services:
Detailed Budget Forecasts: We provide our clients with in-depth cost estimations, empowering them to plan accurately for their software development project expenses.
Consistent Progress Reports: Keeping in line with our dedication to transparency, we keep our clients in the loop with regular updates about the status and progress of their software development projects.
Seasoned Project Management: Harnessing our vast experience in project management, we equip our clients with the necessary budgeting tools and management strategies to ensure their software development project stays on track and within their budget constraints.
Worthwhile Investment: At SoftKraft, we abide by the commitment to deliver the utmost value for your investment. We measure our success by your satisfaction.
Ultimately, our objective is to deliver top-tier custom software that aligns with our clients' needs and budget constraints, meeting their technical and business requirements - all within budget. We invite you to reach out to us for a detailed project estimate. Contact SoftKraft today to kick-start your journey toward a custom solution tailored to your specifications!
Read More: Web Application Development Costs in 2023 + Estimation Template
How can I save money when outsourcing software development?
There’s no doubt about it: software development can be expensive. Simply choosing to outsource software development instead of hiring in-house developers can help save money, but we often get asked how clients can save money throughout the outsourcing process itself.
And, we understand why this is so commonly asked! By reducing your software development costs, you can free up resources to invest in marketing or future feature enhancements to benefit your users. This can help to increase your profits long-term. After 15 years in the industry, we’ve seen these 4 methods help companies of all sizes reduce their software development costs, all while not sacrificing quality:
Start with an MVP: Starting with a minimum viable product allows you to focus on the core features of your product and help you save money on the software development cost. By focusing on the essential features, you can avoid spending money on unnecessary development costs while still having a useful product. Focusing on an MVP can also help you test the waters with a software development company, and not overcommit resources up front.
Lock the UI before development: Locking the UI before development helps ensure that all stakeholders are in agreement on the design and functionality of the software before any code is written. This reduces the amount of back-and-forth revisions and eliminates the need for costly changes down the line. It’s always cheaper and faster to make changes during the design stage! Spend the money up front for high quality UI UX design and you’ll save money down the road!
Outsource to Eastern Europe: Outsourcing to Eastern Europe is an affordable way to hire custom software development companies who are highly skilled and experienced, while still keeping costs low. It also allows you to access a larger talent pool and access to resources that would usually be too expensive to hire locally.
Limit change requests: Limiting change requests from stakeholders throughout development can help save money by reducing the amount of time and resources needed to accommodate them. It also helps focus development efforts on the original goal, ensuring that the web app is completed on time and within budget. It’s all about knowing the plan up front and sticking to it throughout the software development process!