Software Development Outsourcing Guide

If you are operating your business in this technology-dominant era, you are probably aware of how crucial software is in daily operations. The fact is that it is not easy to truly understand Software Development Outsourcing and to pick out the best partner for such an important task.

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What Is Software Development Outsourcing?

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Software Development Outsourcing, as the name can tell, refers to the practice of paying an individual, a team, or a company to handle the full process or just a part of software development. Those who consider employing this methodology often can take advantage and make use of a large body of IT talents who may not be easily found in their own country. Another key benefit of this outsourcing is the significant saving of time and money, allowing the company and its employees to leverage their resources for major business operations. Moreover, what makes this method invaluable is that it can grant you access to cutting-edge technology for your software projects by hiring a dedicated software development team or just one dedicated developer.

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The Essence of Software Outsourcing Development

For a lower expense and effort, businesses should opt for Software Development Outsourcing as it is deemed reliable and effective. That being said, although this practice brings an array of benefits, it is indeed not completely risk-free.

Advantages of Software Development Outsourcing

  • Lowered recruitment efforts and expenses
  • Fast project kick-off
  • Access to required resources at will
  • Optimized management
  • Adjustable team scale

Disadvantages of Software Development Outsourcing

  • Less management over the project
  • Unexpected gaps in communication
  • Possible breaches of security

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How Do You Successfully Outsource Software Development?

There exist a few things that need careful consideration regarding successful Software Development Outsourcing. Regardless of the project scale, keep the following in mind to ensure the expected outcome. See how HDWEBSOFT solved time zone challenges in offshore software development with daily reports, escalation paths, and flexible communication hours.

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Paying close attention to communication

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Attending to processes and procedures

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Providing frequent and detailed feedback

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Making a clear and comprehensive brief of Software Development with the end result idea and timeframe

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Setup for Software Development Outsourcing

The arrangement for the outsourcing process is sometimes time-consuming as it may take up to a few months to complete. This largely depends on the selected model of outsourcing, the capability of the partner’s initiatives, your ready preparation for such processes, and more.

Step 1: Decide whether to outsource or not

To make an informed decision for Software Development Outsourcing, conduct feasibility analysis which include the following steps:

Barrier Identification

Identifying the barriers in your existing process of software development

Scope Decision

Deciding whether you need to outsource a whole or a part of the software project

Cost Comparison

Making a comparison between in-house and outsourced software development in terms of TCO (Total Cost of Ownership)

Choosing the most suitable method of software outsourcing services:

Team Augmentation

You just hire professional software developers from a partner to carry out your project. In this way, they work under your management. You can choose to employ as many software experts as you wish, from 0.5 to 100+ FTEs (Full-time Equivalent).

A Dedicated Team

With this option, an IT partner will designate a dedicated development team to handle your outsourced project. The partner, you, and your other vendors are equally responsible for the quality and for handling any risks that may occur.

Full Process Outsourcing

An IT partner will perform the whole process of software development with end-to-end responsibility for team formation, management, quality control, and possible risks involved.

Choosing the most suitable method of software outsourcing services:

Team Augmentation

You just hire professional software developers from a partner to carry out your project. In this way, they work under your management. You can choose to employ as many software experts as you wish, from 0.5 to 100+ FTEs (Full-time Equivalent).

A Dedicated Team

With this option, an IT partner will designate a dedicated development team to handle your outsourced project. The partner, you, and your other vendors are equally responsible for the quality and for handling any risks that may occur.

Full Process Outsourcing

An IT partner will perform the whole process of software development with end-to-end responsibility for team formation, management, quality control, and possible risks involved.

Step 2. Choose the best outsourcing company

Take into account the following factors when considering potential partners:

Partner Expertise

Expertise and experience in Software Development Outsourcing presented on the partner's website

Client Testimonials

Their collaboration methods and experience are found in testimonials and reviews by their clients, especially from independent search agencies

Location & Time Zone

Their region (onshore, nearshore, offshore) and differences in time zones

Culture & Language

Similarities in culture and language to ensure smooth collaboration

Dev Infrastructure

The development infrastructure of the IT vendor including hardware, network and bandwidth

Quality & Security

Capability of project management, quality control, and security management evidenced by ISO 9001 and ISO 27001 certificates

Compliance Standards

Expected compliance with standards and rules such as HIPAA, FDA, PCI DSS, et cetera

Pricing Options

Offered pricing options such as Fixed Price and Time & Material

Maintenance & Support

Availability of software maintenance and support choices

Step 3: Set up the outsourcing procedure

Team Augmentation

Send the chosen IT partner a recruitment request with required skill sets and FTEs, review CVs, interview candidates, and sign the SLA.

  • Send the chosen IT partner a personnel recruitment request with a specific list of skill sets and required FTEs.
  • Ask for CVs and rates of available software developers.
  • Arrange interviews with potential candidates.
  • Set up a test task for the potential IT specialists (optional).
  • Discuss SLA (Service-level Agreement) including punishments for security breaches.
  • Sign the contract.
  • Perform the necessary orientation and knowledge transfer to the outsourcing force.
  • Provide access to the project infrastructure to the remote developers.
  • Agree on the networks for communication between the outsourced party and the remainder of the project team.
  • Fix the schedule for weekly or monthly reports on performance evaluation.

A Dedicated Team

Send a recruitment request to your IT vendor, define KPIs together, discuss SLA terms, and sign the contract for a dedicated development team.

  • Send the chosen IT vendor a recruitment request to acquire the proposal with service options, development methodologies and et cetera.
  • Ask for the estimation of the project scale and required efforts to carry out it.
  • Along with the partner, set KPIs and keep track of the outsourced development team performance.
  • Discuss SLA including punishments for security breaches.
  • Sign the contract.
  • Perform the necessary orientation and knowledge transfer to the outsourcing force.
  • Provide access to the project infrastructure to the remote developers.
  • Agree on the channels for communication with the outsourced dedicated team.
  • Fix the schedule for weekly or monthly reports on performance evaluation.

Full Process Outsourcing

Send your outsourcing request, review estimates, discuss SLA and KPIs, then sign the contract for end-to-end project delivery.

  • Send the chosen IT partner a Software Development Outsourcing request.
  • Ask for the presentation of estimates for technological solutions, service options, development methodologies and et cetera.
  • Acquire the following from the partner: examination of all needed software development and support, judgment for the project scale, analysis of your existing development and testing processes and a viable service delivery plan.
  • Discuss SLA, KPIs such as planned budget VS spent budget, metrics for user satisfaction, metrics for security and application dependability.
  • Sign the contract.
  • Perform the necessary knowledge transfer to the outsourcing force.
  • Discuss with your IT vendor to arrange the development process, carry out CI/CD if necessary, and accommodate the processes of development and deployment from other partners if needed.

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Pros and Cons of Each Type of Software Outsourcing Development Model

Team AugmentationA Dedicated Development TeamFull Process Outsourcing
Pros
  • Great adaptation to changing projects needs thanks to adjustable project scope
  • Prompt access to specific skill sets
  • Direct management over the development procedure and team performance
  • Short time for onboarding (up to 2 weeks if the vendor gets the required resources available)
  • Short time to launch the project (up to 2 days if the partner already has an assembled team that needs little adjustment to meet your project requirements)
  • The vendor’s provision of team leader or PM to coordinate the work of the outsourced developers with little or no guidance from your side
  • Marginal management efforts on your side
  • Assured quality of project outcome and timeline arrangement with punishment for agreement breaches
  • Access to the long-established development processes of the chosen partner
  • Project-associated risk management on the IT vendor’s side
Cons
  • Your comprehensive responsibility for possible project-related risks
  • Your complete efforts for onboarding and management
  • Major risks of unexpected communication gaps and collaboration challenges
  • Risks from wrong choice of IT vendor
  • Your partial responsibility for team coordination and project risk management
  • Temporary underperformance of the incomplete newly-formed team during the first 2-4 weeks
  • Lengthy setup (up to 4 weeks)
  • The highest vendor-related risks

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The IT partner’s side

Team AugmentationA Dedicated TeamFull Process Outsourcing
The IT partner’s sideSingle/ multiple developersSoftware developers, DevOps engineers, Project manager/team leaderProject manager, BA, UX/UI designers, Developers with a Team Leader, Testers, DevOps engineers, Support engineers
Your sideProject manager, BA, UX/UI designers, Developers with a Team Leader, Testers, DevOps engineers, Support engineersProject manager (for the partner’s PM/Team Leader to report to), Developers (optional), DevOps engineers (optional), Support engineersIT manager
Shared by both parties—BA, UX/UI designers, Testers—

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Costs for Software Development Outsourcing

The following aspects define the cost of Software Development Outsourcing:

  • The hour-based rate for the outsourced forces depending on the outsourcing location;
  • The productivity of an outsourced development team;
  • The transfer to another outsourcing partner.

Specific factors for cost estimate for full process outsourcing:

  • The capacity of the partner’s outsourcing processes including project management maturity and long-established development processes to avoid starting over the project;
  • QA process particulars of the vendor (aggressive testing reduces QA expenses while bug fixing in production works the opposite way).

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What Do We Offer in Software Development Outsourcing?

With more than a decade of experience in Offshore Software Development and 250+ in-house top-rated developers, HDWEBSOFT offers various options for Software Development Outsourcing for businesses of all sizes. We provide you with the state-of-the-art software solutions at affordable prices and guarantee you the best quality.

Team Augmentation

  • Software developers and architects with extensive expertise in Java, .NET, Python, PHP, Node.js and many more including legacy languages
  • A wide array of outsourcing roles including testers and test automation engineers, DevOps specialists, system and integration experts, data architects and support engineers
  • Flexibility in collaboration terms: up to 14 years
  • Available top 1% professional developers at your service (from 0.5 to 100+ FTEs)
  • A remarkable capacity in cutting-edge technologies (AI, Big Data and VR), innovative architectures such (cloud-native and microservices), development methodologies (CI/CD and test automation) and knowledge in various industries

A Dedicated Team

  • Quick formation of an outsourced team (2 days - 2 weeks)
  • Seasoned team leaders and project managers to control the outsourced teams
  • Comprehensive support in building control of a cooperation environment and project progress
  • Enforced compliance with quality KPIs upon agreement
  • Adjustable team scale
  • High competence thanks to our developers’ quality coding and time management practices to speed up the development process
  • Significant reduction (up to 50%) in project expense because of the agile measure, CI/CD, and re-employment of available components

Full Process Outsourcing

  • Complete Project Management Office (PMO) to implement projects regardless of complexity
  • Experienced consultants in various industries such as retail, healthcare, manufacturing, logistics and many more to bridge the gaps between business and technology
  • Business and software development objective defining and complete responsibility handling of the development project
  • Tailor-made communication with every stakeholder
  • Constant detailed monitoring of project process and frequent reports

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